RAFIZI CATCHES NAJIB: Don't try to 'trivialize' asset sale, it's a DESPERATE SIGN

UPDATE 2 KUALA LUMPUR - MP for Pandan Rafizi Ramli slammed Prime Minister Najib for trying to "trivialize" RM5.6 billion of asset sales and mortgages that the World Bank had pointed out in its recent report on Malaysia.

"When you see the government resort to asset disposal, it is a sign of desperation," Rafizi, who is also the strategic director of Opposition Leader Anwar Ibrahim's PKR party, told reporters on Thursday.

"The subtle message of the World Bank report is that Malaysia is running out of options to secure our treasury position."

Indeed, the move by the Najib administration is unprecedented as there was no mention of any asset disposal or securitization of mortgages in the Budget 2013.

This has prompted talk in the market that the sales were an unplanned, hasty and 'no-other-recourse-left' decision.

Raising cash to meet budget deficit targets

Rafizi had last week shocked the country when he accused Najib of selling national assets to meet budget deficit targets.

According to the Opposition politician, who has gained a reputation for his thorough audit and stunning revelations on high-level government corruption, the Najib administration had made RM1.4 billion from “asset sales” and RM4.2 billion from “securitisation of government mortgages”.

"The Malaysian Government is running out of financial and fiscal space as well as policy and monetary options to ensure the Treasury's healthy position," said Rafizi.

"From the proposed price hikes to the introduction of the goods and services tax, and now this. All these are distress signals from Putrajaya."

Ripe for a sub-prime crisis ala US in 2007

He warned Malaysia may fall into a similar financial crisis that plagued the US in 2007 if the Najib administration continued with unplanned sale of housing loans undertaken by its massive civil force.

“If we allow the federal government to continue to do this unchecked, it’s a recipe for disaster, as what happened in the US,” said Rafizi.

“Disposable income is decreasing because of the price hikes. The probability that people will default on their monthly payments is higher."

Worsening deficit

Najib, who is also the Finance Minister, has not commented on the matter. However, the Finance Ministry has accused Rafizi of trying to play up the issue.

"The move is to stimulate more involvement from government agencies, government-linked-companies (GLCs) and the private sector to accelerate the country's economic growth," the Finance Ministry said in its statement

“Revenue from the securitization of government mortgages are not the Federal Government’s main source of revenue since it only accounts for 1.9% of the total revenue recorded."

“Land sale is a part of the government’s initiative to monetise assets to develop a particular piece of land and its surrounding areas. Such monetisation of assets have been done since 2008."

"The assets are sold at market price with valuation done by the Valuation and Property Services Department."

The ministry also said that it was committed to reducing the country’s fiscal deficit to 3% by 2015 through fiscal consolidation and not relying upon asset sales and securitisation of government mortgages.

In the end, the people have to pay higher prices for Najib's incompetence

Nonetheless, the government's response has failed to placate investors as well as many Malaysians, who worried by the country's financial down-spiral.

Rafizi told reporters his PKR party would push for an urgent sitting in Parliament to discuss the government's mismanagement of the economy and the country's finances.

Not only has the government's "incompetence" led to the asset sale, he said, but also to the recently announced slate of unpopular price hikes and subsidy withdrawals. - Malaysia Chronicle