Thursday, August 1, 2013

Stop Sweeping Our Financial Dirt Under The ‘Off-Balance Sheet’ Carpet

1 AUGUST 2013

The latest downgrade by Fitch of Malaysia’s outlook from “Stable” to “Negative” is a matter of grave concern though it should come as no surprise.

We have consistently maintained that the government’s management of the economy particularly the profligacy in spending without proper safeguards of transparency and accountability will take us to the brink.

Prior to the 13th General elections, independent analysts had raised the red flag about our debt-to-revenue ratio of 237 per cent in 2012 and our over dependence on oil revenue but the UMNO-BN controlled media went to town to paint the critics as traitors out to destabilise the economy.

Instead of taking cognizance of the legitimate concerns and rectifying the situation, Najib has plunged the country into greater fiscal deficit, eating into our current account surplus and ignoring the clear signs of structural weaknesses.

How much longer does Najib want to be the proverbial ostrich in the sand by pretending that his administration’s mismanagement of public finances has no significant impact on the economic outlook? No amount of creative accounting practices can change our financial red to black.

Thus, while the sharp rise in the Federal Government guaranteed debt to nearly RM150 billion in 2012 from RM96.9 billion in 2010 has not been factored in our budget deficit calculations, it cannot escape the radar of impartial economic and financial analysis.

In this regard, we call on Najib to stop hoodwinking the people by bragging about our so-called ‘healthy debt-GDP ratio’ when in reality it is a case of sweeping our financial dirt under the ‘off-balance sheet’ carpet.

Unless urgent remedial action is taken, it is clear that the promises made in the last elections about holding in trust public finances and more responsible fiscal management will remain hollow and the culture of reckless spending, opaque government procurement and privatisation processes and disregard for accountability remains the hallmark of Najib’s ‘transformation’ government.

Let the government be warned that this cannot be allowed to continue. As the management of the nation’s public finances is not a game of one-upmanship, we urge Najib to stop grandstanding and immediately step up to the plate to put the nation’s and the people’s interest above self and partisan interests.


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