I was alerted to this yesterday by a reporter. Sometimes I wonder…do our politicians do any fact checking at all, or do they just pluck figures out of the air?
Our esteemed Deputy Minister of Finance needs some help (excerpt):
KUALA LUMPUR: The government will have to continue spending on development while at the same time keeping national debt at a manageable level, says Deputy Finance Minister Datuk Donald Lim Siang Chai…
…As at December 2011, the ratio of national debt to the gross domestic product (GDP) reached 51.8%.
"Of course the debt figure is quite high but we have to spend money on infrastructure, healthcare and so on.
"We want to cut down the figure, which in most developed nations is 100% while in the United States it is 200%," he told reporters after delivering a keynote address at the "Forum on Private Retirement Scheme in Malaysia." …
…Lim said the government would work hard not to exceed the debt ceiling of 55% of the country's GDP which was increased from 45% in July 2009…
…Lim also said the country's dependence on the oil and gas (O&G) sector would eventually be lower going forward as the government had beefed up efforts to broaden its revenue base.
Lim said currently, the O&G sector supplies about 35% of government revenue, followed by the commodity sector (palm oil and rubber), manufacturing, retail market and tourism.
"The dependence level in the 1990s was as high as 50% and we have come down now with the expected increase in contribution from the services sector given the efforts put in place to boost the industry," he explained. - Bernama
First, a terminology issue – “national debt” in the MoF lexicon refers to total external debt (both public and private), not to government debt. It would be pretty ironic to have a Deputy Finance Minister using different technical terms from his staff. To be fair, this could have been inserted by the journalist writing the article.
Second, there aren’t actually all that many countries with debt to GDP ratios exceeding 100%, much less “most developed countries”. The April 2012 IMF World Economic Outlook database lists just 12 such countries. The current actual figure for the US is just above 100% and nowhere near 200%.
Third, the current contribution of Oil & Gas to government revenues is correct, but that historical figure is ridiculously inflated (ratio to total government revenue):
The average for the 1990s looks to be a little above 20%, not 50%. He could have been talking about all those sectors (O&G, commodities, manufacturing etc) collectively, but taken in the context of the previous remarks, the quote will be taken – as it seems to have been picked up upon by the rest of the media – as referring specifically to oil & gas. And that’s simply not the case.