Minister Rahman Dahlan counters all allegations made by Mahathir, from the East Coast Rail Link issue to 1MDB.
PETALING JAYA: Former premier Dr Mahathir Mohamad, because of his personal vendetta, has resorted to “lies and scare tactics” that can potentially destroy the country’s economy.
Minister in the Prime Minister’s Department Abdul Rahman Dahlan, in a statement today, said Mahathir’s baseless allegations were merely aimed at undermining the confidence of the public and investors in the country.
He also said Mahathir’s allegations against the government’s “historic” deals with China were made either deliberately or due to a lack of understanding of the pertinent details.
An example of this, the statement added, was the soft loan that the government is undertaking to build the East Coast Rail Link (ECRL) project which the 91-year-old said would increase the country’s debts considerably.
Mahathir had also claimed that the project’s main contractor would be a Chinese company instead of Malaysians.
“The soft loan given by the Export-Import Bank of China is on very favourable terms with a low interest rate and has a 20-year tenure.
“It is also denominated in ringgit and not in USD or yuan, as alleged by Mahathir.
“Although the main contractor will be China’s largest construction company, our agreement is that a significant portion of this work will be sub-contracted to local companies.
“There will also be a transfer of technology,” Rahman said in response to Mahathir’s claims.
He added that the structure of the said project will involve local contractors and differed greatly from the construction of the Kuala Lumpur Convention Center, built when Mahathir was the prime minister.
“The architect was an Argentinian, Tower 1 was contracted to the South Koreans, while Tower 2 was built by a Japanese company.”
He also cleared the air over the cost of the ECRL which Mahathir, at the Pakatan Harapan convention last Saturday, said was hugely overpriced.
“The RM55 billion price tag also includes the cost of all rolling stock, signalling systems and supporting infrastructure,” the statement said.
Once the project is completed, it is expected to add 1.5% additional gross domestic product (GDP) growth per year to the east coast.
On the topic of state-owned 1MDB, which the opposition alleged has debts of RM53 billion, Rahman said the correct amount was RM31 billion, as the debt was significantly reduced after it underwent a rationalisation exercise.
“1MDB currently has RM1.9 billion in cash that will allow it to further develop its strategic Tun Razak Exchange and Bandar Malaysia projects. These would add significantly to Malaysia’s growth over the next decade.”
That is not all. According to the minister in charge of the Economic Planning Unit, Mahathir was also wrong when he said the government’s current outstanding debt of RM600 billion is denominated in US dollars.
“For Mahathir’s information, Bank Negara’s latest statistics state that 97% of Malaysia’s debt is denominated in ringgit.
“The government’s conscious decision to only borrow in ringgit was a result of past lessons learned from Mahathir’s government.”
Rahman claimed that Mahathir had borrowed substantially from Japan, with loans denominated in yen. However, the subsequent appreciation of the yen’s value had caused significant losses to the country.
“The current government is determined not to repeat this mistake. That is why the government’s debt is denominated in ringgit and is only marginally affected by foreign currency exchange movements.”
He then slammed the “DAP-led Opposition” for continuously stating that Malaysia is about to be bankrupt.
“We would like to ask Mahathir why Malaysia did not go bankrupt when he more than doubled our debt from 44% to 103.4% Debt-to-GDP ratio in 1986.
“If at 103.4% we did not go bankrupt, how is it that with the current debt-to-GDP ratio of 54%, Malaysia will go bankrupt?”