Federal government debt soars

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What does this tale of rising federal government debt mean for the country?

Dr Subramaniam Pillay concludes in a recent analysis for Aliran Monthly:

A prudent Malaysian government would have saved a sizeable portion of the petroleum revenue from the past few decades as a fund for rainy days. Many other countries have done this. Norway is a prime example. Abu Dhabi is another country which has a huge sovereign wealth fund set up from its petroleum windfall. Botswana in southern Africa saved its windfall earnings from the discovery of diamonds and invested it abroad for its long-term well being.

Unfortunately, we are governed by a spendthrift government which is beset with problems of corruption and incompetency. Unless the situation changes, we are leaving a huge burden to our children and grandchildren. They are not going to forgive us if we do not try to change the situation.

Read Subra’s article in Aliran Monthly.

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Kometenmelodie

Yang / Pak Merit / Tunglang

You guys are so typically Pakatan die hards. You don’t try to debate rationally and simply spew uneducated comments. And when you get soundly beaten by someone who knows his stuff, you get abusive and throw all kind of accusations and resort to name-calling. Pathetic guys. If you aspire for a better Malaysia, you need to be a better citizen too. And not behave like some uncivilized mobs.

tunglang

Angry man doesn’t think rationally.
Much less with MBeeAs, BeeNAs, BeeN this or that.
BTW, why is Angry Bird so popular?
Chirpy, Chip, Chip?

kiddokit

My o my…melodie strutting out his chest like a proud peacock now by claiming he “…had soundly beaten them because he knows his stuff…”. Arrogance, dangerous stuff this…

By the way, I once saw this saying on a T-shirt and it goes like this…”I was born smart, until I got an education”. I guess an MBA education did just that to melodie…ha-ha!

John

At least debt reduces even if it’s little..at least it shows reduction in debt during anwar’s tenure as finance minister…

Kometenmelodie

Pak Merit,

If you are not rich, why would you even travel to developed foreign countries for holiday or other purposes? Developed countries called “developed” for a reason.

The last I checked, despite ruling Kelantan for 20 years PAS has not improved the state at all.

amir

Kelantan is spiritually rich, money cannot buy, that’s why Umno flers cannot get it.

tunglang

Of all states in Peninsular Malaysia, I love Kelantan for its untainted and rich cultural contents, physically and spiritually (both cannot exist without the other). Just look at its wood works, in the architecture, keris, fishing boats and home utensils and you will love to collect them for eternity. And the Singgora terracotta roof tiles are one of a kind found mostly in Kelantan. I had a dream of living in such a beautiful and cool Malay house in the midst of Jeli rainforest among tigers. And Kelantanese folks are polite mannered whether in the town or out in the… Read more »

Kometenmelodie

So you prefer to have the whole of Malaysia the same level of economic development as Kelantan ? Is that what you the govt to do ?

tunglang

I have found my sanctuary.
Have you?
Time for morning Kopi-O kau kau Orang Kampung in serenity below perfect cloudless blue sky almost to the melodic tune of Kelantan cultural ambience.

PAK MERIT

ok lah.
i tak rich tapi ke luar negara cari makan secara “legal n moral”.
untung sikit tapi belanja di msia untuk kemqkmuran negara.

lagu p ramlee versi 2011 didedikasi untuk Kometenmelodie :

enjoy

Kometenmelodie

Ke luar negara untuk cari makan “secara legal & moral” ? Betul ke ? Mana negara yg benarkan kamu kerja secara legal & moral ? Agak nya kerja sebagai tukang masak kat UK atau Australia ke ? LOL

tunglang

Any work worth doing with excellence, pride and sincerity (without the illegal, corruption, greed, laziness or amoral) is a work of high acknowledgement by God Himself.
Do understand that work besides making money is for a purpose – to serve God first and then society.
If man thinks his work is a drag, his life here is definitely unfulfilling and should be somewhere else.
Who says one cannot cari makan legally else where other than in Boleh Land? Unless his only rice bowls comes from the gravy trains.

PAK MERIT

how much does 6 pence worth in msian currency ? enough to buy kopi-o kow kow for tunglang, mmc & Kometenmelodie and even Anil at the roundtable !!!! sing-a-long ……

mmc

kometenmelodie

what is there more to say when you insist Spore has public debt. for all your MBA courses, may be you can explain better than me when a govt runs on budget surpluses since the 1980s and has 100% public debt to GDP. Hmm..may be Singapore definition of surpluses is very different from Msia or elsewhere.

calling others morons hmmm..is that not name calling.

anyway, there are just too many trolls in town, no?

