By Chester Tay, The Edge Markets (14 February 2023)
KUALA LUMPUR (Feb 14): PKR lawmaker Wong Chen has mooted the idea of an initial public offering (IPO) for Petroliam Nasional Bhd (Petronas) to help the government pare the national debt.
“The listing of Petronas will provide a massive cash injection to pare down the national debt, provide more financial transparency and better governance to Petronas, hence improving overall fiscal revenue for the government,” he said at the Dewan Rakyat, while debating on the motion of thanks on the royal address.
Wong (PKR-Subang) believes that proceeds raised from the Petronas IPO could reduce the government’s debts to about 30% of gross domestic products (GDP) in 10- to 15 years.
“I believe [that] once Petronas is managed under a high international governance standard, its profit, from about RM60 billion annually on average, could breach RM100 billion per annum,” he said.
“With the listing of Petronas, with a 20% stake sold to the public, we could raise RM300 billion, increasing profit by RM60 billion a year. If we pay all of them [to settle] our country’s debt, we may be able to reduce (the debt) to a controllable level of 30% to GDP.
“Therefore, I urge the government to conduct a comprehensive study immediately, before factors like climate change affect valuation of Petronas’ assets. We should follow the wise steps taken by Saudi Arabia, through the listing of Saudi Aramco in 2019,” Wong added.
Apart from a possible listing of Petronas, Wong also urged Putrajaya to cut out corruption with a better procurement policy due to the government’s tight fiscal space, and avoid introducing new tax amid an uncertain global economy.
“Although the economic condition has begun to recover, our economy is highly dependent on international trade and the global economic outlook remains uncertain. In this global situation, I wish to advice my own government to not introduce any new tax to strengthen the government’s fiscal condition.
“What needs to be done by the government is to review issues relating to procurement policies, to cut out corruption with better procurement policy,” he said.
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