Malaysia will not become bankrupt, as frequently claimed by the opposition, as the country adopts prudent financial management practices, said Prime Minister Najib Abdul Razak.

He said Malaysia was on a very firm economic footing and was able to spearhead the country’s transformation, which will greatly benefit the people.

"If there are people who say the country is going bankrupt, that is a slanderous and baseless accusation. For example, the losses that were incurred in foreign exchange dealings in 1997, what were the losses...the Royal Commission of Inquiry proceedings (revealed) RM31 billion, some say it was RM33 billion.

“At the time, the international reserves stood at RM60 billion, half of our reserves were wiped out, not on paper but hard cash and we still did not go bankrupt,” he said when addressing the Johor Baru Umno delegates meeting today.

The Umno president also said Malaysia’s international reserves currently stood at RM400 billion, and this clearly indicated that country’s financials were stable.

Besides, the ‘A-’ and ‘A’ credit ratings accorded to the country also reflected that Malaysia’s international reserves were very well managed, said Najib.

In February, Fitch Ratings affirmed Malaysia’s long-term foreign- and local-currency issuer default ratings at ‘A-‘ and ‘A’, respectively, with stable outlooks.

The ratings were driven, among others, by the authorities’ commitment to a fiscal consolidation path, a stable ringgit, reserves and stronger economic growth.

Najib said the claims by the opposition that the country would go bankrupt was aimed at confusing the people, hence eliminating the confidence in Umno and Barisan Nasional.

"So, we cannot believe the claims (by the opposition) because they want to destroy the people’s confidence in us (government). Politics today is about perception, so long as there’s doubt about the government, that’s enough.

"We (Umno members) must explain the true narrative even though we have to repeat many times that Malaysia is on a strong economic foundation and we are able to drive the transformation for the wellbeing of the people," added Najib.

He said public transportation projects such as the Mass Rapid Transit in Kuala Lumpur and the Klang Valley which had been implemented by the government have been described as world class projects.

"This means the people’s confidence in us to deliver ‘world class projects’ cannot be denied by anyone," said the prime minister.

Besides that, the growth of 5.8 per cent in the second quarter of this year, increase in international reserves, as well as projection of a stronger currency, also showed that the country’s economy is on a strong foundation.

- Bernama