KUALA LUMPUR, Malaysia While the amount collected from trust fund, Tabung Harapan Malaysia (THM) might seem relatively insignificant, the donations are likely to be utilised to service the government debt with earlier due dates.
The government debt has exceeded a whopping RM1 trillion, while donations to the THM stood at RM66.67 million as of 3 pm on June 14.
RHB Research Institute Sdn Bhd Chief ASEAN Economist Peck Boon Soon opined that the fund could possibly contribute to the 1Malaysia Development Bhd (1MDB) bond interest worth RM810.21 million due between September and November this year.
“Although the fund size is small when compared to the massive debt amount, I am confident that it will be spent on debt settlement rather than any other purpose, as the crowdfunding movement is purely a patriotic manoeuvre that shows the people’s support for the government,” he told Bernama.
There has been criticism over the real “motive” behind the launch of the THM on May 30, 2018. But, Prime Minister Tun Dr Mahathir Mohamad had made it clear that the crowdfund initiative, was aimed at reducing the national debt and formed in response to the people’s concern over financial mismanagement by the former Barisan Nasional government.
Peck noted that Malaysia was not the first country to launch such a crowdfunding effort at the national level, as South Korea had initiated a similar campaign during the 1997/98 Asian Financial crisis or better known as IMF (International Monetary Fund) crisis to the locals.
Asked if the government should set a timeline or fund target to provide a clearer guidance for the people to “save” the country, he, again, reiterated that the donation was merely a campaign of patriotism.
“Furthermore, Finance Minister Lim Guan Eng had mentioned earlier that there would be no cap on the limit to donations, and the fund size would continue to expand time went by, he added.
Lim had reportedly said that the RM1 trillion debt as at Dec 31, 2017, included RM686.8 billion in Federal government debt plus RM199.1 billion of government guarantees to be paid on behalf of entities which were unable to service their debts.
The minister, however, highlighted that Malaysia’s economic fundamentals remained strong, the financial sector was stable, the banking sector well-capitalised and there was sufficient liquidity in the market.
Meanwhile, the crowd-funding Maybank account (A/C 566010626452) under THM will remain open until it hits a sizeable target.
However, no specific amount and timeline has by provided by the government, thus far.
Lim gave an assurance that the government would systematically and transparently manage all the contributions, and the fund collected would be updated on the Ministry of Finance’s (MoF) website and on its social media platforms on a daily basis.
Tax exemptions would also be given to all donors, including companies.
Source: NAM News Network