THE term ‘economic life’ is a take on the three threats that warrant a declaration of national emergency namely security, economic life or public order.
Former premier Tan Sri Muhyiddin Yassin declared an emergency to tackle COVID-19 which also entailed the largest spending of public funds, but without any debate or check-and-balance as Parliament was shut down.
The amount of RM600 bil spent is now generating controversy by being subjected to investigation by the authorities.
While we have recovered from the COVID-19 pandemic, it is the economy that may now be admitted to the ICU (intensive care unit) for major surgery. A prognosis which I predicted then was if it was business-as-usual (BAU) or rather corruption-as-usual (CAU).
More recently, Prime Minister Datuk Seri Anwar Ibrahim announced that we have a national debt of RM1.5 tril, including liabilities. With the wanton borrowing and spending accompanied by corruption and abuse of power, we should not be surprised of this dire state of our economy.
Government debt is people’s debt
According to the Statistics Department, our 2021 gross domestic product (national income) was RM1.5 tril. Our household debt as of end-2021 was RM1.4 tril.
It would seem our economic woes in terms of national debt, household debt and GDP are all aligned in equal amounts. If one bets on astrology with the stars aligning themselves, this certainly foretells an impending implosion of Malaysia’s economic galaxy.
Household debts are personal debts incurred by the people. A rising debt without commensurate income means people are increasingly becoming impoverished and have to depend on the government for survival.
But the government itself is heavily indebted and cannot go on subsidising the people. However, to those indebted, the government offers free financial counselling to better manage their finances.
Many may not realise this but the government debts have to be shouldered by the people. The government borrows our money, spends and invests just like any ordinary person. But when it cannot repay the debts, the people stand guarantee and are liable for the debts.
The government never goes bust as long as the people can pay for those debts through taxes. If the government is a household or a company – given the current unsustainable debt level – it should have been declared bankrupt by now.
In essence our households are now shouldering double their personal debt at about RM3 trillion.
Corruption on free fall
The politicians and policy makers should keep this mind that whenever they indulge in corruption – whether a few ringgit, million ringgit or billion ringgit – they are directly stealing from the people.
I don’t think the government is serious enough in tackling the national financial woes. Prime Minister Anwar is saying the right things, but whether the cabinet, civil service, government linked companies/investments are behind him is another question. Our economy needs major surgery not band aids.
The government should be as prudent as they advise the people should be in our household finances. Therefore, it is time that the policy makers undergo a basic financial counselling course.
It is in this financial counselling spirit, that I recall and update the salient points that I have written two years ago.
Transparency International which publishes the Corruption Perception Index (CPI) says a score below 50 indicates the country has “serious corruption problems”. Our 2021 score was 48 and we eagerly await the 2022 score.
But it is just a matter of how deep we plunge considering the many scandals exposed, but unfortunately covered-up at every instance. It seems only those on the opposition side get busted now and then.
Anwar is steadfast on his anti-corruption reform but it has to be implemented across the board. There is no such thing as past is past or those currently in high positions become untouchables. Whistleblowing is now subdued.
Corruption as a criminal offence is not time-bound nor time-barred. Even a child could see the direct correlation between the current debt level and the spade of corruption unearthed when Pakatan Harapan (PH) came into power in 2018.
Corruption is a malignant cancer that not only destroys the economy but also social order. – Jan 19, 2023
Dr Raman Letchumanan PhD, is a former Senior Fellow at the Nanyang Technological University of Singapore, a former director (environment) at the Ministry of Science, Technology and Environment, and a former head of environment/disaster management at the Asean Secretariat in Jakarta. Contact: [email protected].
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
