KUALA LUMPUR: Former prime minister Najib Razak said today the official federal government debt of RM686.8 billion (50.8% of the gross domestic product, or GDP) reflects the “universally accepted” method of measurement.
In a Facebook posting, he said he was glad that Finance Minister Lim Guan Eng had “come clean” in his statement yesterday that the official federal government debt remains at RM686.8 billion and not RM1 trillion (or 65% of GDP) as previously claimed.
He said the level of 50.8% was much lower than the 103.4% level reached during the “first reign” of Dr Mahathir Mohamad.
Najib said his government under the Barisan Nasional had always complied with international public debt reporting guidelines as defined by the IMF and World Bank. “Therefore, the figure of 50.8% is a universally accepted measurement.”
Contingent obligations, such as guarantees, had never been included in official measurements of government debt, not even during Mahathir’s previous reign.
“The government had given these guarantees to certain entities it owns to help lower their financing cost. These are typically long-term obligations backed with revenue-generating assets,” Najib said.
Najib, who was also finance minister in the previous government, said lease expenses from public-private partnerships and private finance initiatives were operating expenses and not debt, and were “for much needed social infrastructure, including schools, police stations, hospitals, universities, etc”.
He maintained that he had been transparent and had “never hidden” the figures revealed by Lim, a member of the Pakatan Harapan government that took power after defeating BN at the recent general election.
Najib said the figures for debt and lease expenses were published in Treasury reports, Bank Negara Malaysia reports, Accountant-General’s reports, and Auditor-General’s reports every year.
The debt and other expenses were manageable and could be serviced, a fact “confidently admitted, by the minister of finance himself”.
“We did not hide RM300 billion of debts or falsified figures as alleged,” he said. “The spade had always been called a spade as per universally accepted guidelines.
“Now that the truth is revealed about this ‘RM1 trillion national debt’, we congratulate the new government for unnecessarily spooking the market which has led to sharp falls of our stock exchange this week – capping 14 consecutive days of foreign capital outflows.”
Najib said “this debacle” had led to real losses to stock market investors and government-linked investment companies such as the Employees Provident Fund, Khazanah and Tabung Haji.
He added: “I hope and pray that PH government ministers will be more careful in making assertions in future.”