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Be transparent with Petronas money first

April 7, 2013

'My biggest beef with the BN federal government is this: Why is there no oil-based sovereign wealth fund (SWF) for Malaysia?'

COMMENT

By Chua Jui Meng

Malaysia’s non-commodity Khazanah Nasional, founded in 1993, is ranked 23 with US$34 billion in assets and a Linaburg-Maduell Transparency Index (LM-TI) of 5.

The world’s largest sovereign wealth fund (SWF) is Norway’s oil-based Government Pension Fund-Global. It was set up in 1990 and is currently registered with assets worth US$664.3 billion with a perfect 10 LM-TI.

UAE-Abu Dhabi’s oil-based Abu Dhabi Investment Authority, established in 1976, is ranked second with US$627 billion with a 5 LM-TI.

At third ranking China’s non-commodity SAFE Investment Company which was founded in 1997 and now manages assets worth US$567.9 billion with a 4 LM-TI.

That’s the top three SWFs in the world. Now, let’s focus on our neighbours.

Singapore’s non-commodity Government of Singapore Investment Corporation that was set up in 1981 is ranked 8th with assets at US$247.5 billion and a 6 LM-TI.

Following at 9th rank is another Singapore non-commodity SWF, Temasek Holdings which was established in 1974. It has US$157.5 billion in assets and a perfect 10 LM-TI.

Even countries like Kuwait, which was severely damaged by Iraq’s bombing and brief occupation, Libya, Kazakhstan, Algeria and South Korea which was far poorer than Malaysia in the 60s, 70s and 80s.

Malaysia Boleh is thus really Malaysia Tak Boleh under BN-Umno’s 55-year rule.

My biggest beef with the BN federal government is this: Why is there no oil-based SWF for Malaysia?

Malaysia is the 27th largest oil producer in the world, rolling out 693,700 bbl/day. Only 114 countries are listed as at 2009 and 2010.

Compare Malaysia with the above mentioned countries that are doing better in SWF asset management: Kuwait (10th at 2,494,000 bbl/day), Libya (17th at 1,790,000 bbl/day), Kazakhstan (18th at 1,540,000 bbl/day), Algeria (15th at 2,125,000 bbl/day), South Korea (64th at 48,180 bbl/day) and Singapore (82nd at 10,910 bbl/day).

Petronas, founded in 1974, is today a global player in oil and gas exploration.

A debt is a debt!

Why is the government just satisfied with an annual RM100 million contribution to National Trust Fund, or KWAN, since 1988? Are you treating Malaysians as monkeys and giving out peanuts?

Where has Petronas’ trillions of ringgit in revenue over the past 38 years gone to? Did Petronas’ oil and gas exploration presence in 32 countries outside Malaysia contribute or help facilitate the bulk of RM1.08 trillion in capital flight in the last decade?

Why avoid establishing an oil-based sovereign fund for the people and country? Is it because financial transparency and accountability would be a pain?

Petronas’ Q3 2012 profits are down 22%. That is a significant drop in financial performance.

But all these beg the question: With such wealth over 38 years, why is Malaysia’s national debt, as reflected by Budget 2013, at RM502 billion or 1.3% short of the 55% legislated debt ceiling?

But Deputy International Trade and Industry Mukhriz Mahathir had let the cat out in an interview with The Edge last year, claiming that Malaysia’s debts were well managed as the bulk of the RM800 billion borrowings were domestic!

A debt is a debt! You have to repay all, whether domestic or foreign. Also, which is the true figure for our federal debt? RM502 billion or RM800 billion?

Chua Jui Meng is PKR vice-president and Johor state chief. He is also a former MCA vice-president and an ex-Cabinet member.


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