PETALING JAYA: Najib Razak has cast doubt on Finance Minister Lim Guan Eng’s explanation that one of the reasons for the government’s borrowing of RM58.1 billion in the first six months of the year is to repay 1MDB debts.
Speaking to FMT, the former prime minister said that to his knowledge, not a single sen of the principal amount of 1MDB-related bonds had been reduced since the 14th general election.
In July, the Parliamentary Select Committee on the Budget report tabled in the Dewan Rakyat noted that 1MDB’s principal debt stood at RM32.2 billion as of end-2018.
Yesterday, Lim, in addressing concerns over government borrowing, said the Pakatan Harapan administration was open and transparent, revealing the true extent of its debts, including contingent liabilities and government guarantees.
He said the commitments of the previous government to development expenditure and repayment of 1MDB debts were also the cause for the increase in debts.
But Najib disputed this and urged Lim to show proof that the new government had been repaying 1MDB’s principal debt.
“Can Lim share how much of the 1MDB principal debt has been paid off and reduced? Which of those 1MDB bonds have been paid off?
“And what happened to the money received from selling a portion of the Bandar Malaysia project for RM7.41 billion earlier this year?”
Najib also asked how many additional plots of land in the former TRX project had been sold off and how much in revenue the former 1MDB subsidiary received since GE14.
He said it was “strange” how the PH government would blame 1MDB for its problems while, at the same time, hail assets developed by 1MDB, namely Bandar Malaysia and TRX, as valuable assets.
He also criticised Lim for claiming that the government had to borrow to pay off loans, saying this only increased the country’s debts rather than reduced them.
He claimed that the RM58 billion increase in national debt for the first half of the year was almost double the pace at which debt increased under his administration.
Previously, economist Barjoyai Bardai urged Putrajaya to slow down on spending, citing Bank Negara Malaysia’s (BNM) figures showing that the government had already borrowed RM58.1 billion in the first six months of the year.
The Universiti Tun Abdul Razak lecturer said the numbers showed that federal government debt had increased from RM686.8 billion at the end of 2017 to RM799.1 billion currently.
BNM figures also indicate that the debt-to-gross domestic product (GDP) ratio, which was on a downward trend until 2018, had increased 4% from 48.7% at the end of Q1 2018 to 52.7% at the end of Q2 2019, inching closer to the government’s self-imposed debt to GDP limit ratio of 55%.