Dr M raises eyebrow at 1MDB’s debt buildup

(MMO) – Funds for 1MDB are not from the country’s surpluses. These are debts. Billions of ringgit owed will add to the country’s very high debts. Debts that the country must pay.

Tun Dr Mahathir Mohamad has expressed concern over the debt being amassed by sovereign wealth fund 1MDB, warning that this could overwhelm Putrajaya’s already strained finances.

The former prime minister also questioned why Malaysia needed a state investment fund such as the 1MDB, pointing out that these were usually formed by countries with a surfeit of wealth and revenue, rather than one heavily in debt.

“Funds for 1MDB are not from the country’s surpluses. These are debts. Billions of ringgit owed will add to the country’s very high debts. Debts that the country must pay.

“If not, we will become bankrupt like Argentina. A country with a yearly deficit cannot possibly pay debts as high as this,” he wrote on his blog yesterday.

Dr Mahathir, who held the finance portfolio in the later days of his administration, suggested that 1MDB’s investments allowed Putrajaya to avoid parliamentary oversight for public spending, as these were not included in the Budget that is tabled annually.

He also said the off-budget investments could be used to circumvent the legal debt ceiling that Putrajaya is now just hovering under.

Read more at: http://www.themalaymailonline.com/malaysia/article/dr-m-raises-eyebrow-at-1mdbs-debt-buildup