Malaysia will regain its rightful position, says Dr Mahathir

PM believes that the country will return as an economic powerhouse despite recent turbulences


Tun Dr Mahathir Mohamad (picture) yesterday laid down his economic visions as the prime minister (PM) seeks to restore lost trust, reignite interest towards the country plagued by corruption scandals and woo new investments to boost the economy.

Dr Mahathir, who spoke for the first time at the Invest Malaysia 2019 conference in Kuala Lumpur, outlined the changes Malaysia is under going since he returned as the PM for the second time in May last year.

He assured the business community that the new government will be the partner of investors, and investments irrespective of origin will be welcome as long as they bring mutual benefits.

“The focus is not on which country the investment originates from, but it is about the value proposition of the ventures which have to bring balanced benefits to both sides,” he said in his keynote address at the conference attended by more than 1,100 people.

In his 35-minute speech, Dr Mahathir touched on details about the country’s economic agenda, investment opportunities, growth sectors, institutional reforms, confrontation of corruption and fiscal policy.

He said the government’s main focus is to increase productivity at all levels, promote quality investment, push industries to move up the value chain, strengthen exports and embark on a fiscal consolidation path.

Dr Mahathir said the “reckless utilisation of off-balance sheet instruments by the previous government has resulted in a massive buildup of contingent liabilities” to the present administration.

He said the government is addressing the problem with the Debt and Liability Management Committee undertaking strategic measures to strengthen the overall debt management framework.

“The strategies include greater risk control parametres on issuances of government guarantees, better market access and identification of opportunities on potential asset monetisation — which means mature unlisted government entities may be listed in the stock market — as well as reducing some of our government-linked companies’ (GLCs) shareholdings in public-listed companies,” said Dr Mahathir.

The government had previously announced its intention to pare down its shareholding in GLCs. But this is the first announcement over the listing of maturing GLCs.

The government has dozens of state-owned enterprises which are either owned by the Finance Ministry (MoF) or through government-linked investment companies.

Proceeds from the listing would enable the government to recoup its investment and pare down its debts.

But Dr Mahathir stressed that the asset sales will not be at “fire-sale prices”.

He also reassured investors that any disposal of shares, monetisation of assets, auctions or other measures will not disrupt the capital markets and confidence to the financial markets, ratings environment and economic growth.

Meanwhile, Finance Minister Lim Guan Eng said the unlisted government entities that could be headed for listing will be decided by the PM’s Office.

“This is not under my jurisdiction, it’s under the PM’s Office. Let the PM announce it,” he said when questioned on the matter at the Invest Malaysia 2019 yesterday.

Under the present government’s definition, public debt — which now includes overall liabilities — stands at RM1.07 trillion as at June 2018, versus RM686.8 billion under the previous administration, while the debt-toGDP ratio is now at 74.6% versus 50.6% previously.

The government is also facing declines in revenue following changes in the consumption tax policy and the re-implementation of targeted fuel subsidies.

On reforms, Dr Mahathir said the government is moving forward with the proposal to limit the PM’s tenure to two terms.

He said the current administration is undertaking initiatives which require amendments to the Federal Constitution and certain Acts.

This includes separating the responsibilities of the attorney general and the public prosecutor.

“These changes require amendments to the Federal Constitutions,” Dr Mahathir said, adding that reforms of the Malaysian Anti-Corruption Commission (MACC) Act 2009 will include the appointment of the MACC chief commissioner, which will be done by the parliamentary select committee.

“The Cabinet’s special committee on anti-corruption has given its approval and the MACC Act will be amended,” Dr Mahathir said.

He also said the MoF is preparing a “clear guideline” for the appointments of directors and chairs in GLCs and subsidiary companies, including remuneration packages.

“Only those capable, with integrity and high moral values, will be selected to lead these entities. Those who are in the wrong will be removed,” Dr Mahathir said, adding that the PM’s Office is finalising the guidelines on remuneration of directors and key senior management of government entities.

“We find that some of the remuneration packages are obscenely high. From now on, rewards will be based on performance,” Dr Mahathir said.

He added that there will be no new taxes introduced this year, except for the sugar tax that was announced previously.

He said the implementation of the sugar tax was delayed slightly to ensure that the mechanism is effective to meet the country’s health objectives.

“Beginning next year, the government will use the revenue collected from this tax to provide a free and healthy breakfast programme for all primary school children,” he said.

Dr Mahathir believes that the country is well on its path to return as an economic powerhouse despite the turbulences in the last 10 months.

“With the economy fixed and the leadership well in motion for a smooth and orderly transition of power when the time comes, Malaysia is well poised to regain its rightful position as an Asian Tiger.

“We are a democratic country, free and respected, and we want to regain our integrity. With your help and support, Malaysia will prevail,” he said before concluding his speech.