Economics Politics

Umno Youth leader shows the proof Mahathir is asking for

p1

Zaidi Azmi
Written by Zaidi Azmi

KUALA LUMPUR – July 23, 2018: Umno Youth deputy chief Shahril Sufian Hamdan today answered a challenge by Prime Minister Tun Dr. Mahathir Mohamad by proving that the country’s debt during his first reign from 1981 to 2003 was higher than the most recent under Datuk Seri Najib Razak.

Shahril pointed on his Facebook wall that Mahathir’s claim, in parliament today, that the country’s debt-to-GDP (gross domestic product) percentage in the 1980s and 1990s stood only at 27 per cent, was misleading.

“His 22 years as prime minister was from 1981 to 2003. The lowest debt-to-GDP ratio was in 1997, which was at 31.9 per cent.

“Meanwhile, the highest was in 1986, at 103.4 per cent. This was in fact the highest since Malaysia was formed in 1963,” wrote Shahril, who included statistics from the Ministry of Finance.

Citing Article 36(1) of the Dewan Rakyat Standing Orders, Shahril further stated that making misleading statements during a parliamentary sitting is akin to making a mockery of the House.

Mahathir cited the figures and then issued the challenge after opposition leader Datuk Seri Zahid Hamidi argued against the plan to borrow money from Japan, given how the appreciation of Yen in the 80s had exacerbated Malaysia’s economic crisis.

“That is why I think it is more effective for the government to opt for domestic borrowings. The interest may be higher but at least it will help spur our own financial institutions,” said Zahid.

Responding to Zahid’s points, Mahathir retorted that the country’s annual financial reports showed that past debts did not exceed RM300 billion or 27 per cent of GDP.

“If you could show a different set of figures, I’d appreciate it very much as it would mean I am wrong. But I was there (as PM) for 22 years so I do know to some extent the figures for growth, finances and debt,” he said.

Borrowing from Japan is part of Mahathir’s plan to pare down Malaysia’s national debt which the new Pakatan Harapan government has calculated to be at RM1 trillion or 80.3 per cent of the GDP.

The figure came to be after the country’s actual national debt, at RM686.8 billion or 50.8 per cent of GDP as acknowledged by Finance Minister Lim Guan Eng, was lumped together with the government’s contingent liabilities/guarantees.

(Editor’s note: We detail below information from the World Bank/Ministry of Finance)

Malaysia’s debt-to-GDP percentage from 1973 to 2017

Razak Hussein/Hussein Onn’s administrations

1973

43.6

1974

40.2

1975

51.0

1976

48.8

1977

49.3

1978

46.9

1979

44.9

1980

44.0

Mahathir Mohamad’s administration

 1981  54.0

1982

66.9

1983

73.4

1984

72.8

1985

82.5

1986

103.4

1987

101.7

1988

96.4

1989

85.5

1990

79.5

1991

73.3

1992

64.4

1993

55.7

1994

47.6

1995

41.1

1996

35.3

1997

31.9

1998

36.4

1999

37.3

2000

35.2

2001

41.3

2002

43.0

2003

45.1

Abddullah Ahmad Badawi’s administration

2004

45.7

2005

42.1

2006

40.6

2007

40.1

2008

39.8

Najib Razak’s administration

2009

50.8

2010

49.6

2011

50.0

2012

51.6

2013

53.0

2014

52.7

2015

54.5

2016

52.7

2017

50.8

 

Comments

comments

About the author

Zaidi Azmi

Zaidi Azmi

If Zaidi Azmi isn’t busy finding his way in the city, this 26-year-old northern kampung boy can be found struggling to make sense of the Malaysian political scene. Zaidi can be reached at [email protected]