High debt, weak administration add to Malaysia’s economic challenges, says Anwar

• “The Madani Budget must have the ability to bring together all the strengths to be translated into new solutions.”

KUALA LUMPUR (Feb 24): The country faces five core challenges in its domestic economy — a debt level that is too high, a decline in quality of administration, global economic uncertainties, a slow recovery in investments to pre-pandemic levels, and the impact of economic challenges on the rakyat — said Prime Minister Datuk Seri Anwar Ibrahim.

Anwar, who is also the finance minister, said “the question is whether there is political will to affect change”, as he tabled the revised Budget 2023 themed “Madani Budget”.

Speaking in the Dewan Rakyat on Friday (Feb 24), Anwar said he intends to table "the real facts" rather than opting for "captivating" figures in order to accurately present the state of the nation.

For example, the government expects total debt to reach RM1.2 trillion or over 20% of gross domestic product (GDP) in 2023. If it reaches RM1.5 trillion or 80% of GDP, debt service charges will reach RM64 billion or 16% of revenue, exceeding the 15% commonly practised, he said.

Raising debt to fund megaprojects without benefits “raises the question of whether we are betraying the trust if the younger generation is burdened with debt”, he said.

Govt lost RM10 billion in fuel subsidies due to leakages

Anwar pointed out that the government lost almost RM10 billion in diesel subsidies due to leakages in implementation and abuse of the subsidy mechanism.

He added that an ineffective import duty collection process had caused the government to lose RM72 million, and that the government lost some RM3 billion due to loss of public funds by various agencies, wastages and irregular payments.

“The Madani Budget must have the ability to bring together all the strengths to be translated into new solutions.

“I want to take this opportunity to invite political leaders, leaders of ministries and public servants, as well as entrepreneurs and the rakyat, to believe in the reality that the government can spur growth…not only to be emulated by neighbouring countries but around the world, and at the same time reinstate confidence among the people,” said Anwar, who was also the finance minister between 1991 and 1998.