Follow and subscribe to DayakDaily on Telegram for faster news updates.
KUCHING, Aug 12: Malaysia’s national debt rose to RM1.045 trillion or 63.8 per cent of the gross domestic product (GDP) as of the end of June this year, and if based on the country’s current population of 33 million, each individual owes RM30,749.
Pointing this out, Sarawak United Peoples’ Party (SUPP) Kuching Branch Youth chairman Eric Tay Tze Kok pressed that Malaysia’s economic dilemma must be resolved by this generation, not the next, if it does not want to see the country derail into the path of bankruptcy.
If Malaysia aspires to become a high-income nation, Tay emphasised that it is necessary to address Malaysia’s most contentious problems, such as collusion, corruption, and abuse of power, and the wastage and leakages in government agencies, as well as what he termed to be the bloated civil service system.
“Furthermore, Malaysia must also accelerate the reform of the Industrial Revolution 4.0 to upgrade the industrial production value chain, as well as increase production automation and less dependence on foreign labour,” he added.
Looking at the current economic status of the country, Tay pointed out that Malaysia was known as one of the four Asian Tigers for its stellar economic performance in the 1980s which according to Bank Negara Malaysia (BNM), the total national debt in 2016 was at RM643.599 billion.
“But as of June 25, the ringgit has dropped to RM4.4587 against the US dollar and to RM3.2154 against the Singapore dollar. (In 1965, the exchange rate between the MYR and the SGD was at 1:1).
“Malaysia has a higher risk of defaulting on its debt (2.43 per cent) than Indonesia (1.33 per cent). High-risk economies are those with indexes above 1.5 per cent. Prior to its collapse, Sri Lanka’s debt default risk had reached 19.4 per cent,” he warned.
He noted the reassurance from Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz that the country would not go bankrupt as BNM still has US$106 billion (RM472 billion) in foreign reserves, while the government has repaid RM43.1 billion of debt this year, and foreign borrowing only accounted for 2.5 per cent of the total debt with the other 97.5 per cent was in ringgit denomination and that Malaysia will not have trouble servicing its debts and purchasing important goods.
He is also aware that Malaysia is blessed with abundant resources with palm oil and crude oil being the two main pillars, on top of a well-diversified economy, so there would not be any immediate concerns about bankruptcy.
Tay, however, raised that the political instability and the continuation of blanket subsidies and distribution of grants to please the people will place the country’s economy in a vulnerable position and compelled it to borrow more debts.
“Moreover, Malaysia is currently dealing with inflationary pressures, ringgit depreciation, expensive imports and labour shortages, which are causing significant strain, especially in the agriculture, manufacturing and construction sectors,” he said.
With that, he hopes the Gabungan Parti Sarawak (GPS) coalition wins the a majority of the 31 seats in GE15 in order to strengthen Sarawak’s bargaining chips with the Federal government on the Malaysia Agreement 1963 (MA63) issues to safeguard the State’s rights and interests. — DayakDaily