Is Malaysia's Coffer Out Of Money?

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Jan 21 2007
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Last Friday (Jan-19-2007) the Prime Minister of Malaysia Government, Abdullah Badawi, denied the country has to seek out a US$50bil (RM200bil) loan from overseas to finance the Ninth Malaysia Plan (9MP) stating the country has enough money to fund its national development projects. Abdullah also denied that the economy was experiencing a downturn.

Badawi was making the clarification when a blogger claimed that “Malaysia was borrowing US$50bil without borrowing“. The blog said that the US$50bil purportedly procured from 25 prime banks was being channeled through a private limited company which would act as a front for the Malaysian government so that the country was not seen as borrowing US$50bil from overseas.

It’s not difficult to find out from which blog this claim came from, thanks for the age of internet and Google’s (Nasdaq: GOOG, stock) search engine, of course. I believe the blog is none other than Malaysia Today and the article was written by the author can be found titled “How Malaysia is borrowing USD50 billion without borrowing“, unless there’re other blog’s article which I might have over-look during the online search.

Could this be true? That the Government of Malaysia is indeed ran out of money to finance the ambitious 5-year plan in order to spur the economy which obviously is slow if you happen to ask any small businessman on the street? Does the company mentioned, Asasatu Technology Sdn Bhd, which is in the process of being wound up together with its’ managing director Hj Zubir bin Hj Ahmad really connected to this USD50 billion funding arrangement? What about the other Australian company Project Equity Services Group (PESG)? What is more disturbing mentioned in the article was that the Bank Negara has agreed that a private limited company be used as a front for the Malaysian government to borrow USD50 billion.

If indeed the Government of Malaysia is involved and approved such an arrangement for funding, it will not only scare-off foreign investors but will affect the country’s credit rating as well as the Kuala Lumpur Stock Exchange (KLSE).

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