Critics should not focus solely on the nation's debt-to-gross-domestic-product (GDP) ratio in assessing the government's ability to manage debt.

According to Second Finance Minister Johari Abdul Ghani, other countries have far higher debt-to-GDP ratios and yet are doing fine.

"If you want to rely on such figures, the US would already be bankrupt as its debt-to-GDP ratio exceeded 100 percent. Look at Japan, it rated at 250 percent while Singapore is 89 percent.

"So, please don't use the percentage (in judging the country's financial ability)," he said during a joint interview with Malaysiakini and Free Malaysia Today (FMT).

Officially, Malaysia's debt-to-GDP ratio is around 53 percent. However, critics have pointed out that this does not take into account those debts incurred by government-linked companies (GLCs).

For instance, Sunway University's Business School professor Yeah Kim Leng (photo) was quoted by FMT as saying that the country's debt has increased to 70 percent of GDP.

"When we reach 80 percent, it is not like we will go into economic crisis, but it has reached a maximum level and it is time to be prudent as the economy will become more vulnerable to the economic crisis or sovereign debt crises after that," said Yeah.

‘M’sia able to service its debt’

For Johari, what was more important was the fact that Malaysia was able to service its debt.

"In our 60 years of history, despite (the) 1997 and 1998 economic crises as well as (the) 2008 and 2009 world financial crises, we never failed to repay our debt.

"Moreover, we had grown from merely RM4 billion in GDP to RM1.23 trillion (cumulative) over 60 years.

"Of course, there is a lot of improvement needed to be done. We will do it as we progress," he said.

He said any loan taken by the government should be for development purposes, which would stimulate the economy.