<p>From a quick glance, it looks like the difference is that the new finance minister is including promised payments that the government had previously made, but hasn't had to pay yet. For example, say I borrow \$10 from you. At the same time, say I had previously promised (in an unrelated interaction) to give you \$5 at the start of June. What's my current debt to you? Officially, it's \$10 (from the loan you had given me). But come the first of June, if I haven't paid you back yet, I'll find myself in debt to you for \$15: \$10 from the loan, and the additional \$5 from the promise. Effectively, the new finance minister is counting the debt to be the entire \$15 (that is, current debt obligations, as well as promised future payments to different projects in Malaysia), while the official figure only considers my debt to be \$10 (since I don't yet technically owe you the additional \$5).</p>

<p>Technically, the government official figures are correct, since the government can "get out" of the future payments by (I'd assume) changing the law to remove themselves from that responsibility. At the same time, since (it looks like) those payments are to Malaysian government/private company partnership projects, simply refusing to pay would ultimately undermine Malaysian projects, which would hurt citizens. Which is more important depends on the context, and the interests of the individual.</p>

CC BY-SA 4.0
2018-05-26T02:28:46.853Z
2018-05-26T02:28:46.853Z
AndrewC
<p>Malaysia recently changed governments. The new finance minister claimed the national debt is actually <a href="https://www.thestar.com.my/business/business-news/2018/05/24/debt-to-gdp-ratio-above-80pct-says-lim/" rel="nofollow noreferrer">RM1.087 trillion</a>, and that the previous government had understated the national debt by some RM400 billion:</p>

<ul>
<li>The official Federal Government debt is RM686.8bil</li>
<li>"In addition, the Government is already committed to pay for government guarantees for various entities which are unable to service their debts. This amounts to RM199.1bil."</li>
<li>"...the Government also must make lease payments for "Public-Private Partnership" (PPP) projects such as construction of schools, roads, hospitals and police stations, which amount to RM201.4bil."</li>
</ul>

<p>The former finance minister promptly responded by claiming that the new minister is overinflating figures, and that <a href="https://www.thestar.com.my/news/nation/2018/05/25/najib-to-pakatan-congrats-on-spooking-the-market-with-rm1tril-figure/" rel="nofollow noreferrer">the original RM686.8 billion was according to "universally accepted" defined by the IMF and World Bank</a>.</p>

<p>I don't understand what they're saying very well. Two questions:</p>

<ol>
<li>What are the two extra terms mentioned by the new minister?</li>
<li>Is Malaysia's national debt RM1 trillion or RM686 billion?</li>
</ol>

<government-debt>
Malaysia's national debt - who's correct?
Allure
# Malaysia's national debt - who's correct?

(Asked by: username_0 on 2018-05-26)

Malaysia recently changed governments. The new finance minister claimed the national debt is actually [RM1.087 trillion](https://www.thestar.com.my/business/business-news/2018/05/24/debt-to-gdp-ratio-above-80pct-says-lim/), and that the previous government had understated the national debt by some RM400 billion:

* The official Federal Government debt is RM686.8bil
* "In addition, the Government is already committed to pay for government guarantees for various entities which are unable to service their debts. This amounts to RM199.1bil."
* "...the Government also must make lease payments for "Public-Private Partnership" (PPP) projects such as construction of schools, roads, hospitals and police stations, which amount to RM201.4bil."

The former finance minister promptly responded by claiming that the new minister is overinflating figures, and that [the original RM686.8 billion was according to "universally accepted" defined by the IMF and World Bank](https://www.thestar.com.my/news/nation/2018/05/25/najib-to-pakatan-congrats-on-spooking-the-market-with-rm1tril-figure/).

I don't understand what they're saying very well. Two questions:

1. What are the two extra terms mentioned by the new minister?
2. Is Malaysia's national debt RM1 trillion or RM686 billion?

**Tags:** government-debt

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## 1 answers

### Answer by username_1 on 2018-05-26. Score: 2 | Accepted answer

From a quick glance, it looks like the difference is that the new finance minister is including promised payments that the government had previously made, but hasn't had to pay yet. For example, say I borrow \$10 from you. At the same time, say I had previously promised (in an unrelated interaction) to give you \$5 at the start of June. What's my current debt to you? Officially, it's \$10 (from the loan you had given me). But come the first of June, if I haven't paid you back yet, I'll find myself in debt to you for \$15: \$10 from the loan, and the additional \$5 from the promise. Effectively, the new finance minister is counting the debt to be the entire \$15 (that is, current debt obligations, as well as promised future payments to different projects in Malaysia), while the official figure only considers my debt to be \$10 (since I don't yet technically owe you the additional \$5).

Technically, the government official figures are correct, since the government can "get out" of the future payments by (I'd assume) changing the law to remove themselves from that responsibility. At the same time, since (it looks like) those payments are to Malaysian government/private company partnership projects, simply refusing to pay would ultimately undermine Malaysian projects, which would hurt citizens. Which is more important depends on the context, and the interests of the individual.


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