Exactly a week ago, Dato Seri Idris Jala was ‘quoted’ by The Malaysian Insider as saying “Malaysia could still become bankrupt within a decade if it spends borrowed money on operational expenditure such as subsidies instead of investing the cash.”
The opposition portal also alluded that this statement triggers alarm bells with forecast of bankruptcy.
As the result, blogger SatD made a scathing attack on Idris Jala in his blog and this writer further enquired through twitter on his statement particularly the part where the government could have breached some fiscal rules and guidelines (please refer here).
Below is the twitter conversation this writer had with him concerning the issue:
@IdrisJala_ implying e Finance Minister @NajibRazak didn’t follow fiscal rules n had mixed up e revenue/subsidies & borrowings/devlpmnt?PM @NajibRazak n Husni Hanadzlah must answer what @IdrisJala_ had said; that Finance Ministry had broken e fiscal guidelines.
Pls watch my speech on video, I spoke positively abt our economy! I spent 1 hour explaining what the Govt is doing
@JebatMustDie @NajibRazak @JebatMustDie. I was responding to a question using scenarios (IF assumption). Under ETP, Msia shd be high income economy (not bankrupt)TQ for d reply TS @IdrisJala_ but it didn’t answer e Q. Is govt breaking e fiscal rules by using borrowings to finance subsidies? TQ @JebatMustDie. The govt is NOT breaking any fiscal rules! I hope you listen to my video (presn and QA). Nothing wrong with what I said.Sloppy reporting from TMI. Has PEMANDU rectified e article? RT @IdrisJala_: Now u know! What ppl say can easily be reported differently.
As the result of intentional spin by The Malaysian Insider, The Mole contacted Idris Jala directly over this miscommunication and published an article to straighten the whole issue:
Idris Jala: ‘IF” is the word
By Azreen HaniThursday, November 3, 2011
KUALA LUMPUR: Minister in the Prime Minister’s Department Datuk Seri Idris Jala has called on his critics and those bent on running down the government’s Economic Transformation Plan to listen carefully to his statements.
Stressing that the government did not break any fiscal rules, as implied by a newsportal, Idris who is also the Performance Management & Delivery Unit (Pemandu) chief said his statement about the country going bankrupt had once again been reported in bad light.
Idris was responding to a question posed on to him by blogger Jebat Must Die via micro blogging site Twitter.
Jebat Must Die had questioned Idris if it was true that the government breached fiscal rules by using borrowings to finance government subsidies.
In his reply Idris he tweeted: “The govt is NOT breaking any fiscal rules! I hope you listen to my video (presn and QA). Nothing wrong with what I said.” (The government is not breaking any fiscal rules! I hope you listen to my video (presentation and QA). Nothing wrong with what I said.)
The question was raised by the blogger based on a report by The Malaysian Insider which stated that Malaysia could become bankrupt if it spends borrowed money on operational expenditures such as subsidies instead of investing the cash.
Jebat Must Die in his latest blog posting asked whether Idris was implying that there is dereliction of duty by the Minister of Finance pertaining the government’s its fiscal responsibilities.
“Is he (Idris) saying that Malaysia will go bust if Government continues to finance subsidies through borrowings? Since we know that it is against the law to do that, we are now stuck in a quandary.” Jebat Must Die queried.
The fiscal rules and guidelines stated that operating expenditure is financed through revenues while borrowings are only used for development expenditure.
Idris pointed that his statement was reported differently.
Another blogger, SatD, the first to raised the issue following the newsportal report also pointed that Idris must be able to differentiate between development expenditure and operating expenditure of the government.
“What you are saying is misleading and reckless for someone of your position…..you give the impression that our Government does not have any financial discipline and does not adhere to the Law as provided for by the Constitution and its guidelines,” he wrote, criticising Idris for his statement (as reported by the news portal).
An officer from ETP’s corporate communications unit told The Mole the news portal did not report Idris’s comments in its actual context.
Idris, during the Q and A session inconjunction with ETP’s first year anniversary on Tuesday, gave a briefing on programme’s progress and answered a host of queries from the public.
Responding to a question on the rationalisation of subsidies and his past statement that the country could face a possibility of going bankrupt, Idris re-iterated that his statement on the country being bankrupt was based on a presumption that ‘IF nothing was done” to improve the economy.
“If our economy grows for the next ten year with less than 4 per cent, if we grow with only 3 per cent and we do not curb our operational expenditures which includes subsidies, and we need to borrow at 12.5 per cent, if our annual debt rises at 12.5 per cent per annum as we did in the last 10 years, and if our revenue does not grow, then we’ve had it. The presumption of we’ve had it means we would have reached our debt position of 100 per cent of GDP by 2019.”
Idris pointed that the introduction of ETP showed the government’s seriousness developing the economy in a very focused manner while ensuring Malaysia and her people achieved greater prosperity.
On suggestions that the government should not borrow money as it would increase national debt, Idris said it was not wrong to borrow.
“We should borrow the money provided that it is spent as an investment, (like) development expenditure (rather) than operating expenditure.”
“That is why when you run an economy of the country; we need to make sure our borrowing is proportionately focused on the investment,” he explained.
Pemandu has also released the full context of Idris’ comments on the need for Malaysia to keep GDP (gross domestic product) growing, as well as clarifications on the “bankruptcy” issue.
Time and time again, The Malaysian Insider was caught spinning what would be considered as a deliberate attempt to mislead their readers. This practice must stop. The country’s economic prospect looks fine. I believe the opposition has no more issue to criticise the Government in order to rile the public to vote against It.
The latest attempt by Anwar Ibrahim is one of them.
What Idris Jala should have said and promote to public is this: With ETP, Malaysia will not face bankruptcy. Full stop.