FORMER twice premier Tun Dr Mahathir Mohamad questioned Malaysia’s financial strategy, sparking a public discourse on the country’s fiscal policies.
In his critic, the elderly statesman highlighted Malaysia’s substantial savings including Bank Negara Malaysia’s (BNM) reserves exceeding US$100 bil and investments totaling over RM1 tril with entities like the Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB).
“Apart from the reserves held by BNM amounting to more than US$100 bil (RM500 bil) we have RM1 tril investment assets with EPF, over RM300 bil assets under management in PNB, more than RM80 bil deposit savings with Tabung Haji and retirement fund EPF has almost RM150 bil.
“We have in fact more than one trillion Ringgit in savings,” he penned in a Facebook post.
According to the former Langkawi MP, juxtaposed against this backdrop of prosperity is the burden of enormous debts, much of which were incurred during the tenure of former premier Datuk Seri Najib Razak and further deepened by ongoing government expenditure on various projects, subsidies and hand-outs.
One of the primary concerns raised by Dr Mahathir is the irony of saving vast sums while grappling with extensive debts. He emphasised that a significant portion of these savings is invested in US bonds, hence making it challenging to retrieve the funds promptly.
“We cannot get back the money easily. The US has a reputation of not giving back the money lent to them or deposited with them,” claimed Dr Mahathir who reigned as prime minister for 22 years (first stint) and 22 months (second stint).
He added that so much government funding had to be used to service the loans. The consequence of this financial conundrum is the necessity of allocating substantial government funds to service these loans, creating persistent deficits and an enduring burden on Malaysia’s economy.
“This results in more deficits. The debts remain a burden. We have to service the debts with several billions every year.”
Moreover, Dr Mahathir questioned the logic of holding such vast reserves in the greenback, especially when it comes at the cost of servicing debts that continue to mount.
“Why are we saving money when we can pay our debts and reduce our financial burden? Why are we lending money from our savings to the US and getting little in return? Why must we hold so much money as reserves in US dollars? Why must we have such extensive reserves?”
His remarks have ignited a debate with the public actively participating in discussions about Malaysia’s financial priorities.
Meanwhile, on social media platform X, a netizen voiced concerns, drawing parallels with Greece’s economic crisis.
Bcos we hv a huge operating expenses including billions of RM to pay civil servants. We don’t want to end up like Greece.
— mycire (@Malacire) October 18, 2023
Greece experienced a severe economic crisis starting in the late 2000s. The country faced skyrocketing public debt, a struggling economy and high unemployment rates. The crisis was triggered by a combination of factors, including unsustainable government spending, widespread tax evasion and a lack of structural reforms. – Oct 18, 2023
Main photo credit: Utusan