tunglang

hi, mmc. When there are good things to learn from others as you have shown here, kampung jaguhs at Putrajaya don’t give a hoot but instead prefer to bury their bloated heads (some with questionable MBAs) in the man holes of irrelevance and self denials. Education “re-engineering” is one glaring example. To change such mentality will take many full moons of howling wolves to pass before the too-late-in-the-ranks-of-Timbuktu finally makes a wake up late call. For the time being, we as responsible individuals by all means should take ‘good’ care of ourselves to survive and thrive in difficult times without… Read more »

PAK MERIT

tunglang, mmc & Kometenmelodie can sit down at penang kopitiam, ordered the street food, agree to disagree & disagree to agree. after makan then all will eventually come to the consensus that BN has to go to improve the living standards as well as mentality of the rakyat.
Anil can be the mediator at the round table of the kopitiam.

tunglang

Ha, Ha, Ha, Ha! Pak Merit, you have a great sense of humor! Yam Seng with Kopi-O kau kau to cheerful 2012 @ anilnetto.com. I definitely agree if you can come too and sing a melody or two (Karaoke) to make the mood cheerful instead of gloom, dark and threatening! BTW, is there a need for me to furnish a fact to back up my assertion of Yam Seng Kopi-O for a good sense of humor here? Some dear folks here like to ask for facts to back up every iota of argument/comment which to me is a waste of… Read more »

Kometenmelodie

Pak Merit,

Over the 54 years Malaysia has seen some of the most rapid improvement economically to the extent that we about to reach the developed nation status. So your claim is erroneous.

As for improving mindset, I have not witnessed improvement in mindset in Pakatan run states at all. For example, in Kelantan the govt and people talk about going back to a system of governance of 15th century.

amir

a true effect of btn is evident here.

Kometenmelodie

So basically tunglang you are saying if we don’t support PR and hate BN, then we are uneducated fools ??

tunglang

My Melody, when the ‘duit’ pockets are more than three quarter empty, whether one is educated or uneducated, money matters speak louder and clearer than moonless nights of sentimental melodies of Barang Naiki, whether in kampungs or in upperclass Bangsar.
An only exception I reserved for is P. Ramlee and Saloma duet of the 50’s and 60’s, so soothing it makes one forget about money and dream being in P. Ramlee’s shoes cha-cha-ing.

Kometenmelodie

MMC I think I had explained that public debts include both internal and external debts. SG’s debts are mostly local and CPF is probably the reason why their debt % is high. But MY’s debt too is mostly local and as in the case of SG, it is also due to EPF. In fact MY’s external debt is only 5%. I find your reasoning is hard to comprehend. You claim MY going bankrupt due to 54% debt rate but have no problem with SG’s 102%. And then you try to justify these high debts and trying to shift the debate… Read more »

passion1

(deleted by admin)

tunglang

Same with burger stalls run by (some) Malays. That particular one in Farlim is sooooo good, it turned me into a vouched, diehard Tham Chiak Kui for burgers with eggs. Many times better and cheaper by the grams than MacDonald.
But, it doesn’t open rain or shine all the time! Esok, lusa, esok, lusa! Even with many customers waiting at the stall anytime. I gave up on this stall as a profitable customer.

Kometenmelodie

This is a racist statement and I wonder why Anil allows such comments being posted. What kind of debate we are encouraging if we allow such comments fueled by hate and racism ??

tunglang

You still don’t get it, ‘Sensitive Melody’.
My praise for this Malay burger stall’s sooooo-goood burgers with eggs showed our Malay burgers are much better than international branded, hyper expensive burgers and that enterprising burger stall at Farlim should keep up the good service and prosper from profitable customers in due time. How many food businesses have craving customers like his?
Is that still considered painful a fact to swallow?
Time to look out for another Malay burger stall to satisfy my Tham Chiak Kui spirit.

mmc

kometenmelodie

btw, there is a good article on Japan public debt today in Malaysia-Finance.blogspot. Test of the pudding is coming. Check it out.

Kometenmelodie

So what that got to do with Malaysia ? Seems like a diversionary tactics to me.

Hazliza

I am very tired of your flawed logic despite your persitence.

Kometenmelodie

What flawed logic you talking about ? I am debating here and willing to debate with you too. I can you throwing accusations without backing them up.

mmc

kometenmelodie PPC, who? Possibly we both pull out the explanation from the same source. Dont jump into conclusion that fast. Cyber warfare? Hey, we are not paid to do such things and I have better things to do with my free time, which incidentally I have plentiful now that I am on leave. Anyway, my message is very simple. Persistent budget deficits are a “no no” when > 40% of the country’s revenue is dependent on depleting resources. Its not prudential.in the long run PERIOD. Just as an aside since you brought it up, EPF money does not belong to… Read more »

Kometenmelodie

Certainly I did not see PPG providing the info, so I wonder why you are saying both of you pulled info from the same source. A might strange coincidence, don’t you think ? Using multiple identities and getting caught more like it. You keep changing your story. First you say Malaysian debt is too high. I countered saying other countries are higher with SG more than 100%. Then you say SG has no net public debt, which I also proved to be a false claim. Then you claimed these SG debts are due to CPF to which I also pointed… Read more »

