It’s Time for Ostrich Najib to get real: Pay Attention to Our Finances


August 1, 2013

MY COMMENT: What does it take for Najib as Finance Minister to realise that heOstrich Head in the Sand has mismanaged our Treasury. The problem is that our Finance Minister was born with a silver spoon and cannot connect with ordinary Malaysia who will suffer the most when the country is in financial crisis. Maybe he will wake up when a serious fiscal crisis hits our country. Even then I am not sure since he does not know hardship as everything was handed to down to him on a platter.

Our civil servants, especially those in the Ministry of Finance, will only react when the government is unable to pay their salaries and other perks. Otherwise, they wont care. Truth be told. We cannot continue to spend and spend to the nth power as if there is no tomorrow. Payback time is not far and we will have the bear the burden of lax financial management soon enough.

Najib is the worst Finance Minister since Independence. He has no clue about being prudent and responsible with our money. Under his watch over the Ministry of Finance, the Malaysian ringgit  has hit a 15-year low against the Singapore dollar and weakened noticeably against the greenback. When Tun Tan Siew Sin was Minister of Finance and Tun Ismail Mohamed Ali was Bank Negara Governor, the two currencies were at par with each other. –Din Merican

It’s  Time for Ostrich Najib to get real: Pay Attention to Our Finances

http://www.malaysiakini.com

NajibPrime Minister Najib Abdul Razak has been accused of pretending that his administration had maintained a “healthy debt-GDP ratio” in view of the latest Fitch Rating’s downgrade of Malaysia’s economic outlook from “stable” to “negative”.

In a press release today, PKR de facto leader and Parliamentary Opposition Leader Anwar Ibrahim said that facts show that the Federal government’s guaranteed debt under the Najib-administration had rose to nearly RM150 billion in 2012 from RM96.9 billion in 2010, which would definitely hurt the economy.

“How much longer does Najib want to be the proverbial ostrich in the sand by pretending that his administration’s mismanagement of public finances has no significant impact on the economic outlook?

“No amount of creative accounting practices can change our financial red to black,” DSAIsaid Anwar.  Fitch Ratings had noted that federal government debt had rose to 53.3 percent of GDP by end-2012, up from 51.6 percent a year before and 39.8 percent by end-2008.

A 19 percent rise in spending on civil servant wages due to the general election had also contributed to the widening budget deficit, it noted.

Hidden debt

Anwar said Pakatan Rakyat had consistently maintained that the federal government does not practice financial prudence, accountability and transparency, to which the Najib Administration responded by calling critics traitors.

Malaysia-debt-trends1

National Debt

“Instead of taking cognisance of the legitimate concerns and rectifying the situation, Najib has plunged the country into greater fiscal deficit, eating into our current account surplus and ignoring the clear signs of structural weaknesses,” he said.

Instead, he said the Najib administration had been sweeping “financial dirt” under the “off-balance sheet carpet”. Unless urgent remedial action is taken, Anwar warned that the culture of reckless spending, opaque government procurement and privatisation processes will remains the hallmark of Najib Abdul Razak’s “transformation” government.

“Let the government be warned that this cannot be allowed to continue. As the management of the nation’s public finances is not a game of one-upmanship. We urge Najib to stop grandstanding and immediately step up to the plate to put the nation’s and the people’s interest above self and partisan interests,” he said.

17 thoughts on “It’s Time for Ostrich Najib to get real: Pay Attention to Our Finances

  1. There is a major conflict. One cannot be a CEO and FD at the same time. There is no check and balance. It will be a disaster.
    No need to restate where Malaysia is today.

  2. Not to worry . There is plenty of padi from Kedah, Ikan masin from Kelantan and Blachan from Malacca. Apa lagi orang Malaysai mau.

  3. Well, he can say he has not been officially classified as a HATER by Facebook..So ‘transformation’ to Ostrich is still ‘transformation’!!!

