SINGAPORE (May 28): It has been another dramatic week in Malaysia. The new Pakatan Harapan (PH) government has revealed that the country’s total debt and liabilities have breached RM1 trillion ($336 billion). It has also come to light that the previous Barisan Nasional (BN) government had been bailing out the scandal-ridden 1Malaysia Development Bhd (1MDB), paying off nearly RM7 billion worth of its debts since April last year. In the Ministry of Finance’s 2017/18 Economic Report, total federal government debt was reported to be just over RM685 billion as at end-June 2017.
Now, the new PH government is trying to stabilise Malaysia’s finances. Among other things, salaries for ministers will be cut by 10%, and about 17,000 “political appointees” on the government payroll will be dismissed, according to Prime Minister Dr Mahathir Mohamad. In addition, a number of government agencies answerable to the PM’s office will be closed. The authorities are also going after members of the previous government who may have broken the law. Former prime minister Najib Razak was himself hauled into the Malaysian Anti-Corruption Commission’s headquarters this past week to answer questions about 1MDB.
There was, of course, little doubt that things were going to change after Najib was booted out of office. And, so far, just about all the suspected excesses of his government are proving to be true. Notably, the Auditor-General’s report on 1MDB in 2015, which was declassified on May 15, corroborated much of what was said by the US Department of Justice in its civil forfeiture complaints of July 20, 2016. Separately, the police have reportedly found that the bags of cash seized over a week ago from residences in Kuala Lumpur as part of their probe into 1MDB added up to an eye-watering RM130 million.