NAJIB: REFORM POLICIES DELIVERING GOOD RESULTS
Even neutral observers have commended our achievements, says Prime Minister Datuk Seri Najib Razak in this interview
reached their status at the consequence of wide income disparity between the rich and the poor. Their governments had also accumulated massive debt resulting in unsustainable fiscal positions.
That is where Malaysia was headed prior to 2009. Our debt had been climbing at a rate of 10.2 per cent per annum in the last 10 years. If the government had not reined in its spending or its borrowing, our fiscal position would be similar to the likes of countries like Greece, Spain and Portugal by 2019.
And so, I made a decision with my cabinet members to alter course. Only 10 per cent of highincome countries went down the similar path Malaysia embarked on in 2010; Switzerland, Sweden and New Zealand being some of them. They reached high-income status with a sustainable fiscal position; their finances are in surplus or are balanced. These countries have also narrowed the gap between the rich and the poor.
That was the basis of our transformation model.
As you rightly put it, the challenges for the government are aplenty. My cabinet and I examined the road Malaysia was on prior to 2009 and we agreed that if we continue to carry out business as usual, the consequence would be that Malaysia would accrue insurmountable debt as a result of unsustainable borrowing leaving the government in a highly precarious fiscal position.
Since 2010, we have done three things to steer Malaysia back onto a road of sustainable fiscal position. Firstly, we removed fuel subsidies. This was politically unpopular, but based on the counsel of various economic and finance experts, it had to be done. Fuel subsidies had reached RM25 billion, accounting for 13.6 per cent of the total national budget. As of 2015, we had managed to save RM22 billion from subsidies and deployed targeted subsidies to the needful instead.
Secondly, we’ve also reduced government dependence on oil revenue from 41 per cent when I assumed office in 2009, to just 14 per cent today. This dramatic reduction is largely due to a boon in
(Clockwise, from top left) The GST, Urban Transformation Centres, Light Rail Transit extension, MRT and 1Azam are products of the National Transformation Programme.