Malaysian Finance Minister Says Government Is Working To Strengthen Economy

Mahathir bin Mohamad
Malaysia's Prime Minister Mahathir Mohamad poses for a portrait in Langkawi, Malaysia March 28, 2019. (Photo: REUTERS/Feline Lim)

Malaysia's Finance Minister Lim Guan Eng said the government is on the right towards becoming one of Asia's Tiger economies at it seeks to bring down the country's current debt and liabilities in trillions.

According to The Sun Daily, the Malaysian government under Prime Minister Tun Dr. Mahathir Mohamad is aiming to reduce the country's liabilities and debts amounting to RM1.087 trillion. The huge amount was largely incurred before Mahathir defeated his rival last year in a historic election that saw Malaysia's greatest shift in power.

Lim said the biggest challenge that Mahathir's administration had to face upon taking over the Malaysian government was debt reduction. Federal government debt amounted to RM686.8 billion when Lim was appointed as the Finance Minister.

Despite stumbling blocks, Lim said the Pakatan Harapan (PH) under Mahathir has done well to trim down debts. "After a six-seven month effort by the government, the debts and liabilities were reduced to RM1.07 billion or a reduction of RM17 million," he noted.

According to Lim, transparency should continue to be a priority of the government. He said there should be increased transparency in cases such as the 1Malaysia Development Bank (1MDB) controversy that involved former Goldman Sachs banker, Roger Ng.

Aside from reducing debts, the PH government has also started repaying tax refund arrears. Lim said arrears incurred by the previous government stood at RM37 billion. Paying off the amount is expected to be finished by October.

Foreign direct investments (FDI) also saw a hike last year. FDI inflow increased by 48 percent, accounting for RM80.5 billion in investments across various sectors in the Malaysian market.

Lim pointed out that financial issues over the past months stemmed from the 1MDB scandal but investors were keen on trusting the country's ability to rebound from the issue of stolen funds.

The Department of Statistics Malaysia (DoSM) echoed Lim's statements in a new update about the Malaysian economy in 2018. According to the DoSM, the economy reached RM1.45 trillion last year. The organization added that the 11th Malaysia Plan is looking to increase the country's gross national income (GNI) to RM47,720 next year.

The agency explained that Malaysia's manufacturing and services sectors helped spur growth in the economy. The services industry alone exceeded expectations of 56.5 percent to reach 56.7 last year.

With Singapore and the U.S. set to return millions to Malaysia to help resolve the 1MDB controversy, economists are expecting the economy to further expand in the coming months.

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