NEED FOR TACTFUL HANDLING
The very institutions that have to ensure economic stability are under stress, writes
for returning him to power after 15 years.
That’s all well and good. But, the three-year-old GST fetched US$11 billion (RM43.76 billion) for the exchequer last year, or 3.3 per cent of the gross domestic product. Replacing it with another type of consumption tax will have to wait for the new Parliament to convene, which won’t be until the end of next month or early July.
With United States interest rates firming, all emerging economies are under pressure. Malaysia, too, has seen foreigners pull out about US$800 million from its bond market. Can Lim keep a lid on negative sentiment? This week’s events give cause for doubt.
On Tuesday, Lim issued a harsh press release after meeting officials connected to 1MDB, which the US Department of Justice believes was the epicentre of a multibillion-dollar scheme of plunder and money laundering.
1MDB is insolvent, the minister said, citing directors. Well, investors have long suspected that to be the case.
The existence of as much as US$2.5 billion of the fund’s over- seas assets is in doubt, Lim said. Even that tallies with facts.
Why else would public money be used to prop up 1MDB if it had liquid assets offshore?
In fact, Lim has himself provided a list of payments made by the Finance Ministry to 1MDB creditors. Starting last year, they add up to almost US$1.75 billion.
Give him the benefit of the doubt. Maybe he’s preparing the ground to justify use of public money to make another US$36 million interest payment on May 30.
But then, Lim went on to say that he had found 1MDB president Arul Kanda Kandasamy to be “utterly dishonest and untrustworthy”.
Arul Kanda retaliated by calling the remarks potentially defamatory. The minister had left out the context of his answers and made him look bad, he said, adding that he was seeking legal advice.
The colourful language against Arul Kanda is jarring in an official press release. Malaysia isn’t a banana republic, but a sovereign rated “A3” by Moody’s Investors Service.
Lim is no longer an opposition politician, but an important part of a new government that can initiate legal proceedings against any 1MDB officials or directors.
Corruption in high places was the reason Malaysians voted out Barisan Nasional that had ruled for six decades — including 22 years under Dr Mahathir.
Arul Kanda’s honesty isn’t what interests them. They’re waiting for Dr Mahathir to make good on his promise to bring charges against his predecessor, Datuk Seri Najib Razak.
The very institutions in Malaysia that have to ensure economic stability are under stress.
After the Wall Street Journal reported that proceeds from a land deal involving the central bank were used to pay an Abu Dhabi state fund — a 1MDB creditor — the central bank had to issue a statement saying it had bought government land at fair value.
The situation is delicate enough for Lim to pull back a little. His desire to blow the lid off the 1MDB scandal is understandable.
But, for the finance minister to pursue that goal at the expense of his day job — of keeping the economy in good shape, and investors reassured— would be inexcusable.