The Auditor-General's report for 2009 was critical lashing. The country deficit as of last year was at RM363 billion, which is 53% GDP. I recalled that the Central Bank's estimate amount of national financial reserves (gold, USD, international currency reserves) as of June 2010 was at close to RM 400 billion. This means that if we decide to settle all debts for 2009, we can scarcely have about RM 30 billion of reserves, which we could go bust earlier than expected, as what Idris Jala said sometime back (he said bust by 2019).
The projected debts for 2010 is estimated to be at around RM 410 billion. As of 30 September, the amount of reserves recorded by BNM was at RM 310 billion, largely due to the strengthening of the Ringgit against the dollar (when converted to the present rate). If the amount is used to pay up, this means we are already in the red zone of -RM100 billion, twice the amount owed if the present amount of reserves are used vs 2009's deficit. Based on the current deficit, each of the 28 million citizens (even a child and old citizens) will have to pay RM 14000 to balance the country's account books.
The two things that the Auditor-General was critical about:
1. How a chunk of the stimulus money was spent on things that are not justified as of the original purpose.
2. Delays and red tapes in projects resulted in cost overruns
I don't really know department heads or civil heads are entrusted the stimulus money but instead used it to buy lavishly. I am still scratching my head wondering why a department would pay RM 224 for a tool kit whereas you can get one outside for a quarter of a price. Is it possible that the additional money (outside actual cost and set amount of profit) is a kickback and patronage money to those who demand a share but has no active involvement in it?
Secondly, there's some unrealistic planning there, as highlighted in the 8 abandoned projects in Perak (as an example). Now this is the downside of direct negotiations because, you may never know that the contractor (if you take the direct negotiation approach) could be slack in approach. One thing good about the open tender as what the opposition has been screaming about is that on the psychological side, it encourages vendors to compete with one another (demands strong physical, methodology, work ethics, and etc..) as to see who comes the best of the lot. The spirit of competition, as like in sports is already there in the working world.
Haven't we learned things from what ex-economic hitman John Perkin's said of those having mega projects is actually a way to con a country of monies and making it bankrupt? Didn't I mention that the slew of projects under the ETP is a dangerous double-edge sword, like a house of cards? If the projects get abandoned halfway, given the fact that the total amount required of ETP is RM 1.4 trillion, then do we realize that Malaysia could go bust here?
The American credit crisis is all for us to see and it is fortunate that we get caught in the later stages (consider it as sneeze that spreads to other people later). The old idea of spending more might not work anymore (the Keynes approach). At this time of uncertainty, why would banks keep promoting their products when people are having trouble with money? It clearly shows that they already have a lot of money in hand and they want to wave to people about taking up loans that they are willing? This is right now living in the world of red margin. I thought for a moment..since big banks have a lot of money to give away (a.k.a loans), why not give an amount to the government to finance the ETP? After all, top banks (non-GLC related) are being among the 62 percent (private sector) to finance the program, right?
At this time, we noticed that the government is not handling the finances well. Too much corruption has slipped from its fingers. And as according to Malaysiakini, corruption has screwed the targets related t o this under the GTP program. But BN says, only they can run the country given of the past record. But look at what is happening around us, and you still expect them to carry on? Come on, get real. Use your common sense when the situation, not when the party demands it!
We should be forewarned that Malaysia's bankruptcy is happening sooner than the projected 2019 because nothing can go according to the estimations.