Published by New Straits Times, The Malaysian Insight & i3 Investor, image from New Straits Times.
DUE to the unprecedented impact of Covid-19, governments the world over – and Malaysia is no exception – have had to ramp up spending with borrowing or issuance of public debt. But is this necessary? Can’t the government just print the ringgit and dish out helicopter money so that everyone has the cash to spend our way out of the economic doldrums?
That the government can legally print money does not mean that it is in a position to do so. For starters, printing money so as to increase government spending without the need to issue debt, as a form of deficit spending, is not desirable when our currency has experienced significant depreciation in recent years.
Printing money will add further downward pressure on the ringgit as the foreign exchange currency market expects the government to print more in the future.
In practice, printing money is followed by printing of more money as in the case of Zimbabwe and the Weimar Republic of post-World War 1 Germany. So, we still need to issue Malaysian government securities (MGS) alongside government investment issues and sukuk to cover our development and infrastructural expenditure.
This will not only maintain the integrity of our ringgit but may also fuel fresh demand from foreign investors or buyers. The downside is, of course, the risk of capital flight or premature sell-offs.
Unlike the capital market, when it comes to the government bond market, this can be easily and readily cushioned in the secondary market by Bank Negara (albeit limited) together with purchases by the commercial banks.
Furthermore, printing money should be the last resort. Anyway, the last time Bank Negara could be said to print money was during the Asian financial crisis of 1997/98 when Danaharta issued triple-A zero-rated coupon bonds to institutional investors such as EPF, Khazanah, pensions funds and insurance companies that was later to be exchanged for the non-performing loans (NPLs) from the participating banks.
Notwithstanding, some still worry about the government debt levels based on the analogy with the “household” spending. In other words, they worry about the burden of government debt having to pass on to future generations to bear in the form of higher taxes.
It has to be highlighted that it is customary for governments in general, and again Malaysia is no exception, to roll-over their present maturing debt with issuance of fresh debt. In fact, there is also such a thing as perpetual debt ranging from 50 to 100 years.
Even during the Great Recession of 2008 which did not particularly affected Malaysia as our financial system was sound and stable due to high levels of capital adequacy ratio, our budget deficit was 7% and was even higher before that.
With the government aiming to reduce the budget deficit to about 3-3.5% of GDP just prior to Covid-19, we have both ample room and historical precedent to increase our borrowing and by extension our expenditure to double that amount, as confirmed by Tengku Zafrul Abdul Aziz, our finance minister.
But let us leave aside the role that government debt plays in the main, and that is, to finance the government’s spending commitments.
What are the other benefits of government borrowing or public debt issuance?
Firstly, government debt is simply an extension of the government’s monetary policy stance, i.e. the overnight policy rate (OPR) set by Bank Negara. We know that the OPR is meant to influence the market interest rate.
Now, while MGS yields or rates do not influence the market interest rate directly, they do influence the pricing of private sector debt securities such as corporate bonds and money markets. In turn, this will factor into the balance sheet of banks and therefore, their base rate calculations used for loans.
Secondly, and just as important is the fact that government bonds, and it cannot be strongly emphasised enough, provides a safe haven for investment in risk-free, sovereign assets. Approximately 97% of our debt is in ringgit and therefore the chances of the government defaulting are nearly zero.
Of course, this begs the question of money printing at the end. But we don’t have to resort to this position. Recall that the government is always in a position to roll over its current maturing debt perpetually.
Thirdly and finally, the necessity of government debt can be seen in its role and value as provider of liquidity for the financial markets, albeit recycled. Funds obtained by the private sector lenders through direct fiscal injection is sucked out of the economy and goes back into the coffers of the government.
At the same time, the bonds themselves become part of the financial system – readily to be traded or used as collateral for borrowings. This is how the liquidity of the financial system is enhanced.
As such, government debts act and serve as lynchpin for the stability of financial markets by ensuring ample liquidity without the need for the central bank to resort to quantitative easing (QE) which is the creation of fresh reserves in exchange for high quality assets.
