Saying Malaysia will go bankrupt is nothing new and shocking anymore. Such allegations have taken place since the 80s and are frequently huddled by the opposition especially DAP whereby during the BNM forex scandal when its reserves were almost gone. It had happened during the days of Dr Mahathir being the chief administrator of the country.
And now, when he is the ‘Top Dog’ for the opposition pact, he is just playing the same tune as what DAP had done before and what more when the 14th general election is around the corner.As such, in a forum, Dr Mahathir, who was merely carrying out his job as chairman of Pakatan Harapan, had issued a statement that Malaysia is as though heading towards bankruptcy if it does not settle the so-called ‘huge’ debts. He made similarities to Greece when Malaysia is facing with US $ 900 billion long-term and short-term debts.
Can we rely and trust his claims? A simple dan direct explanation can easily counter Dr Mahathir’s baseless claims.
If we apply for loans with a bank either for personal or business purposes, amongst the main concern determined is our ability to repay. Banks will have to ensure their money is secured and returned within the stipulated period. Bank loans are also regarded as a long-term investment in a business.
Similarly, with Prime Minister Najib Razak’s explanation in his blog. Should Malaysia debts are at a very critical level as claimed by Dr Mahathir, why would world economic giants such as China, America, India and Saudi Arabia pour their investments to us?
In every investment principle, rule no. 1 should be, what we invested we must get returns. But what are the assurance we should take into our calculated risks? It has to be supported by auditor reports and feasible study reports. The same applies to Malaysia, these world economic giants will definitely be extremely cautious and require strong supporting reports and analysis from world economic bodies such as the Rating Agencies.
If indeed the current national debt is up to US $ 900bil (RM3.3 trillion) and if the country’s economic performance which is typically rated of its GDP (Gross Domestic Product) contracted or reduced severely, then certainly, Malaysia is severe and is heading towards bankruptcy. Hence, how did Mahathir make his intentional blunder?
Malaysia does not have “huge” debts and its Debt-to-GDP ratio is now at 50.7% which is much lower than 92 other countries in the world including Singapore, Germany, USA, UK and the rest of the developed world. If according to Dr Mahathir’s calculation, these countries would have to be bankrupt first. In fact, at 50.7%, it is double less than 103.4% level in 1986 during his first 5 years premiership.
Despite that Malaysia do beg for foreign investments, we did it with our terms and above all, our transactions are in Ringgit Malaysia thus we did not borrow a single sen to either the World Bank or IMF. Dr Mahathir claimed as such, “If we do not pay, they will make you bankrupt”. Simple logic, if we do not borrow from anyone, who shall we pay to and how possible can the country go bankrupt? Who are those that will make us bankrupt?
Perhaps Dr Mahathir is recalling the economic downturn of his time when he had to beg loans from Japan and Singapore to save Malaysia and several cronies including his sons’. Are these the sort of loans he is using as his yardstick?
Certainly many will be disappointed with Dr Mahathir who carries himself as a fraudulent dissident figure more than a statesman. He prefers to misrepresent the people rather than justified and factual references. Even if he is overly determined to coup the ruling party Barisan Nasional led by by someone who does not kowtow to his demands, is it honourable to sabotage the nation and its people?