|
Malaysian State Says It Is Nearly Bankrupt
by Kazi Mahmood for IslamOnline
KUALA LUMPUR, March 9 (IslamOnline & News Agencies) - The Islamic government of the state of Terengganu said on Thursday that it is going broke and has to find other sources of revenue in order to stay afloat in the coming months.
As a result, the Party Islam Se-Malaysia (PAS) led government of the oil rich state decided to sue the federal government and national oil company, Petronas, in a bid to present its case to the public and win support from Malaysians.
The federal government headed by Mahathir Mohamad, the longest serving Prime Minister in the ASEAN region after Lee Kuan Yew of Singapore, initiated policies designed to "highjack" oil revenue worth $200 million annually from the Islamic state, a PAS member told IslamOnline.
He added that the move was politically motivated and designed to weaken the Islamic drive in the northern Malay belt states.
Terengganu State Secretary Mazlan Hashim said the state government had been struggling to make ends meet since the federal government stopped oil royalty payments to the state last September.
"Oil royalty contributes up to 80% of the state's annual budget. How do you expect us to live with only 20% now?
"We are even having problems with paying civil servants their salaries," Tun Salleh Abas, a Terengganu state government executive councilor, told a news conference after the suit was filed.
He claimed that the giving of federal government loans, a traditional practice that allows state governments to tide over financial difficulties, had also been frozen.
"The federal government is strangling us both ways," he said.
Tun Salleh, a former Lord President, the top judge in Malaysia, said he believed the state government had a strong case.
"Our case is strong, almost impeccable. As for the rest, we pray to Allah," he said.
The state government is seeking the reinstatement of more than $200 million in annual oil royalty due to it under an agreement signed in 1975.
Kuala Lumpur stopped oil royalty payments to the Terengganu state government and in its place, offered a special payment made directly to the people in the form of financing for development projects.
The government had said that the special payments would be made directly to the people in order to avoid any possible abuse by the state government. However, the PAS claims that this was a desigend plan by the federal government to direct the money to its supporters in the state, and undermine the PAS in Terengganu.
The federal government paid over $100 million to the state government last March as royalty payment for the second half of 1999. The Islamic government of Terengganu says it used the money to pay off debts left over by Mahathir's party when it was controlling the state.
PAS wrested Terengganu state government from the ruling National Front (NF) in November 1999 and the payments of oil-royalty have been a contentious issue since.
Mahathir's government never withheld royalty payments to the United Malays National Organization (UMNO) led state government in Terengganu when they were in power.
|
