'Fitch ratings a wake-up call to cut defence splurge'

The government has to heed the Fitch Ratings’ negative outlook for Malaysia as a "wake-up call" and cut back billions of ringgit in unnecessary defence spending, said Gerakan.

In a press statement, party secretary-general Mah Siew Keong urged for budgetary prudence with an emphasis on downsizing government spending.

He said policymakers may have underestimated the gravity of letting Malaysia's debt position bloat under a loose fiscal policy.

“It is clear that unnecessary spending such as the proposed purchase of more submarines and combat aircrafts replacement programme involving billions of ringgit are relatively less important compared to the urgency to address the budget deficit and weaknesses in public finances,” said Mah, who is also the chairman of Gerakan Economic Bureau.

Fitch Ratings revised Malaysia's outlook from “stable” to “negative”, citing lack of progress in government reforms in addressing the budget deficit. 

It also raised concerns over growing government debt, which stood at 53.3 percent at the end of 2012, not including contingent liabilities.

In response, Prime Minister Najib Abdul Razak had said that his government will put in place measures toaddress the concerns but has yet to disclose any specific action.

It was reported in March that Malaysia was shopping for 18 aircrafts by 2015 to replace its ageing fleet of Russian-made MIG-29s fleet. 

Ahmad Zahid Hamidi, who was then the defence minister, was quoted as saying that 24 deals involving defence assets and services worth RM4.2 billion have been signed, just before Parliament was dissolved for the 13th general election.