Based upon the Government's Economic Report 2011/2 published final year, the Federal Government debt will strike RM455.7 billion as at the end of 2011. This was the 11.9% enlarge from RM407.1 billion incurred in 2010. Our debt levels have been increasing fast in new years compared to RM242 billion in 2006 as well as RM146 billion in 2002.
As it stands, the Federal Government debt has strike 53.8% of the Gross Domestic Product (GDP) compared to 53.1% in 2010 as well as 44.6% in 2006.
However, what is of larger concern is the Government "off-balance sheet" financing that isn't reported as Federal Government Debt. In new years, the Government has increasingly released debt writings around its orthodox bodies as well as corporatized entities. These loans have been obtain with guarantees provided by the Government, but have been not reflected as Federal Government borrowings.
In 2010, the "off-balance sheet" financing activities has strike the jot down high of RM96.9 billion in 2010, the 14.9% enlarge from RM84.3 billion in 2009. These have been loans that have been taken with the Government guarantee, that the Government is thankful to pay should the borrowers fail to settle the debts. As an example, if the Federal Territories Foundation is unable to pay off the proposed RM300 million loan from EPF to yield financing for the low-cost housing purchasers, then the Government will have to step in to have the RM300 million payment to EPF.
Hence for all intents as well as purposes, even yet these loans have been not taken by the Government, they have been essentially supervision debt or differently well known as fortuitous liabilities. Adding RM96.9 billion to the current debt of RM455.7 billion, the in effect debt that Malaysian tax-payers have been probable for is RM552.6 billion. This stretched figure would then consecrate 65.2% of the GDP, well upon top of the 55% sovereign supervision ! loan lim it as defined in the Loan (Local) Act 1959 as well as Government Funding Act 1983.
The list of orthodox bodies as well as corporate entities that have been since Government guarantees have been as per the list below. Based upon the list, there have been the little serious concerns over the performance or non-performance of these loans that will require bail outs by the Federal Government.
For example, the PTPTN as well as Syarikat Prasarana Negara Bhd owes RM17.0 billion (17.5%) as well as RM9.1 billion (9.4%) respectively as well as they have both been heavily criticized by the Auditor-General for their diseased monetary supervision as well as their inability to pay off their loans.
The list additionally includes Syarikat Penerbangan Malaysia Bhd (RM7.0 billion) that was set up to bail out Malaysian Airlines System (MAS); 1MDB (RM5.0 billion) that in turn lent nearly all its income to the questionable foreign company, PetroSaudi International Limited as well as Silterra Bhd (RM1.0 billion) that has made some-more than RM2 billion in losses to date.
What is interesting is additionally the actuality that loans of Tan Sri Syed Mokhtar Al-Bukhary-owned Port of Tanjong Pelepas (PTP) additionally received monetary guarantees from the Government. PTP's "guaranteed" loans have in actuality increased from RM715 million in 2009 to RM1.275 billion in 2010.
Expert testimonies in 2009 in the United Kingdom Parliament has heavily criticized Government guarantees to orthodox bodies, government-linked companies or "private-finance initiatives" as an attempt to hide real debt levels in order! to gras p better credit ratings. Professor Dieter Helm of Oxford University said that such initiatives had succeeded as "an exercise to get investment off the open change piece so that the debt numbers demeanour better than they differently would have done." The Greek monetary predicament has similarly unraveled as the outcome of hidden fortuitous liabilities not reflected as official supervision debt or reported in its change sheet.
For the start the BN supervision contingency simulate all its guarantees as well as fortuitous liabilities in the annual Economic Report as well as Budget to be debated in Parliament as well as it contingency levy measures to delayed down the rate of expansion of Malaysia's debt levels. Malaysia shou! ld not w ait for the vital monetary predicament of Greek proportions before attempting to reform the open sector finance. At the gait that the debts have been increasing, we have been accelerating uncontrolled into the monetary disaster. - tonypuablog Read More @ Source
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