National debts: more puzzling numbers tumblin'

Recently there is a claim in this video, MalaysiaYouth4Change that according to a report on 13th Jan 2011 by Thompson Reuters Eikon, the bonds sold by Malaysia national debt is USD179 billion which' at optimistic exchange rate of RM3 to USD1, is a whopping RM537 billion, very much higher than RM271 billion as at June 2010 as reported the finance ministry.

I have no idea how TRE derived the number and baffled by the huge gap between this number and the finance ministry figures, on which the Prime Minister had cheerfully advised Malaysians that national debts have decreased.

Then some curious person sent me the breakdown of TRE numbers hoping I could clarify the situation. I am amused by this because I am certainly not part of the federal finance ministry administration but I can just take a cursory look at the data and hope to point out a thing or 2.

Picture 1 shows the finance ministry number as at 30 June 2010




Picture 2 shows the Thompson Reuters Eikon numbers, very much higher




Picture 3 shows some more detailed information




Luckily there is an excel file which makes analysing easier

Base on a cursory review of the 2 sets of data, the discrepancies could be explained by

1) Finance Ministry only included bonds issued to Malaysia where as TRE included bonds issued to proxies such as Petronas, Khazanah, MISC etc

2) that still leaves a sizable difference between the TRE and finance ministry numbers - it could be different exchange rates applied and also classification differences between these 2. Statistic collection can be a dodgy business.

In any case, the Malaysian government should seek to clarify this with TRE urgently because its figure is giving a different impression from what the finance ministry is giving, hence confusing the business communities, foreign and local, as well as all tax payers.

Not to mention it cast doubt on the integrity and competence of the present administration.

The last time when a leading Malaysian official dismissed an analyst's report, the rebuttal from the foreign investor community harmed all Malaysians. (Remember the DPM and PERC issue?)

The graph below summarise the differences between the 2 sets of numbers.


The bonds carry some abstract description that looks like the name of borrower. I just did a "match, guess and hope for the best" and made a best guess hear: looks like about RM36 billion under Khazanah, RM48 billion under Petronas, RM5 billion under MISC, RM6 billion under KLIA.....

Note the huge jump in bonds issued since June 2010?

I blogged about this last year


"According to Singapore's Today, Dow Jones reported that 21 more government bonds auctions (really it means rakyat debts committed by temporary administrators on their behalf without getting rakyat's consent), 1/3 more than this year, to raise money to spend on 131 "key projects" (which should include the much objected Menara Warisan Merdeka).

Malaysians are expected to owe another RM90 billion from debts raised in 2011 alone; the years and years of accumulated debts as at 2008 alone was already RM213 billion.

In 2011, Najib's administration will almost double our debts and subject us to more foreign exchange risks. The loans are for infrastructure and property projects - not a whimper about healthcare, human capital development, education .... the soft skills so vital nowadays and Malaysians so lack of it nowadays."

Also, the finance ministry must clarify their methodology of reporting national debt figures to the general public. At the moment, it seems to me that whenever "national debts" is discussed, it only involves bonds issued to Malaysian government, and it excludes Hutang Dalam Negeri Kerajaan Persekutuan (the bulk of it includes KWSP & all those sijils in your hands bought by your savings) and the burden carried "special purpose vehicles" which some accounts are not for public scrutiny, like Khazanah and Petronas.

Otherwise it looks like Off Balance Sheet finance/debts carried at somewhere else to me, a term that makes ex-Enron pension holders cringe with despair.