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Idris Jala’s rectification

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:

Is @IdrisJala_ implying e Finance Minister @NajibRazak didn’t follow fiscal rules n had mixed up e revenue/subsidies & borrowings/devlpmnt?

2 Nov via UberSocial for BlackBerry 

@JebatMustDie

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
2 Nov via Twitter for BlackBerry®
@JebatMustDie. I was responding to a question using scenarios (IF assumption). Under ETP, Msia shd be high income economy (not bankrupt) 

2 Nov via Twitter for BlackBerry®

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 

2 Nov via UberSocial for BlackBerry

@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. 

2 Nov via Twitter for iPad

M’sian Insider wrote differently from what u said @IdrisJala_ @etp_roadmap -bit.ly/tUUHKp (cont)

2 Nov via UberSocial for BlackBerry

Now you know! What people say can easily be reported differently.@JebatMustDie @etp_roadmap

2 Nov via Twitter for BlackBerry®

Sloppy reporting from TMI. Has PEMANDU rectified e article? :) RT@IdrisJala_: Now u know! What ppl say can easily be reported differently.

2 Nov via UberSocial for BlackBerry

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.

Screen capture of the tweets

 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.

Thank you.


9 Comments

  1. Adam says:

    I don’t think we should be shocked by reports done by TMI. Journalism at its worst.

    Adam

  2. satD says:

    Proofiness has become a viral disease of late.

    I’ve listened to the video, there was no need for him to mention a scenario that is legally against the rule in order to sell his doomsday prediction.

    Sovereign defaults are a function of many variables, I’m surprised that Pemandu with the help of BCG could only come up with such sekolah rendah level scenario analysis in predicting the “bankrupt” scenario. refer here  Idris logic.

    Let me ask a simple question for those who thinks that they know about the subject.

    Was Jala’s scenario analysis only looking into the behavior of FX Loan defaults experiences or did he look into the domestic debts? How is the trend and composition of domestic Vs foreign debts prior to default event?

    If our debts are heavily denominated in local currency and we suffer a very high inflation is this not a method for the Government to default on its obligation, even tho they still pay the interest and principal?

    Panjang cita pulak dhows…

    For those who are interested on the subject matter refer here 8 Centuries data on Sovereign Default and Financial Crisis  

    Dude…what’s up with the scathing attack….u make me sound like some mamat ganas beb

  3. Anon from afar says:

    Idris and PEMANDU talks too much. More than the MOF and overly quiet MOF II. That’s the problem.

    And BTW, can Idris stop his accented English.

  4. Black mamba says:

    Yelah, Tony F also do not know the difference between OPEX and CAPEX.
    He has been known to borrow money just to pay his staff bonuses.

    Malaysians, be wary of of your money in the bank, be worried, very worried.

  5. tenno says:

    Malaysian need to do something to escape the income trap but by saying bankruptcy is the highest imminent threat to the economy may not be a suitable argument. The parameter used is too shallow with do nothing is the centre of argument. Economic is not always a quantitative measurement and rquire a lot of parameters to jsutify the claims, its dynamism is something that so complex associated with human behaviour that say even if the government do nothing including borrowing, the situation 10 years from now will definitely not the same because supply and demand will evolve along with human behavior over time. We may not be bankrupt by 2019 but we may get poorer if the rakyat do nothing. Government has its limitation, but truly rakyat is the main pillars of tomorrow success. Take Korea, their main economic contribution does come from innovation sector, with Samsung turnover is almost equal to few countries’ GDP putting together.

  6. A Voice says:

    That’s the problem with taking Minister’s for sake of covering up their failure in assignment (ie unable to turn MAS into operating profiability) and too impress with their skill in using Powerpoint presentation (typical of Shell product).

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