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What we don't know about the state of Malaysia's economy

  • Perhaps the government should also consider enhancing news transparency and not to allow the illusion to mask the truth.

Sin Chew Daily

Shortly before the arrival of the Year of Dog, Bank Negara announced the 5.9% GDP growth for the last quarter of 2017 and a three-year high of 5.9% growth for the whole year as well.

While political leaders are immersed in the joyful mood during the recent festive celebration, they nevertheless failed to tell the public the other side of the story.

PM Najib said last month that the country's government debts stood at RM685.1 billion last year or about 50.9% f the country's GDP. By comparison, Singapore's public debts were 112% of its GDP.

The Straits Times of Singapore clarified in a report that only 6.1% of the city-state's GDP was used to pay the debts while Malaysia used 12.5% to settle loan interest. This means that for every RM1 earned by the Malaysian government, 12.5 cents is used to pay our debts.

The report also said Malaysia used less than 9% of its GDP to settle debts when Najib took over as the prime minister in 2009, and that the amount expected to be used to settle bank interest this year would be twice as high as in 2009, at RM31 billion.

The government collected a total of RM44 billion from GST last year, and more than two-thirds of this amount was used to settle bank interest. Now we understand why the government has been unable to stimulate the frail consumer sentiment despite the strong GST collection.

According to the report, the Malaysian government also kept bailing out ailing GLCs and that such payments were not recorded as debt service but as "strategic sector payments" or "other repayments", including the payments made to Prasarana whose annual losses spiked to RM2.1 billion in 2016.

If the government's guarantees and contingent liabilities are added to its total debt, its debt-to-GDP ratio would rise to 69%!

And if the government were to foot RM4 billion in interest payments for these firms, its debt service bill would rise to 14.7% of its total revenue from the 13% expected this year.

Malaysia's GLCs have been incurring heavy losses while Singapore's government-linked companies are making hefty profits. The difference lies with how we manage the companies and harness our own talented people.

The country's national debts rose from RM266.7 billion in 2007 to RM685.1 billion last year at a rate of more than 10% annually.

The Edge Markets reported earlier that based on 10.7% of annual growth rate, Malaysia's public debts could reach RM1 trillion by 2021, rising further to RM2 trillion and RM3 trillion in 2028 and 2032 respectively.

Consequently, we need to drastically cut down operating expenses to avert a possible debt crisis.

Another fact that; few people are aware of is that the non-traded bonds issued by the Singapore government is only a form of paper game aimed at absorbing part of the Central Provident Fund deposits which the city-state's finance ministry will use for investment purposes in order to distribute regular dividends for the benefit of Singaporeans.

It is true that Singapore has managed to strike a budgetary equilibrium for almost every year and has turned over the surplus back to the citizens.

In the meantime, our government leaders keep bragging about us being a "moderate and progressive Islamic country" but a spate of recent events point to the other way.

For instance, Sinaran Harian taught its readers how to identify LGBT individuals in an attempt stigmatize this group of people.

Hong Kong lesbian singer Denise Ho was denied a permit to perform here for her open support of the LGBT community, and was forced to cancel her concert scheduled for April 14 in KL.

We simply have too many instances of non-tolerance, including the ban once slapped on Walt Disney's Beauty and the Beast, a ministry of health video making contest on the prevention of homosexuality, and calls by Muslim organizations to review the permits of Starbucks and Microsoft for their endorsement of same-sex marriage and LGBT community.

A Terengganu exco even said his state was prepared to launch a sexual orientation correction course for transgender women.

When the government proclaims Malaysia as a moderate country, it has nevertheless condoned a small group of irresponsible individuals with their absurd acts.

While the government is taking steps to stop people from disseminating false information, perhaps it should also consider enhancing news transparency and not to allow the illusion to mask the truth.



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