Kometenmelodie

So what’s your name ? PPG or MMC ? or Subra ? Indulging in a bit of a cyber warfare aren’t you ? And get caught ! BTW, if you want to debate by all means please do so and I am glad to cross sword intellectually. But please do away with stupid and silly name callings. And BTW I did not claim my economics knowledge is zero either. While I am no economist, I have done numerous courses (and MBA) so obviously my grasp of the subject is good enough to able to debate with anyone including economists. I… Read more »

mmc

komentenmelodie spending more than you earn consistently is not prudential management.mindful of the fact that >40% of the government revenue is from petroleum products, which are depleting resources. at 53% public debt to GDP is no Armaggedon as yet considering our low external debt as you rightly pointed out. Just as in Japan, there is no financial crisis despite the 200% ratio simply of the strong balance of payment. But there will come a time when public debts start to crowd out private funding and once confidence dips, there will be an irresistible outflow of funds by the private sector.… Read more »

Kometenmelodie

mmc, If you talk about govts depending upon depleting resources then most of the world’s govts are also guilty. The issue is not depending upon depleting resources but unproductive subsidies that is the problem. Some morons (and PR supporters) keep insisting on subsidies as thought these are their fundamental rights. That’s what you should be fingering. Be more analogical in finding out the root causes of the debts (ie subsidies) rather than throwing populist statements like “leakages, wasteful spending,etc”. I agree having long term debt ratio of more than 40% is unhealthy but this has to be qualified as domestic… Read more »

Just As Concerned

So to all of you pro “Barang Naik” – kometenmelodie- Are you saying that Malaysian economy is doing well, just because its debt is 52%? So are you saying that its ok for BN to keep on spending like there is no tomorrow? To the BN, the future is up till tomorrow, anything beyond that is not in their dictionary. Prudent and thrift is not their way of thinking. No wonder many people say Malaysia is “jaguh kampung”. It prefers to compare itself to third world countries, but not against other developing countries like Singapore, South Korea or even Thailand.… Read more »

Kometenmelodie

Just As Concerned, When did I say Malaysian economy is doing well? Perhaps you should re-read my post. What I said it just because it is 52% debt ratio, it is not doom and gloom or we are staring at bankruptcy. You guys here keep deviating from the main point I am trying to raise, that is the quality and the credibility of the article. Instead you go on a wild rant on the state of the economy with giving facts. OK, let’s debate the Malaysian economy. If our economy is doing badly and about to go bust,don’t you think… Read more »

moo_t

Now, every Malaysian has a chance to become TRILLIONAIRE in futures, when you spend 120k to buy a dozen of eggs. That’s the real meaning of jibjib high income state. ROFL. Actually, those GDP% vs public debt are irrelevant to countries that under heavy currency control. China are among the lowest debt, but the inflation shot up, and people purchase power continue to go south. And the danger of debts , is country try to get away with it by PRINTING MONEY, to dilute the debt/bonds issued. Those can keep argue that Malaysian didn’t owe much “public debts”, but refuse… Read more »

mmc

kometenmelodie may be below explanation may help. FYI, since the 1980s, the Singapore Govt has not borrowed to finance its deficits, which means the Government has been running on surpluses. In essence, Singapore Govt has no net public debt. Thats why when the Tomyam crisis swept thru SEA, no hedge funds dare to go against Singapore currency. Btw, I am no economist too. “The Singapore govt. has high debt because the law requires the Central Provident Fund Board (CPFB) to invest the savings in non-marketable Singapore Government Securities (i.e. government bonds). The funds accrued from the sale of those bonds… Read more »

tunglang

hi mmc, thanks for your more ‘insightful’ financial prudence and intelligence of Singland. But the goons of BolehLand are too prideful to learn a thing or two of coffer management and irresponsible to the extent of ‘more borrowing in deep …’ unknown since the early years of Merdeka. It looks like we and our future generations will be no more ‘Freedom Citizen’ but chained to the servicing of ballooning debts created of Putrajaya’s free spending of seemingly unending flow of Ah Kong’s monies and unimpeded borrowings from international ‘Ah Longs’ (in the likes of IMF). Whatever melody Barang Naiki is… Read more »

Kometenmelodie

tunglang It is simplistic and cheap to dismiss BN as wasteful in spending. If you analyse the budget you will see that much of these debts are to service subsidies like fuel and others. Do you really think we have a mature political environment where PR will support the removal of subsidy for the good of the nation ? You yourself is calling BN as Barang Naik. This is the campaign started by PR back in 2007 to attack BN when they tried to reform the economy by removing wasteful subsidies. That’s one of the main reason why BN lost… Read more »

tunglang

Sing a melody of six pence!

