Govt has RM40b untapped cash reserves, says Husni

By Chong Jin Hun, The Edge

KUALA LUMPUR : The government has some RM40 billion of untapped cash reserves which it could use to sustain Malaysia’s economic growth in the event of a global economic slowdown, according to Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah.

Husni said the reserves included the government’s trust fund of about RM30 billion, another contingency fund of some RM4 billion, and Kumpulan Wang Amanah Negara which have around RM5 billion.

“We have the reserves,” he told reporters on the sidelines of the MIA-AFA conference yesterday.

Husni said the government had asked the country’s accountant general to review the usage of its RM30 billion trust fund, of which a portion was “dormant”.

He also noted that Malaysia would achieve a 5% to 6% GDP growth this year.

Husni also said the government plans to sell more government-owned land to the private sector to raise more funds for the country’s development. The move is expected to add RM1.2 billion to the government’s projected revenue for 2012.

According to him, the real estate assets included small plots of land, which the government did not plan to utilise within the River of Life project enclave. These plots of land are about three to seven acres “We have identified the land and we plan to monetise the assets,” Husni said.

Husni (centre) shaking hands with MIA president Datuk Mohd Nasir Ahmad while AFA president Abdul Rahim Abdul Hamid looks on.
The River of Life project, an entry point project under the Greater Kuala Lumpur/Klang Valley National Key Economic Area, aims to transform the Klang and Gombak River into an iconic waterway by 2020.

According to the Economic Transformation Programme (ETP) website, the River of Life project involves river cleaning, beautification, and development. Beautification works will also be undertaken along a 10.7km stretch of the Klang and Gombak river corridor, hence, the anticipation that land value around the area would rise.

In March 2010, Prime Minister Datuk Seri Najib Razak had said several government-owned tracts along Jalan Stonor, Jalan Ampang and Jalan Lidcol in Kuala Lumpur had been identified to be tendered out for development by the private sector.

Najib had said it would be wasteful if these sites were not developed, and the government would have to bear the cost of maintaining these assets.

The government had also established a joint venture with the Employees Provident Fund to develop 3,000 acres within the Rubber Research Institute of Malaysia (RRIM) enclave in Sungai Buloh into a new hub for the Klang Valley.

Under the government’s latest budget, policymakers have earmarked RM232.8 billion for the coming year, of which RM181.6 billion has been allocated for operating expenditure while the balance RM51.2 billion is for development.

The government’s revenue is expected to increase 1.9% to RM186.9 billion in 2012 from RM183.4 billion in 2011. Based on the estimated revenue and expenditure, the government’s budget deficit in 2012 is anticipated to improve to 4.7% of gross domestic product (GDP) compared with 5.4% in 2011.

Malaysia’s GDP is forecast to grow between 5% and 5.5% in 2011, and expand further by between 5% and 6% in 2012, spurred by private consumption and investment.

The country’s private and public investments are expected to grow 15.9% and 7% respectively in 2012, helped by higher foreign direct investment, implementation of the ETP and Second Rolling Plan projects under the Tenth Malaysia Plan.

To further spur domestic growth, the government will implement a RM6 billion Special Stimulus Package via Private Financing Initiative in 2012. Under the scheme, several public projects will be undertaken including the upgrading and maintenance of schools, flood mitigation programmes, and construction of public houses such as housing for fishermen and low-income group.

According Husni, the RM6 billion package would be spent and serve as a buffer to ensure the country’s economic growth was sustainable.

He said policymakers would use the money to further spur the country’s economy even in the absence of a global recession.  However, in the event the broader landscape sees a protracted slowdown, the minister said the funds would help sustain the country’s economic strength, which hinged largely on domestic consumption and investment, besides public spending.
“We are concerned about growth and inflation,” Husni said.