Guan Eng says the debts incurred by the previous administration must now be fully shouldered by the new government.
KUALA LUMPUR: Finance Minister Lim Guan Eng has slammed former prime minister Najib Razak for attempting to deny the real amount of debt that the country is facing.
He said it was now Pakatan Harapan that had to shoulder that debt.
“Najib keeps stressing that the direct debt is RM687 billion or 50.8% of the GDP while the fact is that Malaysia has to shoulder a far larger amount.
“So when Najib uses the Moody’s report as proof that the country is not faced with a RM1 trillion debt, he’s only denying the truth,” he said after a buka puasa event at the Palace of Golden Horses today.
Lim said he was not denying the Moody’s report but RM1 trillion was the amount after totalling up all the debts.
“Yes, Moody’s said the federal government’s direct debt was RM687 billion. But we have to take into account the guarantees the previous government made which was the indirect debt.
“For example, you borrow money to buy a house but at the same time, you become a guarantor to your friend who has also taken out a loan to buy a house. If your friend can’t pay that loan then you have to not only pay your loan but your friend’s as well,” he said.
Lim cited 1MDB’s inability to pay its debt and said it was now, the current government’s responsibility to make the payments.
“1MDB is now bankrupt. Who has to pay that debt if not the current government?
“We are now in the process of decreasing the government’s debt so that the people do not feel the burden” he said.
Najib today said the Moody’s report, which had maintained its estimate of the government debt at 50.8% of the GDP as it was in 2017, showed there was no truth in the figures given by the PH government.
In the report published today, the agency said the assessment of the risk of contingent liabilities posed by the non-financial sector public sector has also remained unchanged despite some statements made by the current administration.
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