Former prime minister Dr Mahathir Mohamad says country had financial strength and little borrowing when he was in power.
PETALING JAYA: Dr Mahathir Mohamad denies the state of the Malaysian economy today is due to the lack of economic reforms when he was in power, iMoney reported today.
He was responding to an opinion piece written by the University of Chicago’s Dan Slater, who had said that the road toward Malaysia’s economic ruin started when he was prime minister and not with current Prime Minister Najib Razak.
Slater had also accused Mahathir of not making the adjustments needed to pull the country out of its crisis, but instead burdening the state with more borrowing and spending.
“That is not true. If the crisis was caused by me, I would have, during my 22 years, faced the problem of debt payments, recession and all that.
“All these things happened after (I retired). It is because of the changes, the changes in policy that they wanted to make their own legacy,” he said, referring to his successors, Abdullah Badawi and Najib.
On the issue of borrowing, Mahathir denied having made extensive borrowings during his 22 years as prime minister.
“Please show when did I borrow money. I only borrowed money from the Japanese because their offer was at the low interest rate of 0.7%, and it was repayable over 40 years.
“It’s almost like free money. If you didn’t borrow, then you are stupid. So, I borrowed,” he told iMoney.
Mahathir admitted he had even tried to borrow when the country faced the currency crisis in the late 1990s but failed to get the funds needed.
“Otherwise, everyone can see my record of borrowing. Very little. Even during the currency crisis, we did try to borrow but failed, but it doesn’t matter because Malaysia has got huge savings, one of the biggest,” he was quoted as saying by the financial portal.
The Parti Pribumi Bersatu Malaysia (PPBM) chairman elaborated on the point about savings, saying the huge savings the country had was unusual for a developing country and at levels as good as that of developed countries.
“About 40% of the GDP is saved every year in the form of the core savings where people can put their money and take it out when they want – KWSP (Employees Provident Fund), Socso, for injuries, the pilgrim’s fund (Lembaga Tabung Haji), or PNB (Permodalan Nasional Berhad), the government-run unit trust.
“Because of that, we had financial strength. It was a matter of mobilising the finances,” Mahathir said.
He then accused Najib of monetising the wealth and assets of the country and investing the funds generated on non-profitable things.
“Under Najib, the country has created things like Felda Global Ventures (FGV), for example. He valued the wealth and sold it as shares in the market, took the money and invested it in non-profitable things.
“The same thing happened with KWSP (EPF) and KWAP, which is a pension fund for the government, as well as Lembaga Tabung Haji, the pilgrims’ fund,” Mahathir alleged.
Speaking about Tabung Haji and the deal for land which was sold by 1MDB to the pilgrims’ fund, Mahathir claimed that the government sold land from 1MDB at below market price, at RM64 per square feet.
“This was when the surrounding area was sold at RM7,000 per sq ft. Then, it subsequently sold the land to Tabung Haji for RM RM2,773 per sq ft.
“Was that what I was doing? If they (Mahathir’s critics) say this is because of me… then my only answer is that what I was doing was to enrich the country and my successors robbed it,” he said, according to iMoney.