Bookmark this for our next generation, just in case Malaysia go Bankrupt: Mahathir squandered RM100 bil, says new book
June 15, 2011 | 42 Comments
Malaysia has squandered an estimated RM100 billion on financial scandals under the 22-year rule of Dr Mahathir Mohamad, according to a new book about the former prime minister.
According to Barry Wain, author of the soon-to-be launched ‘Malaysian Maverick: Mahathir Mohamad in Turbulent Times’, direct financial losses amounted to about RM50 billion.
This doubled once the invisible costs, such as unrecorded write-offs, were taken into account. The RM100 billion total loss was equivalent to US$40 billion at then prevailing exchange rates.
Barry, who is a former editor of the Asian Wall Street Journal, says most of the scams, which included a government attempt to manipulate the international tin price and gambling by Bank Negara on global currency markets, occurred in the 1980s.
‘Malaysian Maverick’ is the first independent, full-length study of Mahathir, who retired in 2003 after more than two decades as premier. The book will be published globally next week by Palgrave Macmillan.
Wain writes that the Mahathir administration, which took office in 1981 with the slogan, “clean, efficient, trustworthy”, was almost immediately embroiled in financial scandals that “exploded with startling regularity”.
By the early 1990s, he says, cynics remarked that it had been “a good decade for bad behaviour, or a bad decade for good behaviour”.
Secret military deal with US
The book also reveals that:
Mahathir, despite his nationalistic rants, signed a secret security agreement with the United States in 1984 that gave the Americans access to a jungle warfare training school in Johor and allowed them to set up a small-ship repair facility at Lumut and a plant in Kuala Lumpur to repair C-130 Hercules transport aircraft.
Mahathir used a secret fund of his ruling Umno to turn the party into a vast conglomerate with investments that spanned almost the entire economy.
Mahathir’s Umno financed its new Putra World Trade Centre headquarters in Kuala Lumpur partly with taxpayers money, by forcing state-owned banks to write off at least RM140 million in interest on Umno loans.
Wain, who is now a writer-in-residence at the Institute of Southeast Asian Studies in Singapore, however credits Mahathir with engineering the country’s economic transformation, deepening industrialisation and expanding Malaysia’s middle class.
But Mahathir had undermined state institutions, permitted the spread of corruption and failed to provide for Malaysia’s future leadership, he says.
Do you know that:
Last year, Petronas gained a total pre-tax profit of RM86.8 billion and so far, it has earned about RM600 billion. As the surge of international oil prices, it’s profits will as well substantially grow. But the government has reduced fuel subsidies by a wide margin, turning Malaysia into one of the world’s most expensive oil price oil-producing countries. It makes the people wonder where the huge profit of Petronas has gone?
Former Work Minister Datuk Seri S. Samy Vellu said in the Parliament last year that the government has compensated a total of RM38.5 billion to 20 highway companies. Also, as the government has stopped building the Scenic Bridge in Johor, it has to compensate RM300 million construction cost to the bridge contractor. Isn’t the spending of such huge amount a waste?
Former Deputy Prime Minister Datuk Seri Anwar Ibrahim revealed that the Central Bank has lost RM30 billion in foreign exchange trading in the 1990s. Who was the manipulator behind it? (Second Finance Minister was in charge of Bank Negara’s Forex trading at that time)
Malaysia Airlines was said to have suffered losses every year. But why to spend RM1.55 million to buy three paintings to decorate its chairman’s office? And why to spend RM7,525 per day to recruit a foreign senior general manager?
Proton Holdings bought a 57.75% stake in MV Agusta for €70 million but sold it at €1 (RM4.50) a year later, causing Proton to lose €75.99 million (RM 348 million)?
Other excesses and wastages:
1. The Bank Bumiputra twin scandals in the early 1980s saw US$1 billion (RM3.2 billion in 2008 ringgit)
2. The Maminco attempt to corner the world tin market in the 1980s is believed to have cost some US$500 million. (RM1.6 billion)
3. Betting in foreign exchange futures cost Bank Negara Malaysia RM30 billion in the 1990s.
4. Perwaja Steel resulted in losses of US$800 million (RM2.56 billion). Eric Chia, was charged with corruption for allegedly steering US$20 million (RM64 million) to a Hong Kong-based company
5. Use of RM10 billion public funds in the Valuecap Sdn. Bhd. operation to shore up the stock market
6. Banking scandal of RM700 million losses in Bank Islam
7. The sale of M.V. Agusta by Proton for one Euro making a loss of €75.99 million (RM 348 million)
8. Wang Ehsan from oil royalty on Terengganu RM7.4 billion from 2004 – 2007
9. For the past 10 years since Philharmonic Orchestra was established, this orchestra has swallowed a total of RM500 million
10. In Advisors Fees, Mahathir was paid RM180,000, Shahrizat Abdul Jalil (women and social development affairs) RM404,726 and Abdul Hamid Othman (religious) RM549,675 per annum
11. The government has spent a total of RM3.2 billion in teaching Maths and Science in English over the past five years. Out of the amount, the government paid a whopping RM2.21 billion for the purchase of information and computer technology (ICT) equipments which it is unable to give a breakdown.
12. The commission paid for purchase of jets and submarines to two private companies Perimeker Sdn Bhd and IMT Defence Sdn Bhd amounted to RM910 million.
13. RM300 million to compensate Gerbang Perdana for the RM1.1 billion “Crooked Scenic Half-Bridge”
14. RM1.3 billion have been wasted building the white elephant Customs, Immigration and Quarantine (CIQ) facilities on cancellation of the Malaysia-Singapore scenic bridge
15. RM 100 million on renovation of Parliament building and leaks
16. National Astronaut Programme – RM 40 million
17. National Service Training Programme – yearly an estimate of RM 500 million
18. Eye on Malaysia – RM 30 million and another RM5.7 million of free ticket
19. RM 4.63 billion, ’soft-loan’ to PKFZ
20. RM 2.4 million on indelible ink
21. Samy announced in September 2006 that the government paid compensation amounting to RM 38.5 billion to the highway companies. RM 380 million windfalls for 9 toll concessionaires earned solely from the toll hike in 2008 alone.
22. RM32 million timber export kickbacks involving companies connected to Sarawak Chief Minister and his family.
23. Two bailouts of Malaysia Airline System RM7.9 billion
24. Putra transport system, which cost RM4.486 billion
25. STAR-LRT bailout costing RM3.256 billion
26. National Sewerage System costing RM192.54 million
27. Seremban-Port Dickson Highway costing RM142 million
28. Kuching Prison costing RM135 million
29. Kajian Makanan dan Gunaan Orang Islam costing RM8.3 million.
30. Le Tour de Langkawi costing RM 3.5 Million
31. Wholesale distribution of tens of millions of shares in Bursa Malaysia under guise of NEP to cronies, children and relatives of BN leaders and Ministers worth billions of ringgits.