Malaysians should not forget so easily the mountain of debt left behind by the Najib administration, writes Anil Netto.
Of late, former Prime Minister Najib Razak has been trying hard to re-invent himself – singing on social media, riding pillion on a superbike, being seen eating out in public places – especially in the run-up to the Cameron Highlands by-election on 26 January 2019.
But Malaysians should not forget the legacy of his administration so easily. Take a look at these latest figures:
Federal government debts and liabilities
RM and (% of GDP)
725bn (51%) – Official debt
118bn (8%) – Committed government guarantees
843bn (59%) – Subtotal
185bn (13%) – Other liabilities
38bn (3%) – 1MDB debt
1,066bn (75%) – Total debt and liabilities
Source: 2019 Economic Outlook Report, as cited by The Edge 21 January 2019
Below is somewhat different breakdown, which doesn’t include other liabilities:
Federal government debt
RM and (% of GDP)
731bn (51%) – Official debt
259bn – Debt guaranteed by federal government
990bn (69%) Total official debt and debt guaranteed
Source: Bank Negara data as at 30 September 2018, as cited in the Edge, 21 January 2019
Perhaps not all the government guarantees should be considered as debt, as some of the guarantees may be on debt which is recoverable.
But either way, we are still talking close to RM1 trillion in debt, almost three quarters of GDP.
What this means is the federal government’s debt service charge or interest payable amounts to a whopping RM33bn per year (compared to about RM5bn for cash handouts in 2019 under Bantuan Sara Hidup).
That comes up to 13% of government income which has to be used to service this massive debt. This is at a time when the government’s operating expenditure alone comes up to 99% of its income, leaving hardly anything left over for development expenditure.
No wonder we will have a tough time wiping out those persistent fiscal deficits, let alone reducing that mountain of debt.
This is the real disastrous legacy of the Najib administration, which has set the nation back a decade. Malaysians should not forget.