RM700 billion debt: Federal government should take heed of Spain, emulate Selangor

SHAH ALAM, 4 Sept: The Federal Government has been urged to take heed of the current economic situation of Spain, which now owes over USD1 trillion, 100 percent compared to the Gross Domestic Product (GDP) of the country.

The former Director of Bank Negara, Dr Rosli Yaakob, said that while three years ago the Spanish Government only owed between 70 to 80 percent compared to their GDP, they increased to almost 100 percent today despite introducing policies to increase various taxes for the people of Spain.

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“Spain failed to control their spending, causing Spain today to incur a debt of over USD1 trillion, or almost 100 percent, compared to the GDP,” said Dr Yaakob when contacted by Selangor Kini.

Dr Rosli explained that the Federal Government should make the Selangor Government as a model that practices prudent spending, blocking leakages or curbing corruption earnestly.

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“The Federal Government does not want to make the Selangor Government as an example at all. They still practice giving projects to cronies through direct negotiations. There is no austerity measures at all,” he said.

In the Auditor General’s Annual Report since 2009, the Selangor Government has been praised every year for their success of managing the resources of the richest state efficiently and with prudence, allowing the State Government to collect reserves from RM400 million in 2008 to RM3.2 billion at the moment.

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Dr Rosli added that Spain’s failure to control their debt is strong evidence that the implementation of the Goods and Services Tax (GST) will not have a positive impact on the economy and the national debt, and instead the government should erase their habits leaning towards wastage, leakages and corruption in advance.

He added that the national debt, which was reaching RM700.1 billion in the first quarter of this year, as announced by the Governor of Bank Negara, Tan Sri Dr Zeti Akhtar Aziz, proves that the Federal Government did not carry out their promise of controlling spending, thus reducing the national debt.

NS

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