The chances of Malaysia going bankrupt like Sri Lanka is extremely slim, says Tengku Datuk Seri Zafrul Tengku Abdul Aziz
“The International Monetary Fund (IMF) has never mentioned any economic problems faced by Malaysia that could result in the country going bankrupt but had instead expressed confidence in the nation’s economic growth.
“In late April, the IMF said it was confident at the prospect of Malaysia’s economy expanding by 5.75% this year.
“If you compare the economic in the economic indicators between Malaysia and Sri Lanka, ours is far much stronger than that of Sri Lanka.
As such, the possibility of Malaysia going bankrupt like Sri Lanka is extremely slim,” the Finance Minister said when responding to a supplementary question raised by Datuk Seri Ahmad Maslan (BN-Pontian) in Dewan Rakyat on Tuesday (July 19).
Ahmad asked the minister to clarify on recent viral claims on social media that Malaysia would end up bankrupt like Sri Lanka based on the national debt.
Malaysia’s ability To Increase Debt Level Limited – Tengku Zafrul
KUALA LUMPUR: Malaysia’s ability to increase its level of indebtedness is limited compared to developed nations with much lower debt service ratios, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.
He said the country’s ratio of debt service payments to revenue reached 16.3 per cent in 2021 and based on Budget 2022, it is expected to exceed 18 per cent.
“This means that for every RM1 of government revenue, almost 20 sen is used for paying interest on debts, and this is apart from the ability to repay the principal amounts on loans taken by the government,” he said during the Minister’s Question Time session at the Dewan Rakyat today.
Tengku Zafrul was responding to Datuk Seri Ahmad Maslan’s (BN-Pontian) query on whether Malaysia’s debt level was still manageable and, if there was still room to borrow, why the government did not continue to borrow to assist the people.
Finance Minister :Mechanism For Targeted Subsidy Being Tested Up To Six Months
The mechanism for targeted petrol subsidies is currently in the early stages of testing, said Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.
He said that it will take another three to six months of study before the system is implemented, as the government is finding ways to do away with bulk subsidies.
“The testing will be followed by more extensive evaluation in terms of other methods as well as determining the feasibility of such a mechanism not only in urban areas, but also rural ones.
“The development and testing of a targeted subsidy system is expected to take a period of between three and six months before it is ready for implementation nationwide,” he told Dewan Rakyat today.
This would be similar to the approach taken by the government for chicken, where in order to reduce market distortions, the government increased the ceiling price of chicken by 50 sen per kg, but at the same time, provided additional cash assistance to B40 groups.
“In line with this approach, the government will not increase the price of petrol to reflect the market price without subsidies given its impact on inflation, even though the RON95 price of RM2.05 per litre is approximately 50 per cent that of the real price without subsidies.
“Thus, the government’s strategy is to ensure the replacement of bulk subsidies with a combination of targeted subsidies and cash assistance in stages,” he said.
Tengku Zafrul was responding to questions from Wong Hong Wai (Bukit Bendera-DAP) on the government subsidy policy this morning.
On a related note, Tengku Zafrul said the inflation rate in Malaysia is moderate and under control, at 2.2 per cent for the first and second quarters of 2022.
“But recently, recording 2.8 per cent for May, there was a slight increase, while in the same month, developed countries, such as the United States and the United Kingdom, reached 9 per cent, while Thailand saw 7 per cent and the Philippines over 7 per cent.
“So Malaysia’s inflation rate can be considered moderate due to price controls on basic goods and services,” he said.
Govt To continue High_Speed Rail Projects
THE Ministry of Transport (MoT) has reasserted its commitment towards the East Coast Rail Link (ECRL) and the High-Speed Rail (HSR) projects.
Transport Minister Datuk Seri Dr Wee Ka Siong said he is committed to delivering the ministry’s promises and will ensure that both the ECRL and HSR projects are completed.
According to him, the ministry has set a timeline for completing the ECRL and HSR projects, as they are crucial to the country’s economic growth.
The ECRL is a 665km railway project that will link Kota Baru in Kelantan to Port Klang in Selangor. It will be constructed at a cost of RM55 billion.
“As of June 2022, the overall construction of this project has achieved a progress of 31.48%. The completion of this project will cut down travel time from Kelantan to Kuala Lumpur (KL) to only four hours, compared to seven to eight hours currently,” the minister said in a written response to reply to Pontian MP Datuk Seri Ahmad Maslan.
Saravanan Denies Agreement with Indonesia To Scrap MOS
There is no condition in the memorandum of understanding (MoU) with Indonesia on the intake of maids for Malaysia to do away with the Maid Online System (MOS), says human resources minister M Saravanan.
He told the Dewan Rakyat the temporary freeze on all Indonesian workers entering Malaysia was due to confusion on the recruitment mechanism of labourers from the republic.
Saravanan said there was no freeze on Indonesian workers entering Malaysia but that it was just a temporary “postponement”.
“The matter was discussed during a committee meeting involving both the human resources and home ministries yesterday.
“The committee agreed that a discussion should be held between both ministries, the immigration department, and the Indonesian ambassador (Hermono) immediately to resolve this confusion.”
He was replying to a question from Loke Siew Fook (PH-Seremban), who asked the minister to explain why Putrajaya had failed to adhere to the conditions outlined in the MoU, which led to the freeze.
On July 13, Hermono said Jakarta had imposed a temporary freeze on all Indonesian workers entering Malaysia.
He said it was due to the immigration department’s continued use of the MOS to facilitate the recruitment of Indonesian maids instead of the One Channel System (OCS), as agreed to in the MoU signed between the two countries in April.
