1MDB Is Merely The Tipping Point For The Traditionally Poor Financial Management And Inefficient Allocation Of The Country’s Resources By The BN Federal Government, That Led To Malaysia Being The Worst Performing Stock Market And Currency In Asia-Pacific For 2014 Despite a 6% Economic Growth Rate. (e/c)

Press Statement By Penang Chief Minister Lim Guan Eng In Komtar, George Town On 16.3.2015.

BN politicians are surprised at the reaction of investors to the Malaysian stock market and foreign exchange market to economic conditions in Malaysia that caused Kuala Lumpur Composite Index(KLCI) to have the unfortunate record of the worst performing stock market, and our currency the ringgit the largest depreciation in Asia Pacific in 2014. These BN politicians do not understand why our stock market dropped by 5.7% in 2014, the highest drop amongst all Asia Pacific bourses, despite a good economic growth rate of 6% last year.

Even countries like Thailand with lower economic growth rates of barely 1% in 2014, the Thailand stock exchange index rose by 15.3%, whilst Philippines was a star performer with a rise of 22.8% in the stock index in 2014 despite a growth rate less than Malaysia.

BN politicians ask “Why should a country that is supposed to record healthy economic growth rates of nearly 6% in 2014 suffer from being the worst performing stock market compared to countries like Thailand or Philippines with lower economic growth rates?” Economist will answer that foreign investors are not interested in historical performance but in future prospects of the KLCI and Malaysia.

And the future prospects for KLCI is negative due in part to many disturbing questions posed on the RM42 billion 1MDB scandal that raises doubts not only on transparency and compliance in our capital markets, but whether Malaysia’s credit ratings would be jeopardized should 1MDB unravel and default. However it is not fair merely to lay the blame on the RM42 billion 1MDB scandal, when it just happened to be “the final straw that broke the camel’s back”.

The 1MDB scandal is merely the tipping point for the traditionally poor financial management and inefficient allocation of the country’s resources by the BN Federal government, that led to Malaysia being the worst performing stock market and currency in Asia-Pacific for 2014 despite a 6% economic growth rate. There were four principal financial factors that blighted Malaysia’s hopes of escaping the “middle-income trap’ and develop into a high-income economy.

One, the implementation of Goods & Services Tax(GST) of 6% which would require at least 2 years for the Malaysian economy to “adjust”. Two, Malaysia has household debt to gross domestic product (GDP) of 87.9% or RM940.4 billion as at end-2014, the highest in Asia. Three, the Federal Government’s debt has increased by 120% from RM266 billion at end 2007 to RM582 billion at end 2014. If contingent liabilities and loan guarantees or included the figure could easily reach RM700 billion.

Finally, the government’s annual budget deficit has continued for the 18th consecutive year since 1998, the last year that Datuk Seri Anwar Ibrahim was the Finance Minister that recorded a budget surplus. With the 50% drop in international oil prices from the original estimate of USD105-110 per barrel, the budget deficit will only worsen.

In contrast, the Penang state government had recorded annual budget surpluses since the PR state government took power in 2008. What is noteworthy is that the budget surpluses for the 6 years from 2008-2013 of RM453 million is more than the accumulated surpluses of the previous 50 years under BN from 1957-2007 of RM373 million! Further the state’s debt of RM630 million in 2008 has not increased but instead been reduced by more than 90%. The asset reserves have also been increased by more than 50% since 2008.

Malaysia’s reputation as a haven for illicit funds has been severely damaged by the Financial Integrity Report, compiled by World Bank economists in Washington. As one of the top 5 country destinations with the highest illicit outflow of funds, there has been growing concerns about compliance and transparency. From 2002-2013, almost RM1.4 trillion of illicit funds have left the country, a number so humongous that each of the 28 million Malaysians would have lost RM50,000 each!

There have been serial financial scandals by BN before that were equally extensive, epitomised by the RM 52 billion missing bumi shares scandal and the RM13.5 billion Port Klang Free Trade Zone scandal, that did not have the same impact. However, the RM42 billion 1MDB came at the wrong (or right) time and place, creating a perfect financial storm especially when it involved Malaysians connected to BN leaders who are also international personalities like Jho Low.

The seriousness of the 1MDB scandal is highlighted by the historic and unprecedented action by the Prime Minister Datuk Seri Najib Tun Razak to sue DAP National Publicity Secretary and MP for Petaling Jaya Utara Tony Pua for defamation relating to Tony’s expose of the 1MDB scandal. However this legal suit by Najib will not make the problem disappear. Urgent action by a reputable international independent body other than the Auditor-General is crucial to restore confidence in our capital markets. Or else Malaysia will suffer the indignity of an anomaly and paradox of recording high economic growth rates and yet the worst performing stock market and currency in the region.

