At end 2007, the Federal government debts was RM266 billion. By the end of 2012, the Federal government debt has increased by 89% to RM 502.4 billion. This works out to RM18,000 each to the 28 million Malaysians. The 89% increase in the Federal government’s debts contrasts unfavorably with the reduction of the Penang state government’s debts by 95%.
The Federal government debt would be higher still if we include contingent liabilities, or loans guaranteed by the Federal government to third parties, including the private sector. The clearest example involves the comfort or guarantee letters issued by the Transport Minister relating to RM13 billion Port Klang Free Trade Zone scandal.
The minister of finance stated that the amount of contingent liabilities in 2011 totalled RM117 billion. In other words, if contingent liabilites are included, Malaysia’s debts would easily exceed RM620 billion.