Was RM600 bil of government funds squandered?

PRIME Minister Datuk Seri Anwar Ibrahim at a media conference after his first Cabinet meeting yesterday (Dec 5) announced that he has ordered the authorities to investigate claims that “RM600 bil of government funds have been misappropriated by the previous government”.

He further added the Finance Ministry has informed him there had been several breaches involving the funds.

In fact, this claim surfaced during the 15th General Election (GE15) campaign trail when a Pakatan Harapan (PH) leader made such an allegation against his Perikatan Nasional (PN) opponent.

Since then, this claim has taken a life of its own with PH supporters and media splashing this news all over. However, I have not read details about what the source of these funds was, and how much was actually squandered, giving the impression that all of the RM600 bil was involved.

Mind you, RM600 bil was about the government budget for the years 2020 and 2021 combined. This budget could not have been squandered in totality, otherwise civil servants would not have been paid, and the government would have declared bankrupt.

Dr Raman Letchumanan

Even PN chairman Tan Sri Muhyiddin Yassin against whom fingers were pointing to as the prime minister in 2020/2021 said he was unsure where the figure of RM600 bil had come from, suggesting it could be a reference to the economic stimulus packages worth RM530 bil that he had implemented at the height of the COVID-19 pandemic.

Money trail

So, there you have it. The government has launched an investigation into a RM600 bil scandal, and the person suspected of it has questioned the source and amount actually misappropriated.

Malaysia’s sovereign investment fund 1MDB (1Malaysia Development Bhd) has earned infamy as world’s largest kleptocratic scam. But that was only RM40 bil.

Now there is a possibility of a RM600 bil scam. I am surprised the government did not attempt to put a finger on this matter and let it fester and hog the headlines. It could be misinformation, to put it mildly. What would investors and businessman think, at a time when all efforts are geared to restore and grow our battered economy?

Before all this hoo haa come to the fore in the last few weeks, I wrote an opinion piece on July 15, 2021 under the headline “The RM88 Bil question: Where has It gone?”

The article was intended to question how effectively the COVID-19 stimulus packages were spent which the current government – then was the opposition – is all gung-ho about now. Let me quote from the said article how the RM88 bil came about and why it was the subject of my analysis then.

“I want to discuss the pandemic stimulus packages valued at RM530 bil announced by the government thus far, which includes direct fiscal injection of RM88 bil. Before that, let me make sense of the confusing technical terms used.

“The government says the stimulus relief package consists of two components; direct fiscal injection, and others variously referred to as stimulus, relief and/or benefit. I will deal with the former here which I would call ‘direct cash aid’ because it is essentially the taxpayers’ money that the government hands out.”

Yes, I have separated out then, the taxpayers’ funds which the government has control over, and others such as EPF withdrawals, loan moratorium benefits by banks, credit guarantees that are handled directly between the institutions and their clients/beneficiaries.

I believe with the last eighth stimulus package (PEMERKASA) accounted for, the total package will be valued at about RM600 bil with government funds of about RM100 bil and non-government funds of RM500 bil.

I am not suggesting this to be the case as only the government can confirm this. But as a professional chartered accountant, I am loathe to write on something which I myself cannot figure out.

Anwar must be impartial

Let’s look at the implication of lumping RM600 bil as being misappropriated. The impression given is that private independent institutions like the Employees Provident Fund (EPF), banks and other lending institutions have been involved or complicit in the misappropriation of their own funds with the government. Market confidence down the drain?

Datuk Seri Anwar Ibrahim

Accounting and financial standards does not allow the government to spend other people’s money. Unless those funds are channelled through the government. This was how the 1MDB scandal occurred.

The government borrowed RM4 bil from the government pension fund the Retirement Fund Inc (KWAP) for the Finance Ministry Inc 1MDB and made dubious investments, or most likely was pilfered.

Now taxpayers have to pay RM2 bil annually just to service the loans. If only KWAP had invested directly in reputable enterprise and business, we taxpayers would not be burdened with 1MDB debts, and most likely pensioners would have enjoyed multiple returns.

It therefore begs the question – but quoting this RM600 bil – is there something brewing in these private funds and institutions that we don’t know about. It would be best the government comes clean on this matter.

Having said that, I admire Anwar’s bold decisions made at the first Cabinet meeting. In particular to investigate the Digital Nasional Bhd 5G roll-out which I wrote about a year ago on Nov 14, 2021. I believe there was a blanket ban then on any adverse report on 5G as established media refused to publish my article.

In any case, Anwar will face revolt within his unity coalition cabinet as not only the then PM but also his ministers – especially the finance minister – was deeply involved in these matters.

But if Anwar keeps to his promise of a clean government – and strictly follows the constitution, rule of law, and oath of office – the rakyat will be fully behind him. – Dec 6, 2022


Dr Raman Letchumanan PhD, is a former Senior Fellow at the Nanyang Technological University of Singapore, a former director 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.

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