Malaysia needs to move on


Malaysia needs to move on from the scandals of yesteryears, while the government continues with the clean-up jobs to build the right foundation for the country to rise up and reclaim the position among the leading economies globally.

Finance Minister Lim Guan Eng (picture) said the country that Pakatan Harapan has inherited from the previous administration is “broken”.

“Yes, the country over the years has had its successes and some of the achievements are to be proud of. But we have hit a frustrating ceiling.

“For a long time, we lived in our shadow and were mired in various scandals that consumed us from the inside,” he said at the Malaysia Hub event organised by the World Bank Group in Washington, US, last Friday.

He said among the clean-ups are solutions for the 1Malaysia Development Bhd scandal; the mismanagement of Lembaga Tabung Haji (TH) and the Federal Land Development Authority (Felda); and cost-cutting measures for several transportation projects.

“The government is serious about the clean-ups and is pumping RM17.8 billion into TH and RM6.3 billion into Felda to save these institutions from ruin and rebuild them into the respected institutions that they once were.

“The government has saved 47% or RM16.6 billion from the original cost for the Light Rail Transit Line 3, while 22% or RM8.8 billion was saved for the Mass Rapid Transit Line 2 construction cost, excluding interest, land acquisition and other costs,” Lim said.

On major reforms, he said despite criticisms towards the government for being “slow”, the administration has carried out a number of major reforms earlier on, such as addressing the conflict of interest arising from having the same person holding the prime minister post and the Ministry of Finance’s office, as well as political interference in government-linked companies (GLCs).

“Within a few months, the government ensured that all board members of GLCs are made of professionals and not political operatives, in order to improve these companies’ corporate governance,” he said.

The government has also reformed the broadband industry market, which has halved prices and doubled the speed to reduce living costs and accelerate digital economy growth, emphasised Lim, adding that the government does not control the media.

Meanwhile, the government has instituted the open tender system throughout the public sector to curb power abuse and corruption, as well as having applied zero-based budgeting.

Lim said the government is migrating from cash basis to accrual basis accounting, which will increase the accountability level and transparency in public finance.

“This migration, which will be completed by 2021, is important because it will consider off-balance sheet debt and off-budget spending more systematically into the government’s books,” he said.

The previous target for the deficit level was set as 2.8% under the previous administration in 2018, which was later reset to 3.7% after accounting for various off-budget expenditures into the government’s books.

Lim said the government has also decided to cut the deficit level from 3.7% in 2018 to 3.4% this year, 3% in 2020 and 2.8% or less in 2021.

“(Fitch Ratings Inc, Moody’s Corp and Standard & Poor’s Financial Services LLC) have heard of this plan and decided to keep the government’s credit ratings at A-/A3 despite the fiscal challenges we face from prolificacy and past corruption,” he said.

Subsequently, approved foreign direct investment also rose 48% to RM80.5 billion in 2018 from RM54.4 billion, indicating that foreign investors are coming into Malaysia, of which a large chunk is from the US and China.