Nation’s economic strength not in size of its debt, but ability to repay it

13-Mar-2018 Intellasia | New Straits Times | 6:00 AM Print This Post

The strength of Malaysia’s economy is not defined by the size of its debt, but instead, the country’s ability to pay it, says Datuk Seri Najib Razak. The prime minister said, the country’s debt is managed well, as the country’s debt stands at 50.8 per cent of the Gross Domestic Product (GDP) against its maximum level of 55 per cent. However, he said Malaysia’s economic strength cannot be gauged by the size of its debt. “The strength lies in our ability to repay the debt. Take for instance, Singapore. The size of their debt is bigger than ours but their ability to repay that debt remains. “Our ability to repay our debt cannot be questioned because international ratings agencies have placed Malaysia in the ‘A’ category. “This means that Malaysia’s finances, including its debt, is managed well. It is hoped that the water problems in Selangor will be managed as soon as possible,” he said.

Najib was responding to a supplementary question by Datuk Seri Mohamed Azmin Ali (PKR-Gombak) in the Dewan Rakyat, at the second week of the sixth Parliament session. The dewan erupted when Mohamed Azmin posed a question on whether the 12.5 per cent increase in the interest payment of the national debt was related to the 1Malaysia Development Bhd (1MDB) issue. The controversial topic saw several Members of Parliament rise to voice their protest over the rationality of the question, with some arguing that the Selangor water issue is at a more critical stage. Azmin, who is Selangor Menteri Besar, appeared unperturbed by the commotion and continued: “I am confident that the PM (prime minister) can explain, give him a chance.” His words failed to soothe frayed tempers when BN MPs rose and urged Azmin to instead give priority to the water crisis in Selangor. Among those who criticised Azmin’s question were Datuk Seri Azeez Abdul Rahim (BN-Baling); Datuk Othman Abdul (BN-Pendang); Datuk Noraini Ahmad (BN-Parit Sulong); Datuk Normala Abdul Samad (BN-Pasir Gudang) and Datuk Ahmad Nazlan Idris (BN-Jerantut). Dewan Rakyat Speaker, Tan Sri Pandikar Amin Mulia, who initially only smiled at witnessing the ‘drama’, then intervened by asking the MPs to sit, while warning that failure to heed his instruction would see them face action. His stern tone however was ignored by Azmin, who is also PKR deputy president, when he stood up to defend himself by saying that the water crisis in Selangor has nothing to do with 1MDB. Najib, who is also Finance minister, then replied that he touched on the Selangor water crisis while providing an explanation on 1MDB, to offer a comparison in determining the government’s priorities in managing issues. “I gave Gombak (Azmin) an opportunity to ask a question, so give me a chance to answer. I made a comparison and it (the Selangor water crisis) was just an example. “Kenapa punggung panas (why so defensive) when we talk about water,” he said, drawing laughter from the MPs. In answering the initial question from Tan Sri Dr Muhammad Leo Michael Toyad Abdullah (BN-Mukah), Najib said the government has implemented measures through economic stimulus packages worth RM67 billion, which subsequently led to a positive growth of 7.4 per cent in 2010. “When I became the prime minister in 2009, the world faced a sub-prime financial crisis, causing our economy to be affected. “Nevertheless, we were able to overcome the crisis and the country continued to enjoy growth at 5.5 per cent from 2010 to 2016. “Our fiscal deficit was reduced from 5.3 in 2010 to 3.1 per cent in 2016.” Toyad had asked on the government’s long term measures in managing the country’s economy, especially with regard to credit ratings, to ensure the sustainability of the country’s deficit at a low rate and stable economic growth.


Category: Malaysia

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