The RM2.5b giveaway that Malaysia can't afford
| When Prime Minister Anwar Ibrahim delivered his 'Penghargaan Untuk Rakyat' speech on 23 July 2025, he painted a confident picture of Malaysia's economic trajectory.
Growth stood at 4.4 percent for the first quarter of 2025, with expectations of 4.5 percent in the second. The ringgit had strengthened against the US dollar, climbing to RM4.23/US$.
Malaysia rose by 11 spots to 23rd place in the World Competitiveness Index, and total approved investments reached a record RM384 billion last year.
However, beyond the headline figures lies a more complex and fragile reality. Analysts have pointed out that Q1 growth underperformed market expectations.
Exports remain uneven. Domestic consumption is cooling, and Bank Negara's recent rate cut reflects the underlying weakness that persists despite upbeat official messaging.
If this is truly a period of recovery, it should have been...
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New Straits Times
2 hours ago
- New Straits Times
Petronas potential sale reflects broader trend
KUALA LUMPUR: Petroliam Nasional Bhd's (Petronas) potential sale of its stake in an oilfield in Brazil reflects a broader trend among state-owned oil and gas companies to streamline their global portfolios, economists said. The potential divestment, which could raise about US$1 billion (RM4.23 billion), comes as Petronas continues to reshape its international upstream portfolio in line with long-term strategic priorities and shifting global energy dynamics, they added. It was reported that the national oil company was working with Bank of America Corp to market its 50 per cent stake in the offshore deepwater oilfield in Brazil's Campos Basin. The Tartaruga Verde field is operated by Brazil's national oil company Petrobras, which owns the remaining 50 per cent. Economist Samirul Ariff Othman said Petronas is in the midst of restructuring its upstream portfolio to boost resilience, prioritise value creation and ensure long-term sustainability in the face of market and geopolitical uncertainties. The strategy involves focusing on assets with strong break-even economics while minimising the group's presence in regions with elevated risk. "In recent years, the company has prioritised monetising non-core assets and reinvesting in areas aligned with its long‑term strategy, including unconventional resources in Argentina and Canada, and focused conventional assets in Brazil, Mexico, Turkmenistan, Iraq and Vietnam. "Selling the 50 per cent stake reflects this approach: monetising an offshore minority interest acquired in 2019, freeing capital for re-investment in more core or higher-return geographies," he told Business Times. Samirul said the national oil and gas company has been steadily withdrawing from non-core or higher-risk international assets as part of its portfolio optimisation strategy. "Ongoing divestments across Africa, including exits from Chad and South Sudan, align with re-focusing efforts. "Earlier moves included exiting Venezuela and underperforming European ventures, emphasising a pivot toward higher-grade, lower-risk upstream opportunities," he added. He added that the move to divest the Brazil stake aligns with Petronas' long-term strategy of shedding non-core offshore assets in order to redirect capital towards key operations and minimise geopolitical or operational risks. Samirul said the reported Petronas move to engage Bank of America to market its Tartaruga Verde stake reflects its ongoing strategic shift, streamlining its upstream portfolio in line with the 2024-2026 Activity Outlook, while redirecting capital toward assets with better break-even performance and stronger alignment with its Net Zero 2050 goals. Similarly, Universiti Teknologi Mara Business Management Faculty senior lecturer Dr Mohamad Idham Md Razak said Petronas' potential exit from the Brazilian asset is consistent with a wider realignment seen across the oil and gas industry. "This divestment aligns with strategic shifts aimed at reallocating resources towards more lucrative or strategically aligned assets. "The Brazilian offshore asset, while potentially profitable, might present operational challenges or uncertainties such as geopolitical risks, currency fluctuations, or regulatory complexities that make it a candidate for divestment," Idham said when contacted. He said the move could form part of a wider strategy to restructure Petronas' portfolio in line with global energy transition trends, potentially unlocking capital for renewable energy investments or higher-yield hydrocarbon projects in other regions. "Petronas' potential exit from international assets, such as the Tartaruga Verde oilfield, could be indicative of a strategic refocusing or a risk-aversion strategy in response to the evolving global energy landscape. "This trend might reflect a broader industry recalibration where companies, in the wake of the pandemic's economic impact and shifting towards cleaner energy sources, are divesting from assets that are either less profitable or do not align with their long-term strategic objectives," he added. Idham said this could be part of a larger trend of asset reallocation to support domestic energy security and decarbonisation efforts. "However, this does not necessarily imply a complete retreat from international ventures, as state-owned enterprises often have mandates to secure energy resources globally, and strategic disinvestments could be offset by new investments or partnerships in more geopolitically stable or strategically important regions," he explained.
