SHAH ALAM, Jan 27 — Umno lawmaker Tan Sri Tengku Razaleigh Hamzah today raised concerns about the federal government’s ballooning debt, which stood at a staggering RM687.43 billion in the last financial year.
The Gua Musang MP said at a public forum organised by G25, a group of former senior government servants, that the country’s debt situation prevented the government from provide universal economic wellbeing for its people.
“I would say, at the risk of stating the obvious, that our political leadership needs to be sensitive to and care for the economic wellbeing of the masses.
“This level of comfort is to ensure that the people are not unnecessarily burdened by financial pressures that are out of proportion to the national ability to handle and manage.
“In this regard, the sad reality is that our leadership has failed to keep in check the national debt that our country is in,” the veteran lawmaker said.
He warned of severe ramifications if Putrajaya failed to rein in spending.
Federal debt as of June 2017 stood at RM685.1 billion, the Ministry of Finance revealed last November, up by almost a fifth from March 2016.
The country’s debt-to-gross domestic product (GDP) ratio, however, stood at 50.9 per cent, or 3 per cent lower over the same period, likely due to increased projected earnings.
Local borrowings formed 97 per cent or RM662.4 billion of total debt. The country’s foreign borrowing stood at RM22.7 billion or 1.7 per cent of GDP.
The growing debt has seen the government withdraw billions of ringgit worth of subsidies, resulting in raising the prices of basic goods.
Tengku Razaleigh, a former finance minister, also said that while raising debts as a means to finance economic growth is justifiable, the effects of uncontrolled spending could impact people’s lives negatively.
“It could stagnate income. Additionally, there is the probability of capital flight because of the general perception that investment opportunities are curtailed,” he said.
In the backdrop, the country’s household debt reflected the structural problem dogging the economy; it showed Malaysians are living on credit, Tengku Razaleigh said.
“The public, especially the young, is in reality, restless about the state of the national economic wellbeing.
“Graduate unemployment is rampant and this is especially so among those who are without skills,” he said.
“On the other hand we are overly relying on cheap foreign labour to avoid facing the reality of labour cost this will stagnate income and condemn our workers to earnings below the level enjoyed by the first world,” he added.
Malaysia’s household debt is at over 84 per cent of GDP.
In 2017, youth unemployment rate stood at 11 per cent, among the highest in history.