    Like it or not, Najib knows full well that the nation finances can be fixed with higher taxes and removing the subsidies. He may not be the one to fix it but he is also not the one who will be holding the bag when the music stops, so why should he be responsible? The situation is IDEAL for prodigal him.

    Its US, and particularly UMNO who are the fools and cowards who has put him in his ideal prodigal place.

  4. As a household, can we spend more than we earn? Obviously not, else all the “ah longs” won’t be doing such roaring business here. Many economists say as a nation that rule does not apply, and they point to US, UK and Japan just to name a few. I’m no economist, so I cannot question their wisdom, but I do see examples to the contrary and Greece, Cyprus, Spain do come into my mind. So where does our nation stand? Spend, spend and spend with our billion oil revenues that have nothing much to show or should we keep our finance in check? Rein in our deficit for a start, perhaps?
    To Dato Din & Family,
    “Selamat Hari Raya Aidil Fitri’
    Maaf zahir dan batin”
    __________________
    Thanks, Foo for your Aidil Fitri wishes. Keep writing. Tun Tan Siew Sin used to tell me that we have to live within our means so that we do not have to borrow. As Sime’s Director of Planning, I was always with him. In fact his office is next to mine on the 21st Floor of Wisma Sime Darby, Jalan Raja Laut, Kuala Lumpur. –Din Merican

  5. bigjoe99: sorry big joe, I am one of the 53.5% who didn’t vote for him… but I guess we still have to live with the decision of the 46.5% to choose him last 5th of May, this is a democratic country, so they say. We didn’t pay attention and they switched off the lights and when the lights came back, we see not only the 53.5% number who voted against him lost but the same number, 53.5%, is the national debt as a percentage of GDP… magic, only in Bolehland!!!

  6. Why can’t we borrow and incur fiscal deficits especially for long-term revenue-generating & industrial and infrastructural developments? Let our future generations share the responsibilities of paying for the costs which are more cost-effective to be incurred now rather than later to beat future inflationary costs. The future generations must not enjoy our sweat & effort now for free later. Why must we be joining the chorus of the Opposition who always opposes spending to keep our economy lively? They will also oppose if costs are cut resulting in a slowed-down economy. Certainly they will be the first to shout complaining about rising costs if subsidies are reduced or taxes are increased. Why must we be always fooled into aping the Opposition in opposing everything the Government does? Don’t you be worried too long, Najib will solve our debt problems in no time soon but be prepared for a wider-based taxation, drastic reduction in general subsidies but more focus on targetted subsidies. The Opposition will certainly complain as expected but will you be willing apes to join them?
    ______________
    My friend, this is not politics. The government in power has to be fiscally prudent, which it is not at this time. You have to explain to me why we are spending money via cash handouts via BR1M and projects at inflated cost? Najib will not solve anything. Since he took over in 2009, our country has been on auto-pilot. We think we are ok but in reality, we are drifting towards being a failed state. We cannot even tackle crime and corruption. Your optimism is misplaced.–Din Merican

  7. Din, you missed the point. Najib is not the FInance Minister for Malaysia. He’s the Finance Minister for UMNO and Barisan. Since when did anyone think he has Malaysia’s welfare in mind?

  8. Soon, the masses will have their tears for porridge
    Rgt devaluation is imminent, so is massive inflation.
    We might QE and become a banana republic.

  9. It´s amazing how the world economy is driven by credits. those who do real work produce less than 10% of growth meanwhile money supplies are not controlled their flows. loans are paid with interests which supposedly to curb oversupply of money. yet, interest rates are lowered to reduce money supply & vice versa still currency is still devalued; does central bank retire the maturity of interests paid or keep it afloat back into market cycle together with new issuance of fiat supplies? well, bankers are paid higher than those who fall under growth bracket. lastly, debt eats 40%-70% of GDP to no avail. banks are to blame when local currency is devalued.