New Straits Times
2 hours ago
- New Straits Times
Potential sale reflects broader trend
KUALA LUMPUR: Petroliam Nasional Bhd's (Petronas) potential sale of its stake in an oilfield in Brazil reflects a broader trend among state-owned oil and gas companies to streamline their global portfolios, economists said. The potential divestment, which could raise about US$1 billion (RM4.23 billion), comes as Petronas continues to reshape its international upstream portfolio in line with long-term strategic priorities and shifting global energy dynamics, they added. It was reported that the national oil company was working with Bank of America Corp to market its 50 per cent stake in the offshore deepwater oilfield in Brazil's Campos Basin. The Tartaruga Verde field is operated by Brazil's national oil company Petrobras, which owns the remaining 50 per cent. Economist Samirul Ariff Othman said Petronas is in the midst of restructuring its upstream portfolio to boost resilience, prioritise value creation and ensure long-term sustainability in the face of market and geopolitical uncertainties. The strategy involves focusing on assets with strong break-even economics while minimising the group's presence in regions with elevated risk. "In recent years, the company has prioritised monetising non-core assets and reinvesting in areas aligned with its long‑term strategy, including unconventional resources in Argentina and Canada, and focused conventional assets in Brazil, Mexico, Turkmenistan, Iraq and Vietnam. "Selling the 50 per cent stake reflects this approach: monetising an offshore minority interest acquired in 2019, freeing capital for re-investment in more core or higher-return geographies," he told Business Times. Samirul said the national oil and gas company has been steadily withdrawing from non-core or higher-risk international assets as part of its portfolio optimisation strategy. "Ongoing divestments across Africa, including exits from Chad and South Sudan, align with re-focusing efforts. "Earlier moves included exiting Venezuela and underperforming European ventures, emphasising a pivot toward higher-grade, lower-risk upstream opportunities," he added. He added that the move to divest the Brazil stake aligns with Petronas' long-term strategy of shedding non-core offshore assets in order to redirect capital towards key operations and minimise geopolitical or operational risks. Samirul said the reported Petronas move to engage Bank of America to market its Tartaruga Verde stake reflects its ongoing strategic shift, streamlining its upstream portfolio in line with the 2024-2026 Activity Outlook, while redirecting capital toward assets with better break-even performance and stronger alignment with its Net Zero 2050 goals. Similarly, Universiti Teknologi Mara Business Management Faculty senior lecturer Dr Mohamad Idham Md Razak said Petronas' potential exit from the Brazilian asset is consistent with a wider realignment seen across the oil and gas industry. "This divestment aligns with strategic shifts aimed at reallocating resources towards more lucrative or strategically aligned assets. "The Brazilian offshore asset, while potentially profitable, might present operational challenges or uncertainties such as geopolitical risks, currency fluctuations, or regulatory complexities that make it a candidate for divestment," Idham said when contacted. He said the move could form part of a wider strategy to restructure Petronas' portfolio in line with global energy transition trends, potentially unlocking capital for renewable energy investments or higher-yield hydrocarbon projects in other regions. "Petronas' potential exit from international assets, such as the Tartaruga Verde oilfield, could be indicative of a strategic refocusing or a risk-aversion strategy in response to the evolving global energy landscape. "This trend might reflect a broader industry recalibration where companies, in the wake of the pandemic's economic impact and shifting towards cleaner energy sources, are divesting from assets that are either less profitable or do not align with their long-term strategic objectives," he added. Idham said this could be part of a larger trend of asset reallocation to support domestic energy security and decarbonisation efforts. "However, this does not necessarily imply a complete retreat from international ventures, as state-owned enterprises often have mandates to secure energy resources globally, and strategic disinvestments could be offset by new investments or partnerships in more geopolitically stable or strategically important regions," he explained.
The Star
3 hours ago
- The Star
PM: Govt debt under control, loans used for development
KUALA LUMPUR: Government debt is under control and loans are channelled towards development rather than operating expenditures, says Datuk Seri Anwar Ibrahim. Responding to concerns over the national debt, the Prime Minister said while borrowings were necessary, they must be responsibly managed, with a clear focus on long-term infrastructure and social development. 'As long as we run a deficit, debt will continue to grow. That's why our strategy is to reduce the deficit gradually,' he said in response to Datuk Iskandar Dzulkarnain Abdul Khalid (PN-Kuala Kangsar), who asked if the government was managing debt responsibly given its recent increase. Anwar acknowledged that Malaysia's debt had grown in line with past deficits but said this trend is being reversed. 'As we approach the third year of this administration, our commitment to fiscal reform has led to a consistent reduction in the deficit, from 6.4% in 2021 to 5.5% in 2022, 5% in 2023, and an estimated 4.1% in 2024,' he said during the Prime Minister's Question Time. The Prime Minister said narrowing the deficit has enabled the government to reduce its annual borrowings from RM100bil in 2021 to RM99bil in 2022 and RM92.6bil in 2023. For 2024, it will further be decreased to RM76.8bil. The government, he said, is committed to reducing the deficit in stages to avoid disrupting essential public spending. 'If we cut too abruptly, critical sectors such as education, the Sumbangan Tunai Rahmah (STR), and healthcare would suffer,' he said. Anwar also dismissed the Opposition's claim that the 13th Malaysia Plan (13MP) has overlooked development for bumiputra, pointing to the Bumiputra Economic Transformation Plan 2035 (PuTERA35) as a key component of 13MP, underscoring the government's dedication to bumiputra initiatives. 'We need to study the Plan thoroughly. Otherwise, there's a misconception that funds are only for Chinese new villages and not bumiputra. Clearly, critics haven't read it,' he said in response to allegations by Datuk Awang Solahuddin Hashim (PN-Pendang) that the 13MP favours Chinese new villages over bumiputra development. The Prime Minister also questioned the double standards shown by critics who were silent when opposition-led states raised water tariffs, adding that the Federal Government had no objection to the increases, as there were valid reasons behind them. 'Perlis, Kedah, Kelantan, and Terengganu raised tariffs, but because these are opposition-led states, no one makes a fuss. If it had been the Federal Government raising tariffs, we would be harshly criticised,' he said. The Prime Minister also told Opposition lawmakers to set aside their differences and start negotiations with the government over MP allocations. He said while Deputy Prime Minister Datuk Seri Fadillah Yusof is ready to hear the Opposition, there must be a consensus among them first.
