The government will continue to exercise prudent financial management not only to ensure the sustainability of the economy but also the people's welfare over the long term, said Minister in the Prime Minister's Department, Datuk Amirsham A. Aziz.

To this end, the government would be prudent when it comes to managing Petronas, the national oil corporation, he said when dismissing suggestions that Petronas should directly finance infrastructure and development projects in the country. This is because oil and natural gas reserves are limited commodities, he said during the "Bersemuka Bersama Media" programme on TV1 RTM Tuesday.

He said the government which currently received dividends and tax payments from Petronas, will be investing the income to ensure the future well being of the people. Amirsham, who pushed aside the suggestion, particularly from the Opposition to use the earnings from Petronas directly for development projects, said if the earnings of Petronas is not used carefully, it could jeopardise the future of Malaysia.

Citing analysts, he said the oil and gas reserves were expected to last for four to five years only. If the income of Petronas as a national oil corporation is jeopardised, Malaysia's financial rating will be also affected, he said. This will make it difficult for Malaysia to get loans.

The one-hour programme also included Deputy Editor-In-Chief of Bernama Economic Service, Salbiah Said, and the Economic Desk Editor of Utusan Malaysia, Mustafa Kamal Basri. When asked on the proposal for the KL-Singapore bullet train, he said the government should not be taking the risk of the project as its cost was very high. He said the private sector was expected to take the major cost of developing the project which has been estimated to cost RM8 billion. The train is being proposed by conglomerate YTL Corporation. The train is expected to cut travel time between Kuala Lumpur and Singapore to just 90 minutes.

On the suggestion that the current two percent inflation rate was not a realistic figure, he said such a perception could have come up on the assumption that the Consumer Price Index was derived based only on the rise in the prices of food products. He said that although the price of food had gone up, he said the cost of housing, telecommunication and transport which have not gone up have been also taken into account. This has given a lower average inflation rate, he said.

Amirsham also said the government was now concentrating on increasing the income of the people and the nation's per capita income which will cushion the shocks of rise in the prices of oil and an uncertain share market. He said the government will also continue with its efforts to eradicate poverty both in the rural and urban areas with particular attention to building houses as well as creating more job opportunities for the people.

He said Malaysia will also be consistent with its business friendly policies to attract foreign investments into the country. On views that investors were now taking a cautious stand on investing in Malaysia due to the current uncertain political scenario, he said it was a temporary phenomena. "Political stability in Malaysia is still present, and BN is still leading the government," he added.

BERNAMA, 16 April 2008

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