| Explaining the facts behind liabilities of RM1 trillion by Lim Guan Eng
| Friday, May 25, 2018
Malaysiakini : COMMENT | The former prime
minister Najib Abdul Razak has issued a statement criticising the
present government’s announcement that our debt is now RM1 trillion.
He said it “will just unsettle the financial markets, alarm the
credit rating agencies and investors' confidence in our institutions,
such as our Bank Negara Malaysia”. We would like to explain that the new government will carry out our
administration based on the principles of competency, accountability and
transparency (CAT). We want to establish the true baseline on the state
of financial affairs, diagnose the problems and then prescribe all
necessary remedies. Let me take this opportunity to explain the RM1 trillion worth of liabilities as of Dec 31, 2017, as previously announced.
1. The official federal government debt is RM686.8 billion (50.8 percent of the gross domestic product, or GDP).
2. In addition, the government is already committed to paying for
government guarantees for various entities that are unable to service
their debts. This amounts to RM199.1 billion (14.6 percent of GDP). The committed government guarantees would include entities such
Danainfra Nasional Bhd (RM42.2 billion), Govco Holdings Bhd (RM8.8
billion), Prasarana Malaysia Bhd (RM26.6 billion), Malaysia Rail Link
Sdn Bhd (RM14.5 billion) as well as an estimated RM38 billion for 1MDB. Based on the two items above, the federal government debt would
amount to RM885.9 billion. This represents the 65.4 percent of the GDP
as highlighted by Prime Minister Dr Mahathir Mohamad yesterday.
3. However, in addition to the above, the federal government is
also committed and obligated to make lease payments (including rental,
maintenance and other charges), for a whole list of “Public-Private
Partnership” (PPP) projects such as the construction of schools,
hostels, roads, police stations, hospitals, et cetera. The lease
commitments which were designed specifically to circumvent the federal
government guarantee and debt limits amount to RM201.4 billion
(14.9 percent of GDP). Hence, the federal government debt and liabilities amount to a total
of RM1,087.3 billion or 80.3 percent of the GDP as of Dec 31, 2017.
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|posted by Major D Swami (Retired) @ 10:21 AM