THERE needs to be political reconciliation in the economy to solve the national debt issue, said Paya Besar member of parliament Mohd Shahar Abdullah in the Dewan Rakyat today.

He said the national debt should not be used as political capital to gain support, and pointing fingers will only push the country towards endless problems.

‘’All the parties in this House have had the experience of ruling the government. We know what actually happened and what actions have been implemented by the government to overcome all the crises and uncertainties of the global economy at that time.

“I am requesting the Finance Ministry to hold an engagement session with all parties as soon as possible, whether in the government or the opposition, to restore our economy. Our togetherness is the core of the success of recovery,” said Shahar during the debate on the Supply Bill 2024. 

He highlighted four main issues, namely the most accurate way to issue debt, the appropriate time for debt issuance, the cost incurred in accordance with the rate of economic growth in the future, and whether debt issuance will have a positive or negative impact on the percentage of gross domestic product.

“Our country is evaluated on how we fulfil our debt obligations in an accurate and cost-effective manner to reduce the risk of financial crisis,” said Shahar.

The Finance Ministry was also asked to improve the value of the international investment position (IIP) to improve the perception of foreign investors towards the country.

Shahar said to increase the IIP, Malaysia must have holdings of financial assets abroad as opposed to foreign investors who own the country’s financial assets.

“The government should explain how to increase the rate of investment because if we increase the IIP by one per cent, the value of the ringgit would increase by 0.08%,” he said.

Shahar said the creditworthiness of a country conducted by credit rating agencies such as Moody’s, Fitch, and S&P Global Ratings is important because it reflects the country’s reputation as a sustainable and quality investment destination.

He said the impact of downgrading ratings and projections on the country’s economy and finances included capital outflows due to weak investor sentiment.

“The question is how are we going to overcome it? When will the Fiscal Responsibility Act be enforced and when will the government present the Procurement Act in the Dewan Rakyat to ensure that governance compliance can be improved?” he asked. – Bernama, October 23, 2023.