‘Najib’s move to cut reliance on oil revenue saved country’
KUALA LUMPUR: The move to reduce Malaysia’s reliance on petroleum revenue by Prime Minister Datuk Seri Najib Razak has proved to be crucial.
Barisan Nasional Strategic Communications (BNSC) deputy director Eric See-To said since Najib took office, the country’s reliance on petroleum revenue was reduced from 44 per cent to 14 per cent.
This proved to be the correct decision to “save Malaysia”, he said in his Facebook posting, adding that this was why the International Monetary Fund and the World Bank praised Malaysia and its government policies.
“Despite the fact that petroleum price dropped (by) 80 per cent at one point, Malaysia did not slide into a recession and our economy continued to grow during that difficult period, and has now accelerated, this year.
“It is praiseworthy that despite an 80 per cent drop in petroleum price, Malaysia, which had depended heavily on oil revenues and exports, did not suffer as badly as other countries,” See-To said.
In stressing his point, he said ever since the collapse of the oil price, Saudi Arabia, a country that was heavily dependent on petroleum revenue, had been running huge budget deficits.
“The Saudi Arabian Monetary Authority’s net foreign assets had shrunk to US$485.9 billion (RM1,979 billion) in October this year from US$737 billion in August 2014 as the government liquidates them to cover the budget deficit caused by low oil prices.”
Saudi Arabia and United Arab Emirates would be implementing the Goods and Services Tax (GST) starting Jan 1, and unlike Malaysia, it had fewer exemptions, See-To said
“Brunei, which depends on petroleum resources for 60 per cent of its economy and 95 per cent of its exports, is not spared (from the effects of fluctuating oil prices).
“Its government spending has dropped to B$5.3 billion (RM16 billion) for this year. This is a drop from last year’s B$5.6 billion, B$6.3 billion in 2015 and B$7.3 billion in 2014, which resulted in (budget) cuts in health care, citizen benefits, government servants pay and allowance, as well as a hiring freeze.”
“Brunei and Saudi Arabia went into recession due to this drop in prices. This shows that having huge (reserves of) natural resources does not mean that your country can get away with undisciplined financial management and not having sustainable prudent economic policies.”