Tuesday, May 03, 2016
1MDB: The Mother of All Losses?!
P Gunasegaram contributed a damning article regarding 1MDB to Malaysiakini today. The article entitled "Game over for 1MDB & Najib?" gave an estimate of the losses suffered 1MDB: An incredible amount of RM44 billion!! That's double the amount that I thought we had lost in this horrendous affair.
To get a true sense of the magnitude of the loss, lets' take a look at the issue of PTPTN student loans. This was an issue that made me very unhappy with Anwar Ibrahim in 2012 when he proposed that the government should absorb the entire PTPTN loans outstanding. The total amount outstanding then was RM44 billion, owing by 1.99 million students. That's exactly the amount of money that P. Gunasegaram estimated that 1MDB had lost!!
Imagine the benefit that could have accrued to the nation, had we not lost this money. We could have used the money to pay off the PTPTN loans owing by 1.99 million young Malaysians. Freed from the burden of repaying their student loans, these young Malaysians would have a better start in life; they could consume more or invest in their first homes. If you were like me - who object to this type of social experimentation - we can still put this saving to good use, such as setting PTPTN2. Imagine another 1.99 million students obtaining their study loan to finance their undergraduate degree which will prepare them for the challenges of the 21st century. Either way, our economy would have enjoyed a massive boost. Alas, that was not to be! Instead we lost it all. But, that's not all! The loss is continuing due to lower growth as a result of poor investors' sentiment and a higher cost of living due to our weaker ringgit.
If this nation is to move on, the people responsible for this debacle must be brought to justice. I have faith that there are still enough good men in our cherished institutions who will come together to bring this sorry episode to an end.