25 Mei, 2018

The “spade” had always been called a spade


1. I am glad that the Finance Minister has come clean in his statement yesterday that the official federal government debt remains at RM686.8 billion (50.8% of the gross domestic product, or GDP) – not 65% or RM1 Trillion as previously claimed.

2. The level of 50.8% is much lower than the 103.4% reached during the first reign of Tun Mahathir.

3. The previous government had always complied with international public debt reporting guidelines as defined by the IMF and World Bank. Therefore, the figure of 50.8% is a universally accepted measurement.

4.  Contingent obligations, such as guarantees, have never been included in the official measurement of government debt, not even during Tun Mahathir’s previous reign.

5. The government had given these guarantees to certain entities it owns to help lower their financing cost. These are typically long-term obligations backed with revenue-generating assets.

6. As for PPP / PFI leases, these are operating expenses and not debt, and are for much needed social infrastructure, including schools, police stations, hospitals, universities, etc.

7. The previous BN government has been transparent and had never hidden these figures revealed by the finance minister today. All these figures are published in Treasury Reports, BNM reports, Accountant General reports, Auditor General Reports every year without fail.

8. Market analysts, economists and investors are all well aware of these numbers, which are manageable and can be serviced, a fact confidently admitted, by the Minister of Finance himself.

9. Therefore, we did not hide RM300 billion of debts or falsified figures as alleged. The spade had always been called a spade as per universally accepted guidelines.

10.  Now that the truth is revealed about this “RM1 trillion national debt”, we congratulate the new government for unnecessarily spooking the market which has led to sharp falls of our stock exchange this week – capping 14 consecutive days of foreign capital outflows.

11. This debacle has led to real losses to stock market investors and our GLICs such as EPF, KWAP, Khazanah and Tabung Haji. I hope and pray that PH government ministers will be more careful in making assertions in future.