Parti Keadilan Rakyat Vice President and Member of Parliament Gopeng Dr Lee Boon Chye expressed reservation on the projected GDP growth of 6% per annum for 10MP. The 10MP also failed to address the problem of ballooning Government debt due to poor discipline in controlling expenses as a result of increasing operating expenses and extensive leakages from corruption and abuses.
Dr Lee referred to the three previous 5-year plan, ie 7MP, 8MP and 9MP during which none of the growth targets was achieved. The 7MP, 8MP and 9MP set yearly GDP growth of 8%, 7.5% and 6% respectively but the actual growth were merely 4.7% during the 10 year period from 1996-2005 (7MP and 8MP) and 4.2% in 9MP.
The 10MP projected 6% GDP growth per annum was unrealistic as it depends largely on continuing growth in private consumption as well as private investment. Private investment especially will have to increase from 2% of GDP in 9MP to 12% of GDP (or RM 115 billion per annum) in 10MP, mainly from foreign direct investment. How are we going to increased the FDI by more than 6 folds in light of the competitive environment for FDI ? Furthermore the main sources of FDI are facing problems themselves. The US economy is still recuperating from the subprime loan crisis in 2008, the Eurozone hit by Greece bankruptcy and the Japanese economy still struggling with no end in sight after two decades of slow growth.
The past records also showed poor discipline in controlling expenses by the Federal Government. For instance the budget deficit which was projected during 8MP was RM28.9 billlion but the actual deficit was RM 97.8 billion. Again the targeted deficit for 9MP was RM 27.9 billion per year but the actual deficit was RM40.3 billion per year. It was not surprising that the Federal Government debt has ballooned from RM 228.6 billion in 2005 to 405.1 billion now, which is 52.5% of GDP and well above the targeted 351.3 billion. In fact significant amount (RM 98.7 billion) of the deficit was accumulated over the 2-year period (2009-2010) under the stewardship of Dato Seri Najib Tun Razak as Prime Minister and Finance Minister.
Dr Lee feels that unless there is strong political will to reduce operating expenses, curb leakages from corruption and abuse, and to instill discipline in public expenses, the Federal Government debt may be much higher than projected RM 593.9 billion (49.9% of GDP) by 2015. The debt situation could get worse if there is substantial reduction in revenue when GDP growth drops below projected 6%.