Government current debt of RM800 Billion and this was confirmed by a former prime minister who has served for 22 years and now he is also the Prime Minister candidate for the opposition bloc in Pakatan Harapan. Who will not feel a shiver down their spine? Further, he is referring those figures to Bank Negara reports. But, is he telling the truth?
Dr Mahathir knew very well that his staunch supporters will gulp down whatever he says without having to check the government debt data first. What Dr Mahathir would deliberately miss out is the difference between a government debt of RM655.74 billion and an external debt of RM848.24 billion or perhaps he chooses to be picky for a larger number just to raise public anger against the government.
Indeed, there is a great difference between government debt and foreign debt. Perhaps for a layman, to distinguish the difference is a complicated understanding but it will be quite surprising that someone who has been leading the government for more than a decade, could easily confuse and negligent in his explanations unless, for an obvious reason, he did it on purpose.
In short, government debt is a government-issued debt in the form of bonds and ‘sukuk’ to finance government development and expenditure. External debts include debt held by foreign investors in Malaysia, private debt to foreign banks, deposits by foreigners within Malaysia, trade notes by foreigners and many more.
If foreign investors invest in government bonds, it will be treated as external debt, should any local companies borrowed from overseas banks, it will be calculated as an external debt too and if any foreigner did their savings/ depositing money in local banks, this will also be counted as part of the external debt.
No doubt, we will be nervous to the news that our external debt rose so sharply in 2014 at RM747.76 billion and a further increase to RM833.81 billion in 2015 as compared to the previous year between 2009 and 2013 which is only at RM230 billion.
Hence, people from the opposition bloc like Kadir Jasin, he is taking every opportunity to turn them into his seditious articles to create restlessness among the rakyat. However, if they themselves are blotched in understanding to distinguish between Government Debt and External Debt, all that we can expect are the only half-truth.
The external debt is said to increase in 2014 does not mean that the government has increased in debt at RM500 billion within a year period. The increase was due to a redefinition of both external dan government debts by Bank Negara in accordance with standards established by the IMF.
Before the new redefinition, only debt in foreign currencies are treated as an external debt but now, debt in Ringgit Malaysia denominated by foreign investors are also considered as an external debt and this also include depositors by foreigners in our local banks.
Never mind Dr Mahathir’s believers but definitely, there are Malaysians who will do their research. Hence, it would confirm if this PH Prime Minister is telling the truth as well as we can also evaluate whether he is still worthy of an astute and sharp-minded person.
In the first quarterly report of 2014, clearly described new components that are accounted for in the redefinition of external debt as well as how under the new definition, external debt to RM700.1 billion as against RM327.9 billion according to the old definition.
Whereas, the double increase of the foreign debt is not due to a double increase in debt by the government or the private sector as claimed by Dr Mahathir. Out of the RM848.24 billion external debt, RM443.06 billions are from the private sector debt and the rest are the government debt owned by foreign investors.
It is rather pathetic for Dr Mahathir’s supporters to believe the half-cooked fact that he himself does not understand whatever he writes. If it is true that the country is being burdened with so much debt, is there still a single foreign investment came pouring into our country? If Dr Mahathir fails to answer this straightforward question, it is thus clear that he is not qualified to lead the opposition bloc in Pakatan Harapan and what more back to the usual business as the Prime Minister.