KUALA LUMPUR (SIN CHEW DAILY/ASIA NEWS NETWORK) - Prime Minister Tun Dr Mahathir Mohamad, the new Minister of Finance Lim Guan Eng and the new Cabinet must be congratulated for revealing officially and publicly that our national debt is as dreadfully high as RM1,087 billion (S$365.41 billion) or exceeding RM1 trillion for the first time in our history.
The prompt and transparent manner of this revelation so soon after the Pakatan Harapan (PH) government took over after 60 years of Barisan National rule, is impressive.
This is particularly so because the government-guaranteed loans to government-linked corporations (GLC's) and public-private partnerships (PPP's) and other public sector entities were never fully revealed or clearly explained to the public during the past 60 years.
Hence, this dreadful debt revelation is a most welcome tribute to transparency and accountability, and shows a definite move towards greater integrity and the adoption of good governance in New Malaysia.
We can only hope that the new PH government will carry on this commitment to good governance persistently and consistently in the future.
Otherwise, even the new PH government will face severe criticism as evidenced by the strong and unprecedented reaction against the past Barisan Nasional government's poor performance in and indifference to good governance.
How dreadful is the national debt?
Firstly, the official debt of the federal government itself is given as RM686.8 billion or 50.8 per cent of the GDP, which is regarded acceptable by international standards, by the World Bank, the IMF and also rating agencies.
No one has found it necessary to sound alarm bells that our debt is dreadfully high at this stage.
It's manageable now, although we have been advised to watch the rising debt and to be more cautious, as it can easily get out of hand in the wrong hands.
What is worrisome, however, is the revelation that several agencies outside the government, such as IMDB, etc., have defaulted in settling the capital and interest of their government-guaranteed loans.
This already amounts to a staggering RM199.1 billion or 14.6 per cent of the GDP, according to Minister of Finance Lim Guan Eng.
The question now arises in the public mind as to how these public entities lost such huge sums of money and who are responsible for the mismanagement of our tax money since we in the end have to pay through our noses to bail them out.
The real debt is now therefore estimated at RM885.9 billion, which is 65.4 per cent of our GDP and definitely not RM686.8 billion or 50.8 per cent of GDP as we were told before.
This is indeed the dreadful debt revelation!
These figures should have been highlighted to the public before. We were somewhat misled into believing that our debt was lower and the World Bank and IMF too kept strangely quiet, unless they had warned the government privately.
But these International Institutions have a duty to be transparent to the public as well.
What should be done to deal with this rising national debt?
Firstly, we should review and revise all our government-guaranteed loans to all entities like Dana Infra (RM42.2 billion), Malaysia Rail Link (RM14.5 billion) and 1MDB (RM38 billion), among others.
The balance of RM201.1 billion guaranteed as lease payments for the PPP list of development projects should also be reviewed for feasibility and viability, before they become liabilities too.
If some projects were handed to underqualified contractors or cronies, then they must be carefully monitored for possible failures before it is too late.
The national debt policy must be reviewed, revised and monitored more closely to avoid past mistakes and avoid falling deeper into debt.
There must be a new debt policy that will be comprehensive and transparent for the rakyat to appreciate and approve.
The writer is the Chairman of the Center for Public Policy Studies at the Kuala Lumpur based Asian Strategy and Leadership Institute and a regular contributor to Sin Chew Daily. The paper is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media entities.