Thursday, September 11, 2014

1MDB is national debt, not surplus, says Dr M

PETALING JAYA: Former prime minister Mahathir Mohamad has disputed Salleh Said Keruak’s recent statement describing 1MDB as an education fund.

In true Mahathir fashion, he quipped he wasn’t at all aware of any use of the funds from 1MDB for education.
“There are advertisements that claim over one million of the rakyat have been helped using funds from 1MDB. If you divide one million over four years, that’s 250,000 people a year. If it’s true, Alhamdulillah.

“From what I know, funds from 1MDB were used to procure three power plants from YTL, Ananda Krishnan and the proprietor of Jimah power plant in Negeri Sembilan. The acquisition was more expensive than the market price. At least four billion ringgit in total cost,” he said in his blog.
Mahathir went on to explain that 1MDB also owned major stakes in Tenaga Nasional’s future power plant construction plans with other companies, saying that in itself that led to a few raised eyebrows as there was no open tender for the project.
Mahathir also claimed that funds from 1MDB were used to develop the Tun Razak Financial Exchange Project and billion dollar transactions were carried out via an island in the Caribbean.
“My friend (referring to Salleh Keruak) surely knows that 1MDB is merely a pretend sovereign wealth fund,” said Mahathir.
“Many oil producing nations set up sovereign wealth funds, which are surplus funds they generate from selling hundreds of millions of barrels of crude oil a year.
“Malaysia only produces 650,000 barrels of oil a day and there isn’t much surplus from oil sales by Petronas.
“Most of the income goes to the government and the rest is invested. Government revenue from this isn’t much.
“So the 1MDB funds are not surplus but national debts. Ever increasing national debts, which have to be paid, eventually.
“If not, we will default, much like Argentina,” he said.
Mahathir also explained that there is a budget every year, where national expenditure and revenues are balanced, proposed management of funds are reviewed and approval for increasing the debt ceiling is sought from Parliament.
“I did not pay much attention, but don’t know of any earmarks in the budget for purchasing power plants or development of other projects.
“We don’t have to procure debts for education. We have always earmarked close to 25% of our national budget for education. We never borrowed money for education.
“There are some confusing reports regarding the funding of 1MDB and I hope my friend SSK (Salleh Keruak) can give more details and documents about the use of 1MDB funds for all purposes, including education,” he added.

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