Malaysia finance minister defends collecting public donations to help settle national debt

Malaysia finance minister defends collecting public donations to help settle national debt

Malaysia’s new Finance Minister Lim Guan Eng blames former Prime Minister Najib Razak for the country’s staggering debts and talks about his uphill task to restore Malaysia’s economic fortunes.

KUALA LUMPUR: Malaysia Finance Minister Lim Guan Eng has defended the collection of public donations through the "Fund of Hope", which he said will go towards settling the nation's debt, including that of controversial state investment firm 1Malaysia Development Berhad (1MDB).

In an interview with Channel NewsAsia's Conversation With, Mr Lim was asked about this unorthodox method of raising money from the public by the nation's first Pakatan Harapan government, which came into power on May 9.

The fund was created after Malaysians started crowdsourcing donations themselves following the revelations by Prime Minister Mahathir Mohamad and Mr Lim that the previous administration had accrued debts and liabilities exceeding RM1 trillion (US$250 billion). 

As of Thursday, the fund had reached more than RM90 million in contributions.

"This government is going to be unorthodox, but let us be unorthodox for the right reasons," Mr Lim said. "Of course, we have also been criticised for setting up this Malaysia Hope Fund, but this is not so much about getting enough funds to repay our debts - One trillion is a huge amount by any standards.

"But when we set up the fund, our main intention was to allow the people to come together so that everyone can do their bit, do their part, even if they give RM1, RM10, RM10,000, they contribute towards saving the country," he said.

Despite the debt being too big to be covered by the fund, he said the money will still be used exclusively to pay off what the federal government owes. An auditor has been appointed to monitor the operations of the fund.

"If there's a 1MDB debt, payment coming along, perhaps we’ll use (the money) to pay 1MDB debt repayment," Lim said.

1MDB was advised by former prime minister Najib Razak and has now been declared insolvent by the new government. Mr Lim said the previous administration had downplayed its financial state, with RM38 billion of payments still due, going up to RM50 billion with interest.

Malaysia has launched criminal and civil investigations into the state investment firm, which is also being investigated in at least six other nations over allegations funds were misappropriated from 1MDB.

EXPOSING SCANDALS WILL ENCOURAGE INVESTMENTS

Mr Lim also told Channel NewsAsia that his exposing of financial scandals will help spur investments in the long term amid criticism he has been too transparent and political in his statements.

"I do admit that there have been some criticisms that I should be more tactful than truthful, but I feel that the truth shall set you free," he said. "I think that the time has come for Malaysia, the new Malaysia, to show its true face - upholding the truth, that what you see, is what you get. 

"And I think that would in the long term, gain the confidences and the appreciation of the financial community ... Because when you are able to gain their confidence, investments will flow in."

Within weeks of taking office, after a shock victory for Pakatan Harapan, the former two-term Penang chief minister made a series of dire revelations about Malaysia's finances including that its debts and liabilities are significantly worse than what had been previously revealed.

He told Channel NewsAsia that the government hopes to uncover all the scandals of the past administration within the first 100 days so it could move on. 

Mr Najib, however, has slammed the new government for "unnecessarily spooking the market" and causing "real losses to stock market investors and our GLICs (government-linked investment companies)".

Since Channel NewsAsia's interview, People's Justice Party leader and former finance minister Anwar Ibrahim has suggested that Mr Lim should ask someone else to handle the exposes and focus on pacifying investors instead, reported Astro Awani. 

Mr Lim responded by saying he was acting on Mahathir's wishes.

"We want to comply to international norms and we want to do things the right way," he told Channel NewsAsia.

Editor's note: An earlier version of this report stated that more than RM900 million had been collected in public contributions to the Fund of Hope. This is inaccurate. It should be RM90 million. We regret the error.

Source: CNA/na

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