The Malaysian Insight

NEARLY RM1 billion of money stolen from state firm 1Malaysian Development Bhd (1MDB) has been returned to Malaysia as of June, said the Finance Ministry.

The RM980 million recovered from local and overseas sources will go towards paying off 1MDB’s RM32 billion debt accrued on former prime minister Najib Razak’s watch.

1MDB’s debt, which the Pakatan Harapan government now has to pay, is part of the overall RM1.170 trillion in direct debt, committed guarantees and other liabilities Putrajaya owes as of June.

Direct federal debt amounts to 52.6% of gross domestic product, while total debt, including guarantees, 1MDB and other liabilities, make up 77.1% of GDP.

“Due to mismanagement and poor governance, the government has to assume 1MDB’s entire obligations including the debt principal of RM32.2 billion,” the ministry said in its 2020 Fiscal Outlook and Revenue Estimates report.

“As at end-June 2019, the government has extended advance of RM8.9 billion to 1MDB for debt servicing,” said the report ahead of the tabling of the 2020 budget.    

The 1MDB saga has triggered fraud and money-laundering investigations in six countries and has been described by the US Department of Justice as the largest kleptocracy case in the world.

It is estimated that about US$4.5 billion was stolen from the state firm established by former prime minister Najib, and used to buy luxury properties, art works, jets, yachts, and to fund political parties.

Najib himself is on trial for four counts of power abuse to enrich himself with RM2.3 billion from 1MDB and 21 counts of laundering the same amount.

The Malaysian Anti-Corruption Commission meanwhile has started court proceedings to seize and reclaim about RM270 million from foundations, political parties and individuals all linked to Najib and the Barisan Nasional he headed.
 
Besides 1MBD debt, the ministry said direct federal government debt amounted to RM799.1 billion as of June, up from RM741 billion in 2018.

Committed government guarantees (CG) stood at about RM157.3 billion in 2019, up from RM132.7 billion in 2018. 

CGs are given out to help certain firms get loans for public interest projects and initiatives.

In 2019, some of the new allocations for CG initiatives include the mass rapid transit 2 extension, the Pan Borneo Highway and housing for civil servants.

Other liabilities which include public-private partnership initiatives (PPP) and public finance initiatives (PFI) total RM181.7 billion in 2019, up from RM184.9 billion in 2018. – October 11, 2019.