LIM Guan Eng’s zeal to blow the lid off the 1Malaysia Development Bhd scandal is understandable, but there is no excuse for it to overtake his main responsibility, which is to nurse the nation’s finances back to health, reported Bloomberg.

While his hard-hitting disclosure of 1MDB’s state of affairs and the nation’s debts in his first days as finance minister may have come with good intentions, it has not done much to sustain investor confidence.

The report said foreigners have sold out of the nation’s stocks for 13 straight days following Barisan Nasional’s shocking defeat at the hands of Pakatan Harapan in the 14th general election, and Lim’s confirmation of the prime minister’s statement that the country is RM1 trillion in debt, due to a “sly public bailout” of the troubled 1MDB, may earn him points for honesty, but not tact.

It said the debt amount is 45% higher than previously reported, and could have been made known to the public only when the minister had a solid payment plan in place.

Lim has also said 1MDB is insolvent, and after a meeting with the fund’s president, Arul Kanda Kandasamy, called him “utterly dishonest and untrustworthy”.

Bloomberg said such language from a minister holding an important office, who can initiate legal proceedings against 1MDB, is jarring, adding that “Malaysia isn’t a banana republic, but a sovereign rated A3 by Moody’s Investors”.

Giving Lim the benefit of the doubt, said the report, his move could be seen as a way to justify the use of public funds to pay off 1MDB’s interest payments on its borrowings, amounting to US$36 million (RM143.75 million), due on May 30.

The PH government is short on revenue, having announced that the goods and services tax will be zero-rated starting June 1, and will be replaced by the sales and services tax.

The implementation of SST, however, can only be done after Parliament convenes, which will not be until the end of next month or early July.

One of PH’s election pledges was to abolish the unpopular GST, which has been cited as a burden on Malaysians. Last year, the consumption tax contributed US$11 billion to the nation’s coffers, or 3.3% of gross domestic product.

The report questioned why Lim seemed willing to risk leaving investors with a shaky fiscal outlook, given that firming US interest rates are putting pressure on emerging economies, and foreigners have pulled out US$800 million from the Malaysian bond market.

Whether the minister can turn around the current negative sentiment, it said, the events of the past few days give cause for doubt. – May 24, 2018.