It Does Matter who is elected to Putrajaya

A foreign press has reported as follows:-

Malaysia:Sinking deeper and deeper KL must take urgent action to cut alarming - and growing - national debt .

MALAYSIA should take heed of the problems - the public anger, the social unrest - posed by the solutions offered to tackle rising sovereign debt in Europe. God forbid that we head that way! The Auditor-General's recent report pointed out that Malaysia's national debt rose 12.3 per cent to over RM407 billion (S$165 billion) in 2010. The amount is equivalent to 53.1 per cent of gross domestic product. It's the second straight year that the national debt has exceeded 50 per cent. The figure is a reflection of the spending spree the country went on to mitigate the effects of the 2009 global financial crisis. At its peak that year, the budget deficit rose to 7.6 per cent of GDP, the highest in two decades. It has since come down to 5.4 per cent of GDP and the government projects that it will decline further to 4.7 per cent of GDP next year. But that may be overly optimistic.

Everyone knows why the debt has piled up: persistently high budget deficits over 14 years. But it is the pace of the rise that's alarming. Standout statistic: in the space of six years, total federal government debt has actually doubled from 2004. That way lies folly. Malaysia's debt position is close to breaching legislative levels set a long time ago by Parliament. According to the Auditor-General's report, public debt from domestic sources rose RM41.76 billion to RM390.36 billion last year, while loans from foreign sources rose to RM16.75 billion, or up RM2.96 billion. But the Loan (Local) and Government Investment Act caps the domestic debt ceiling at 55 per cent (of GDP) for the government, while the External Loans Act 1963 limits foreign loan exposure to RM35 billion. According to the report, the domestic debt level at end-2010 stood at 51 per cent of GDP.

The great irony of the situation is that it need not have come to that. The Auditor-General's report revealed a litany of financial abuse in several government agencies. Leakages and wastage of appalling proportions were laid bare. Marine binoculars being purchased at 25 times cost? Over RM5 million to buy horses? If all the wastage was cut and proper procedures observed all the way down, one suspects that Malaysia would be a budget-surplus country. Nor is national debt going to fall any time soon. Next year, it's estimated that the debt will breach RM455 billion - almost 54 per cent of GDP.

The danger for Kuala Lumpur is another recession stemming from the West's economic woes. This time it cannot afford to spend its way out of it, like it did in 2009. On top of that, subsidies on fuel and other essentials like cooking oil, milk, rice and sugar remain intractably high at RM32 billion this year. And the hits just keep on coming. According to the country's central bank, the national debt as at June 30, 2011 has risen to RM437 billion, with domestic debt amounting to RM421 billion and foreign debt at RM16 billion.

** It does matters who Malaysians will put to govern the nation. Malaysia may go bankrupt in the next round, and the rakyat suffers. Pakatan Rakyat definitely is a good alternative to save Malaysia.**