  10. What is hurting the 90% down-rung Malaysian is the blatant Inflated costs on virtually Everything that affects the everyday ordinary folks’ lives –
    No wonder those governing are keen and too eager in mega-projects, so they do not care about fiscal Deficits, and will continue with the trend, just so that they can line their pockets and have easy access to monies & wealth…..
    And this Inflationary thing goes all the way down to the Market place….and the 90% down-rung are the ultimate suckers for all the little things they need for their stomach !
    Very soon, if the Crime Index rises, you can be certain that the Government is responsible for this shameful lack of Professional ” inability ” on the part of the Authorities like PDRM to contain, let alone to combat everyday crimes…..

  11. Datuk
    In the corporate world, the CEO cannot be the CFO at the same time. Its good governance to separate the two important positions in running a company. Same should apply to the government. Common sense isn’t? As you said correctly the current financial imprudence is partly attributable to ineffective financial control and management. Once politics gets embroiled into such an important part of our daily life, the future generations become the victim. Why were we not affected in the 70s and 80s of such crisis then? No guessing needed -the financial affairs were not abused by the civil servants and political masters (not all perhaps). In the old days I remember names of civil servants with high integrity. Nowadays its like finding a needle in a haystack. The same for political masters.
    The symptoms of a financial hardship were so apparent in the past years. Need not list them here. I think to mention all will not end the subject. We see it very frequently lately – BRIM 1 , 2, etc
    For those in the 6 and 7 series in their age, the future is scary. I am worried for my children and grandchildren

  12. The only “silver lining” in the dark cloud of gross
    financial mismanagement by our Finance Minister is that the debt is
    mostly domestic and not owed to foreigners.
    In this case, it can be paid back or reduced, but at the cost of higher and higher inflation as the govt prints more money to finance the debt.
    In the case of the latter (money owned to foreigners), we would be in serious trouble: we would have to pay back in hard currency and this means increasing exports coupled with belt-tightening at home, shifting resources to tradables (like what Greece is being forced by the troika of IMF, ECB and EU to do, to the never-ending and great suffering of the people of Greece).

    P.S. Lest we forget, vote buying during election campaigns is still
    an offence in law-abiding democracies.

  13. Why does anyone ask Najib when he is going to realize that he mismanaged our Treasury? The nincompoop thinks the Treasury belongs to HIM, to use as he pleases! The only way to get our beloved country on the right track is to sever the ostrich head that’s been buried in the sand since the time it was ‘born’.

    The public needs to really understand how our poor financial standing will affect their lives. The average man on the street may not understand the implications of a falling ringgit against the major currencies. The only time when they do is when it is too late ,,, when there is no food to fill their tummies

  14. Mr Phua
    I am disinclined to separate nation’s debt into domestic and foreign. A debt is a debt. Period.
    ______________
    Yes, but borrowing from EPF and other statutory funds (people’s savings) is easy and one does not have to worry about rating agencies. RAM may not be downgrading our treasury bonds.–Din Merican

  15. What is the solution, anybody? We cannot wait till GE 14. At the rate the country is mismanaged we could become the Asian Greece before then. I am afraid something must give.

    Din, as former SD corporate planner and economist what would you do if you were the CEO or CFO of this corporate Malaysia?

    I am 75 and will not be around much longer. Please, people, for the sake of the coming generations do something!!!
    ______________
    I will take my money out and invest in the bonds of countries with triple AAA+ rating, Swiss francs and gold. I would not be so stupid to invest in Lebanese bonds like what Mahathir did to help his friend the late Rafick Hariri, assassinated Prime Minister of Lebanon, using Bank Negara money.That is what I would do if I had money. I am sure rational Malaysians with loads of cash are already doing that.–Din Merican

  16. These are the results related to meritocracy and competency of those in charge of their jobs, proper training and skills are necessary. We must revamp our public universities for the let down: top scorer, no offer, low point for high achievers (http://rightwaysrichard.blogspot.com/2013/07/study-hard-and-be-let-down-again-top.html), producing lots of graduates whose thinking and performance are below par! How can we expect them to manage our national public finances?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.