Kometenmelodie

mmc, You might be right in case of Singapore but the situation is Malaysia is similar too. My point is the article is highly misleading to the point being an outright lying. This is especially poor when it comes from Aliran and an academic. Japan has a public debt ratio of almost 200%, much more than even Greece. But because they have been running surplus they have no issues. We also need to look at the external debts ratio and many other factors before judging. To say Malaysia is on the verge of bankruptcy because of 54% debt ratio is… Read more »

mark

Whatever the state’s debts,BN’s govt must be held responsible as they have ruled for more than 50 years.
They exploited our natural resources for personal gains,govt procurement with huge payment to middle company with no apparent functions,mismanagement of govt fund with huge losses,incompetent senior govt officers which caused huge losses to the govt and yet stay put in their jobs,etc……..the list can go on.
So knowing such a situation,do we still want this present govt to continue ruling?

Kometenmelodie

Well, you can accuse BN for corruption and mismanagement but the same can be said of almost all govts including the US, Japan, Korea, Taiwan, etc.

It is an indisputable fact that BN has brought the country forward while others who got independence earlier like India,Indon, Thailand, the Phil etc. Of course you can compare us with Singapore, Korea and Taiwan and say we did badly. But so would you and me when compared to Usain Bolt,

Yang

KOM Yes one poster comment was right.You are either dead ignorant and it expose on your zero knowledge of most thing.

Yes, Singapore, Korea & Taiwan are doing better than us and its is also an undisputable facts that Thailand, India and Indonesia have surpassed us during the last 10 years economically. As for the Philippine it has catch up with us to be almost at par. Yes we are better off than Burma and Zimbabwe.

Kometenmelodie

Yang,

I welcome the fact that you want to debate with me. OK, for a start tell me how India, Thailand and Indonesia have surpassed us economically. And also how the Phil had almost caught up with us.

I got to tell you, this post is my early favorite for 2012’s dumbest comment.

Kometenmelodie

Anil I am no economist or even with a finance background. But even I find this report to be ridiculously silly. That it comes from an academic is surprising. I expect someone with your background to be more careful in posting articles of quality. I hope you could differentiate from honest, objective academic analysis and politically motivated, empty rant. Firstly Malaysia’s loan-of-GDP ratio of 52% is rather low by world standard.FYI EU std is 60% while most EU countries exceed that target. The writer also provides information are simply not true (or probably outright lies) to buttress his points. He… Read more »

PPG

The explanation of Singapore debt that I pulled out from CIA factbook: https://www.cia.gov/library/publications/the-world-factbook/fields/2186.html …..note: for Singapore, public debt consists largely of Singapore Government Securities (SGS) issued to assist the Central Provident Fund (CPF), which administers Singapore’s defined contribution pension fund; special issues of SGS are held by the CPF, and are non-tradeable; the government has not borrowed to finance deficit expenditures since the 1980s ….. Singapore government has zero foreign debts and it is a fact. While our Malaysia government has squandered away much of our national wealth..and unfortunately it is also a undeniable fact! Your comments only exposed your… Read more »

Ak1

Yes its quite clear you are no economist. But you could at least GOOGLE. Gross debt measures like debt to GDP makes for a misleading comparison. A few points below: 1)SG operates a balanced budget. It has had budget SURPLUSES for DECADES, while MY operated DEFICITS for decades. 2)SG does not spend its borrowings on expenses. ALL proceeds from borrowings ARE INVESTED. So if investment returns can cover interest expenses, why worry? Alot of Malaysian borrowings are used to fund expenses, and this is why MY is more like Greece than SG. 3) SG has a very strong net asset… Read more »

Gerakan K

Hutang bertambah sebab kerajaan persekutuan mahu tanggung hutang kerajaan negeri.

PAK MERIT

Gerakan K
Kasihan dengan kau kerana anda tak berpeluang mengunjung ke luar Malaysia. Bila anda di negara yang betul betul maju barulah anda sedar yang ringgit kita tak bernilai langsung !
Punca utama pemerintahan persekutuan yang bankrup idea untuk membanhun tetapi sibuk dengan korupsi bersam kroni !
Anda mungkin dapat sogokan tapi cucu mungkin kena tanggung kesilapan moral nanti.
Insaf lah demi negara.

Kometenmelodie

Pak Merit ada sekolah ke ? Memang lah kalau kita ke negara yang maju, cost of living mereka tinggi. Kalau nak rasa nilai RM tinggi, sila ke Indon atau Vietnam. 1 RM = 2600 Rp. Bagus kan ?

matthewlim

our cost of living high?so you know our disposal salary also very high.we just need to work 2 week to buy an iphone. how’s about your … lauzy malaysia.(i’m malaysia last time but immigrate to uk because we know malaysia will bankrupt very soon.good luck