The opposition always claim that Malaysia will go bankrupt.
This is not possible as our economic fundamentals are solid.
Let us take a look at why Malaysia is not going to be bankrupt.
Our economic fundamentals are still strong
Malaysia is unlikely to go bankrupt as its economic fundamentals are still strong.
Its gross domestic product growth (GDP) has always been firm registering growth for the past several years.
In the recent second quarter, Malaysia defied all odds to register a GDP growth of 5.8 percent.
The World Bank has also revised our 2017 GDP upwards to climb at 5.1 percent from 4.5 percent.
This is above expectations and shows that our economy is resilient and strong and the country is not going to be bankrupt.
Malaysia is not like Greece, our economy is not in recession
Malaysia is unlikely to go bankrupt as the economy is still growing and is not in a recession.
Every four months, Bank Negara Malaysia reports that the gross domestic product continues to grow at between four and five percent.
Malaysia’s GDP is not in the negative such as Greece which went bankrupt.
The Greek banks collapsed and its people did not spend as they had no money.
Greece debts also totalled billions of dollars and unemployment rate went up to 70 percent.
That is not the case in Malaysia.
So it is unlikely that Malaysia will go bankrupt.
Cash reserves high
Malaysia’s international cash reserves as at July 2017 is still high at RM429.76 billion.
The reserves are expected to climb even higher due to good exports at the moment.
“Our current international reserves stand at more than RM400 billion, so how can we go bankrupt? Our financial rating stands at A-, and there are not many countries that share that rating,” Prime Minister Datuk Seri Najib Razak said in the New Straits Times on August 25.
Datuk Seri Najib said in 1997, Malaysia suffered losses when its cash reserves went down by half ot RM60 billion but Malaysia still did not go bankrupt.
“Malaysia continued to be out of any possibility of bankruptcy,” said Najib.
Oil prices still okay
Malaysia will not go bankrupt because oil prices are still holding steady at between US$45 and US$50 per barrel.
At that price level, Malaysia can still earn an income from selling oil.
Second Finance Minister Datuk Seri Johari Ghani said Malaysia would be in trouble if oil prices went down below US$30 per barrel.
So as long as oil prices are still steady at above US$30 per barrel, Malaysia is unlikely to go bankrupt.
Employment rate still high
Malaysia is unlikely to go bankrupt as a majority of the rakyat still have jobs.
Our unemployment rate is still low at below 5 percent and is not worrying.
Malaysia’s unemployment rate is still lower compared to other countries.
Malaysia should be worried when there are a lot of the rakyat who are not working.
This is because when the rakyat does not work, the economy might collapse.
When the economy collapses, only then will the country go bankrupt.
But as of now, a huge majority of the people still have jobs.
And due to this, the Malaysian economy is not expected to go bankrupt.
The rakyat still spending
Malaysia will not go bankrupt as domestic consumption is still high.
Domestic consumption is the spending activities by the rakyat in the country.
The rakyat at the moment are still spending going to shopping malls, go for holidays and eat at restaurants.
All these activities will contribute towards supporting the economy.
Malaysia will only go bankrupt if the rakyat stops spending.
And as of now, the rakyat is still spending to help support the economy.
Local and foreign investments still coming in
Malaysia cannot be a bankrupt country because local and international investors continue to invest to expand operations.
Local companies such as furniture, food and beverage and automotive firms continue to open new branches.
International companies such as IKEA recently announced that it will invest RM1 billion to open a new distribution center in Pulau Indah.
Bernama reported in June that Malaysia’s foreign direct investments into the country this year is expected to surplass RM41 billion last year.
Malaysia’s rating is still high
Datuk Seri Najib said on August 25 that it is not possible for Malaysia to go bankrupt.
This is because ratings firm Standard & Poor’s has given Malaysia the A- rating which is a very strong rating and not many countries share that same rating.
The Star reported on August 18 that Fitch Ratings has also raised Malaysia’s GDP economic outlook and expects debt to stabilise.
So all these are positive factors for the economy.
Malaysia’s financial management better than other countries
Datuk Seri Najib said on August 17 that Malaysia was better off in its financial stature and management than many other countries.
This is true as the country has managed to defy the odds by registering growth at a time when the global economy is uncertain.
Thanks to Datuk Seri Najib’s leadership, Malaysia is strong and is unlikely to go bankrupt.
Saying Malaysia is bankrupt is just a ploy by the opposition
Datuk Seri Najib said last month that the opposition was creating a perception that the country can go bankrupt to erode the people’s confidence towards the government and the ruling party Barisan Nasional.
It is also a psychological warfare tactic of ‘If you cannot convince them, confuse them.”
The rakyat must be careful not to be duped with the opposition.
This is because, their claims that the country will go bankrupt has no basis.
Their claim that the country will go bankrupt is also not backed up with facts.
So the rakyat must always be alert not to believe with the claim by the opposition as Malaysia is strong and solid.