Lim Guan Eng is deficit-blind

Lim Guan Eng has a penchant for telling lies. After having insisted that the national debt was RM1 trillion, he told the Dewan Rakyat when tabling Budget 2019 that as of the second quarter of 2018, the national debt was RM725.2 billion. Source (pic): TTF Files

Yesterday, Lim Guan Eng announced that our country achieved the highest realised FDI in history, citing a 94.8 per cent jump in its worth from RM11.2 billion the first quarter last year to RM21.7 billion during the same period this year.

However, he failed to mention that the GoM undertook to sell its own assets during the fourth quarter of 2018 and is now gloating about increased investor confidence by referring to proceeds from those sales as FDI.

That’s more or less like a guy selling off his house for RM1 million and telling everyone that the person who bought it was confident enough to ‘invest’ in him even though he no longer owns the house.

Had the GoM not allowed foreigners to ‘rape’ Sapura and IHH Healthcare, the actual realised FDI for the first quarter of 2019 would have been RM12.1 billion, a mere 8 per cent jump from the value recorded during the same period last year.


KOTA KINABALU: These days, the global experts are saying very unsavoury things about the future of the Malaysian economy.

On Monday, Morgan Stanley Research forecasted that the ringgit would slide against the greenback compared with current levels for the whole of 2019.

Prior to that, on the 10th of May 2019, UOB Research revealed that Malaysia had recorded a RM11.2 billion portfolio outflow in April that comprised RM9.8 billion in debt securities and RM1.4 billion in equities.


This, according to UOB, was the highest pull-out by foreign investors in 10 months, meaning, the guys abroad weren’t exactly convinced that our economy was doing well.

Interestingly, the figures from UOB tie up completely with the position DBS Research took on bonds issued by the Government of Malaysia (GoM).

On the 2ndof May 2019, the Singaporean based research firm downgraded our bonds to “neutral” by citing rising valuation and mounting risks.

That’s just another way of saying that the GoM is at a higher risk of defaulting its obligations to people who lent it money and partly explains the RM9.8 billion debt security pull-out by foreign investors.

And yet again, we can see that people from abroad are scampering even though the securities they’re leaving behind are mostly government guaranteed.

But here we have Lim Guan Eng telling us an entirely different story.

Yesterday, the Minister of Finance announced that our country had achieved the highest realised FDI in history, citing a 94.8 per cent jump in its worth from RM11.2 billion the first quarter last year to RM21.7 billion during the same period this year.

According to him, the improvement demonstrated the ‘strength’ of the economy and the rising confidence that foreign investors had in Malaysia and its government.

Granted, his arguments were hinged on Foreign Direct Investment (FDI), which is more of a long term thing and involves the establishment of direct business interests, unlike Foreign Portfolio Investment (FPI), which has more to do with the buying and selling of debt securities and equities for shorter term gains.

Still, he wasn’t telling us the full story.

Hours after his media gloat-session, Dato’ Seri Najib Tun Razak revealed that RM8.4 billion of the so-called RM21.7 billion ‘feat’ was in fact from Japan and amounted to proceeds from the sale of Khazanah Nasional’s stake in IHH Healthcare Berhad.

The former premier added that another RM3.7 billion was from Austria and comprised proceeds from the purchase of a 50% stake in Sapura Upstream Sdn Bhd by OMV Exploration & Production GmbH.

“These two sales were announced in the fourth quarter of last year, but the monies only came in this year, and therefore it was only regarded as realised investment in the first quarter of this year,” he wrote.

Najib is correct.

The GoM undertook to sell its own assets during the fourth quarter of 2018 and is now gloating about increased investor confidence by referring to proceeds from those sales as FDI.

That’s more or less like a guy selling off his house for RM1 million and telling everyone that the person who bought it was confident enough to ‘invest’ in him even though he no longer owns the house.

Had the GoM not allowed foreigners to ‘rape’ Sapura and IHH Healthcare, the actual realised FDI for the first quarter of 2019 would have been RM12.1 billion, a mere 8 per cent jump from the value recorded during the same period last year.

That makes sense, particularly when you consider the head-on plunge in Foreign Portfolio Investments, the 7.6 per cent soar in our national debt and the RM300-odd billion outflow from the stock market since Pakatan Harapan took over government.

And here we have Guan Eng telling us that foreign investors are more confident with the way the Malaysian government and economy are run.

THE THIRD FORCE

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