Greek Debacle or Najib And Ahmad Husni Debacle

Malaysia Chronicle

On the 3rd of November, an interview with Malaysia’s Finance Minister II, Ahmad Husni, which could only be described as baffling, appeared in the Star.

Malaysia, he declared, had enough funds to cushion the economy, should the European debt crisis hit the country. It was a strange statement considering that the European debt crisis, by which we suppose he means the Greek debt crisis, will without doubt hit Malaysia and the world in short order.

Ahmad Husni then went on to describe his sources of funds like a housewife pulling out cash from sugar containers and kitchen drawers. RM4 billion from the contingency fund, RM6 billion from Kumpulan Wang Amanah Nasional, 30 billion from trust funds and oh, we can sell off our landbanks. And after that, what will he sell? He has neither strategy nor plan, other than selling off all the nation’s assets.

Where Malaysia needs a brilliant economist, we are foisted with a 2nd rate accountant in Ahmad Husni. That is not the kind of person we need running Malaysia’s Finance Ministry in this terrifyingly testing time for the global economy. Of course, we have Prime Minister Najib Razak as the Finance Minister I, but what could Najib possibly know about the economy?

Mirror image of Greece

The Greek debt crisis continues to spiral out of control. For those who are unsure what it is all about; Greece has borrowed more money than it can repay, very much like what the BN is doing in Malaysia today.

Greece therefore is forced to request a write-down of its debts in return for which it must implement strict austerity measures. The problem is that the Greek people are uninterested in accepting any further austerity measures. They do not wish to suffer for what they see as problems caused by irresponsible and incompetent politicians.

The situation appears insoluble. Add to it the fact that Germany and France are making what can only be described as luke-warm efforts to solve the problem, and we have a very real crisis on our hands.

The EU wants private-sector lenders to write off 50% of what Greece owes them. The result of this is that private sector lenders are going to be very reluctant to lend money to Spain and Italy, countries which are still solvent, but labor under a high debt burden. This would inevitably result in a default by Spain and Italy. Which is how the sovereign debt crisis will spread.

Say goodbye to your money in the Banks and EPF

So why should Malaysians care? Because we are an export driven nation and when demand goes down for our goods and services, we will be affected. It may cause us to go into a recession.

Some analysts appear to think that Malaysia is protected because most of the debt (96%) is domestic. But this only means that if the government defaults, the banks will go under. Where your money is. And the EPF will be unable to collect all the dubious loans that it has been making on the instructions of BN Ministers. And the EPF is where the rest of your money is.

The MOF is also guilty of awarding projects without a tender even for products which have multiple vendors capable of supplying it. Recently, a RM20 million project was awarded to Century, a company with a reputedly close relationship to Ahmad Husni. We do not know many other projects have been awarded in this manner.

The EPF has also been investing in all kinds of dubious projects on the instructions of the MOF. Ahmad Husni therefore cannot claim that he is being a careful custodian of the nation’s funds. It is precisely this kind of profligate spending that got the Greeks into their mess.

Ahmad Husni would be better occupied in planning a holistic strategy on how Malaysia can continue to grow in the face of a global crisis. Instead he seems to be spending his time spinning politically motivated fairy tales that everything will be all right, so that the BN can win the next election.

Everything will not be all right, certainly not if Ahmad Husni is in charge.

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