Bank Negara is too cautious and careful to engage in QE and rightly so. And our government of whatever political stripes has always been acutely aware of the need to be prudent in expenditure and borrowings and hence, the 55% ceiling of the debt-to-GDP ratio.
At the end of the day, government debt is necessary. And the government is not about to gamble away the future of our public finances by unnecessarily printing money and also in no danger of “over-borrowing”.
Also, it is important to ensure the debt raised is used for productive yield that has multiplier effect. Not for unproductive expenses in building white elephants or other unproductive mega projects.
Jason Loh Seong Wei is Head of Social, Law and Human Rights at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.
Diterbitkan oleh Free Malaysia Today & Berita Harian.
Ekoran kesan Covid-19 yang buat julung kalinya melanda dunia, kerajaan di seluruh dunia – termasuk Malaysia – terpaksa meningkatkan perbelanjaan dengan meminjam atau mengeluarkan hutang awam. Tetapi adakah ini perlu? Tidak bolehkah kerajaan mencetak wang untuk diagihkan bagaikan wang dari helikopter agar setiap orang mempunyai wang untuk berdepan ekonomi sedang merudum?
Meskipun kerajaan boleh mencetak wang, namun tidak bermakna ia boleh berbuat demikian dengan sewenang-wenangnya.
Pada prinsipnya, mencetak wang untuk meningkatkan perbelanjaan bagi mengelakkan berhutang tidak wajar dalam keadaan mata wang negara mengalami penyusutan ketara dalam beberapa tahun kebelakangan ini.
Mencetak wang akan menambah tekanan penyusutan terhadap nilai ringgit kerana pasaran mata wang asing menjangkakan kerajaan akan mencetak lebih banyak lagi wang pada masa depan.
Realitinya, mencetak wang akan disusuli lebih banyak pencetakan wang seperti yang berlaku di Zimbabwe dan Republik Weimar (Jerman) pasca Perang Dunia Pertama.
Oleh itu, kita masih perlu mengeluarkan Sekuriti Kerajaan Malaysia (MGS) bersama Terbitan Pelaburan Kerajaan (GII) dan sukuk untuk menampung perbelanjaan pembangunan serta infrastruktur negara.
Ini bukan saja dapat mengekalkan integriti ringgit, tetapi juga mendorong permintaan baru daripada pelabur atau pembeli asing. Namun, risikonya ialah pelarian modal atau penjualan sebelum sekuriti itu tamat tempoh.
Tidak seperti pasaran modal, apabila merujuk pasaran bon kerajaan, ianya dengan mudah dapat dibeli di pasaran kedua oleh Bank Negara (walaupun terbatas) bersama bank komersial.
Tambahan pula, pencetakan wang harus menjadi pilihan terakhir. Kali terakhir Bank Negara dikatakan mencetak wang adalah semasa krisis kewangan Asia 1997/98 ketika Danaharta mengeluarkan bon kupon sifar bertaraf tiga A untuk pelabur institusi seperti Kumpulan Wang Simpanan Pekerja (KWSP), Khazanah, dana pencen dan syarikat insurans yang kemudiannya ditukar dengan pinjaman tidak berbayar (NPL) daripada bank yang mengambil bahagian.
Namun, terdapat kebimbangan mengenai tahap hutang kerajaan berdasarkan analogi perbelanjaan “isi rumah”. Dengan kata lain, mereka bimbang beban hutang kerajaan sekarang akan ditanggung generasi akan datang dalam bentuk cukai lebih tinggi.
Secara umumnya, setiap kerajaan di seluruh dunia, termasuk Malaysia menghidupkan semula hutang yang lupus dengan menerbitkan hutang baru. Malah, ada juga hutang berterusan antara 50 hingga 100 tahun.
