Abuses pushed Malaysia’s debt over $250 billion, says Mahathir

Malaysia's newly-elected Prime Minister Mahathir Mohamad addresses civil servants from the Prime Minister's office during his first assembly in Putrajaya on May 21, 2018. (AFP)
Updated 21 May 2018
0

Abuses pushed Malaysia’s debt over $250 billion, says Mahathir

  • Former strongman Mahathir Mohamad led an opposition coalition to a spectacular win over Najib’s previously undefeated ruling alliance in a general election on May 9.
  • Mahathir said last week that many of the figures recording the country’s financial position may be false.

KUALA LUMPUR: Malaysia is saddled with over 1 trillion ringgit ($251.70 billion) in debt, Prime Minister Mahathir Mohamad said on Monday, blaming the previous government led by former protege Najib Razak who now faces domestic graft investigations.
Mahathir, 92, led an opposition coalition to a spectacular win over Najib’s previously undefeated ruling alliance in a general election on May 9, having campaigned aggressively over people’s rising living costs and a multi-billion dollar scandal at state fund 1Malaysia Development Berhad (1MDB).
“We find that the country’s finances for example, was abused in a way that now we are facing trouble settling debts that have risen to a trillion ringgit,” Mahathir said when speaking for the first time to staff of the prime minister’s office.
“We have never had to deal with this before. Before we never faced debts higher than 300 billion ringgit, but now it has climbed to 1 trillion ringgit,” Mahathir said.
In his first week in charge, Mahathir announced that a broad-based goods and services tax (GST) would be zero-rated from June 1, as his government works to replace it with a reinstated sales and services tax (SST).
Mahathir had also promised to reintroduce fuel subsidies besides doing away with GST, all part of his coalition’s pledge to tamp down rising living costs.
Mahathir’s fiscal measures, however, would widen Malaysia’s fiscal deficit and are credit negative without any offsetting measures, according to ratings agency Moody’s.
Najib’s government had planned to collect 43.8 billion ringgit ($11.05 billion) in 2018 in GST, about 18 percent of total revenue.
During the election campaign, Najib had warned that Mahathir’s economic proposals would result in debt ballooning to over 1 trillion ringgit.
Najib also rebutted opposition claims that federal debt had risen to alarming levels under his governance, and said that debt amounted to about 50.9 percent of its GDP at June 2017, which was below the government’s limit of 55 percent.
Mahathir said last week that many of the figures recording the country’s financial position may be false.
Malaysia’s anti-graft agency has summoned Najib to give a statement on Tuesday in connection with a probe on SRC International, a former unit of 1MDB.
The summons came days after police raided six premises linked to the former prime minister as part of investigations into the state investment fund that Najib founded in 2009.
Among the items seized include 284 boxes of designer handbags and dozens of bags filled with cash and jewelry, from a luxury condominium in the center of Kuala Lumpur linked to Najib.


Security worries hobble ambitions of China tech giant Huawei

Huawei chief financial officer Meng Wanzhou arrives at a parole office in Vancouver, British Columbia, Wednesday, Dec. 12, 2018. (AP)
Updated 4 min 17 sec ago
0

Security worries hobble ambitions of China tech giant Huawei

  • None has released evidence of wrongdoing by Huawei, which denies it is a risk and operates a laboratory with Britain’s government to conduct security examinations of its products

BEIJING: While a Huawei executive faces possible US charges over trade with Iran, the Chinese tech giant’s ambition to be a leader in next-generation telecoms is colliding with security worries abroad.
Australia and New Zealand have barred Huawei Technologies Ltd. as a supplier for fifth-generation networks. They joined the United States and Taiwan, which limit use of technology from the biggest global supplier of network switching gear. This week, Japan’s cybersecurity agency said Huawei and other vendors deemed risky will be off-limits for government purchases.
None has released evidence of wrongdoing by Huawei, which denies it is a risk and operates a laboratory with Britain’s government to conduct security examinations of its products. But the accusations threaten its ability to compete in 5G as carriers prepare to invest billions of dollars.