LIM GUAN ENG

—– Mandarin Version —-

槟州首席部长林冠英于2015年3月16日在槟城乔治市发表声明:

一个大马发展机构只是国阵政府理财不当、国家资源分配无效的冰山一角,也导致马来西亚在2014年成为亚太地区股票及货币市场表现最糟的国家,尽管我国经济增长率达6%。

国阵政治人物都很惊讶于投资者对我国在股票及外汇市场至经济状况的反应,吉隆坡综合指数已经破记录成为表现最糟的股市,我们的货币在2014年也是亚太区贬值最严重。这些国阵政治人物都不明白为什么我们的股市在2014年下跌5.7%,是所有亚太区股票交易所跌幅最高的,尽管我国在去年取得6%的经济成长。

就连像泰国这样在2014经济成长仅约1%的国家,泰国股票交易指数也增加15.3%,而菲律宾也表现不俗,其股票交易指数在2014年达22.8%。

国阵政治人物问:“为什么一个经济成长率在2014年近6%的国家,在股票交易指数方面竟然比泰国、菲律宾这些经济成长率较低的国家还糟糕?”经济学家会说,外国投资者对以前的表现没有兴趣,他们只在乎吉隆坡综合指数及马来西亚的未来展望。

而吉隆坡综合指数的未来展望是消极负面的,由于一马机构420亿丑闻引发了许多问题,包括我国资本市场是否透明及守法、当一马机构瓦解及无法偿还欠债后,我国的信用评级是否会再被破坏等问题。但是,如果把所有责任都归咎于一马机构也是不公平的,这宗丑闻只是骆驼上的最后一根稻草。

一个大马发展机构只是国阵政府理财不当、国家资源分配无效的冰山一角,也导致马来西亚在2014年成为亚太地区股票及货币市场表现最糟的国家,尽管我国经济增长率达6%。四个基本的财政因素已经摧残了马来西亚逃脱“中等收入”陷阱、迈入高收入经济体的希望。
第一、推行6%消费税。我国需要两年的时间来“适应”。
第二、截至2014年末,我国的家庭债务是国内生产总值的87.9%或9400亿4000万,亚洲最高。
第三、联邦政府的债务已经增加120%,从2007年底的2660亿令吉增加至2014年底的5820亿令吉,如果包括或有负债或债务担保,这笔债务可高达7000亿令吉。
最后,政府的年度财政预算自1998年已经持续18年赤字,那是拿督斯里安华依布拉欣担任财政部长、财政预算案尚有盈余的最后一年。随着国际油价从每桶105-110美元下跌50%,财政预算赤字将会更加严重。

反之,槟州政府在2008年民联接管后,破记录达财政预算盈余。更值得一提的是,2008年-2013年之间的财政盈余累积达4亿5300万令吉,比起国阵在1957年-2007年这50年期间治理马来西亚所累积的财政盈余3亿7300万令吉还多!此外,槟州在2008年的6亿3000万令吉债务并没有增加,所而减少了超过90%,槟州的资产储备也比2008年增加了50%。

华盛顿世界银行经济学家出版的全球金融诚信报告指出,我国也因成为非法流动资金的“天堂”而声名狼藉。做为全球最多非法资金外流的“顶尖”五个国家之一,我国金融的守法及透明问题获得关注。2002-2013年,约1.4兆令吉的非法资金流出我国,这笔天文数字等同于我国2800万公民每人损失5万令吉。

国阵之前爆出的财政丑闻也涉及庞大的数额,主要包括价值520亿令吉的土著股权不翼而飞、还有135亿令吉巴生自由贸易区丑闻,还没有那么严重的影响。但是,420亿令吉一马机构丑闻在这种时候爆发,可以说是最佳时机,也是最坏的时候,形成的“金融暴风雨”,特别是涉案者包括与国阵领袖拥有密切关系的国际红人如:刘德祖。

一马发展机构丑闻牵连甚广、而且非常严重,从首相拿督斯里纳吉破天荒要起诉揭发此案的行动党全国宣传秘书兼八打灵再也北区国会议员潘俭伟诽谤可以看出。但是,纳吉的法律行动并不会让问题消失。除了总稽查司,我们迫切需要有名望的国际独立团体的采取行动,以恢复我国金融市场的名声。否则马来西亚将继续受困在本区域“高经济成长率、低股市及货币表现”不寻常、不光采的窘境。

林冠英

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