Malah, semasa kemelesetan ekonomi 2008 yang tidak begitu menjejaskan Malaysia kerana sistem kewangan kukuh dan stabil berdasarkan nisbah kecukupan modal tinggi, namun defisit belanjawan negara adalah 7%, bahkan lebih tinggi sebelum itu.
Kerajaan menyasar mengurangkan defisit belanjawan sekitar 3% hingga 3.5% jumlah KDNK sebelum Covid-19, lantas kita masih memiliki ruang untuk meningkatkan pinjaman kita dan seterusnya perbelanjaan, sekaligus menggandakan defisit tersebut seperti yang ditegaskan Menteri Kewangan, Tengku Zafrul Abdul Aziz.
Apakah faedah pinjaman kerajaan atau mengeluarkan hutang awam?
Pertama, hutang kerajaan sebenarnya lanjutan daripada dasar monetari kerajaan, iaitu kadar dasar semalaman (OPR) yang ditetapkan Bank Negara. OPR bertujuan mempengaruhi kadar faedah pasaran.
Walaupun kadar pulangan MGS tidak mempengaruhi kadar faedah pasaran secara langsung, namun mereka tetap mempengaruhi harga sekuriti hutang sektor swasta seperti bon korporat dan pasaran wang.
Seterusnya, ini akan menjadi pertimbangan dalam kunci kira-kira bank dan lantaran itu, pengiraan kadar asas (BR) digunakan untuk pinjaman.
Kedua, sama seperti bon kerajaan, ia merupakan tempat perlindungan selamat untuk pelaburan dalam aset berdaulat dan tanpa risiko. Kira-kira 97% hutang negara dalam ringgit, lantas kemungkinan kerajaan gagal membayar hampir sifar.
Sudah tentu ini menimbulkan persoalan mengenai percetakan wang. Namun, kita tidak perlu menggunakannya sebagai jalan keluar. Perlu diingatkan, kerajaan akan selalu berada dalam keadaan terus melanjutkan hutang yang lupus dengan mengeluarkan hutang baru.
Ketiga, keperluan hutang kerajaan dapat dilihat melalui peranan dan nilainya sebagai penyedia kecairan untuk pasaran kewangan, walaupun secara kitar semula.
Dana yang diperoleh pemiutang sektor swasta melalui suntikan fiskal langsung disedut keluar daripada ekonomi dan masuk semula ke tabung kerajaan.
Pada masa sama, bon secara automatik menjadi sebahagian sistem kewangan – sedia untuk diperdagangkan atau digunakan sebagai cagaran untuk pinjaman. Inilah cara kecairan sistem kewangan dikembangkan.
Oleh itu, hutang kerajaan bertindak dan berfungsi sebagai pendokong kestabilan pasaran kewangan dengan memastikan kecairan mencukupi tanpa perlu bank pusat melaksanakan operasi pelonggaran kuantitatif (QE) yang
merupakan penciptaan rizab baru untuk pertukaran aset berkualiti tinggi.
Bank Negara amat berwaspada dan berhati-hati untuk terlibat dalam QE serta pendekatan sebegini adalah wajar. Dan kerajaan kita menyedari keperluan berhemah dalam perbelanjaan dan pinjaman, oleh itu siling 55% nisbah hutang-kepada-KDNK disasarkan.
Hutang kerajaan itu sememangnya perlu dan kerajaan tidak akan mempertaruhkan masa depan kewangan negara dengan mencetak wang sewenang-wenangya dan juga tiada bahaya “pinjaman berlebihan”.
Tambahan, penting untuk memastikan hutang digunakan bagi hasil produktif yang mempunyai kesan berlipat ganda, bukan untuk perbelanjaan tidak produktif dalam pembinaan gajah putih atau projek mega lain yang tidak produktif.
Jason Loh Seong Wei merupakan Ketua Bahagian Sosial, Perundangan dan Hak Asasi di EMIR Research, sebuah badan pemikir bebas yang berfokuskan kepada pencernaan saranan-saranan dasar strategik berteraskan penyelidikan yang terperinci, konsisten dan menyeluruh.
