This is because, former prime minister Dr Mahathir Mohamad says, at the rate the government is borrowing money for projects, the nation will be submerged under a pile of debts.
He says a Bank Negara statement placed government borrowings at RM600 billion.
With the depreciation of the ringgit, he estimates the government’s borrowings now to actually total RM900 billion.
In his latest blog post, the chairman of Parti Pribumi Bersatu Malaysia, says:
“Malaysians should protest against this huge borrowing by the government because it could place a heavy burden on themselves, their children, grandchildren and beyond.”
He says projects such as the East Coast Railway, the Kuala Lumpur-Singapore high speed railway and debts accrued by 1MDB mean that the government would need to borrow almost RM200 billion.
However, because of the depreciating ringgit, the actual debt will be much more, he says.
“Malaysia will be saddled with these huge additional debts. If the payment is to be made by selling assets of the government, a huge chunk of valuable land in Malaysia will be foreign-owned.”
Lenders usually have tremendous influence over their debtors, he says, giving Greece as an example where institutions which lent money are in control.
He says it will also lead to the currency being greatly devalued.
“When a currency devalues the people will become poor. After 60 years of high growth Malaysia will revert to being a poor developing country due to the Malaysian Government’s borrowing habit.
“Forget Vision 2020. Malaysia will be reduced to begging for aid. And countries which depend on aid will lose much of their independence.”
He ticked of MCA President Liow Tiong Lai for “trying to make any criticism of (Prime Minister) Najib Razak’s dealings with China as a racial issue.”
“It is not racial. It is national. By supporting Najib’s borrowing and losing billions of ringgit you are helping to destroy Malaysia’s economy.”
Saying that this is a ploy to divert attention from the financial implications of many of the deals, Mahathir adds that the deals, especially the East Coast Railway project, will increase Malaysia’s Government debts considerably.
For instance, he says the RM55 billion to pay for the 600km railway will be borrowed from China. This means the contract will be given to a China contractor, although Malaysia has many companies capable of constructing electrified railway lines.
Giving the contract to a foreign company means the money will flow out of the country.
Borrowing from foreign sources will also result in an outflow of Malaysian money in repayment. With interest, the outflow due to payment of the RM55 billion loan will be more than RM90 billion, says Mahathir.
Then there will be the need to buy rolling stock and this means more money will flow out.
He noted that the RM55 billion for the ECR is well above the estimates by Malaysian and foreign experts. The price should not be more than RM35 billion, says Mahathir.
Mahathir laments: “We will never be able to repay our debts. It does not matter whether it is to China or other countries. If we fail to pay we will become bankrupt.”