The Finance Ministry has given an estimate of the cost of the 1MDB affair to the government. BernamaBiz reports that the government's net financial burden related to 1MDB is estimated at RM20.1 billion, according to the ministry. I have only seen the headline, so I do not know how the figure was calculated, over what period or what offsets, such as recoveries of assets, were included.
The word net suggests that the number takes into account recoveries or other offsets, though that is my interpretation, and I cannot confirm what is included. The figure is large, equivalent to a significant share of a typical year's development spending. It reflects the consequences of the scandal over the use of funds from the state investment company, which led to investigations in Malaysia and other countries.
The announcement comes days after 1MDB won an appeal for a fresh hearing on a US$3.78 billion judgment against financier Jho Low and his father. Recovering assets from abroad is a complex process, and the amounts recovered so far, as well as the potential for further recoveries, will influence the final burden. I have not seen the ministry's estimate of how much more might be recovered.
For citizens, the key issue is accountability and transparency. Clear reporting on the costs, the recoveries and the lessons learned can help to rebuild trust. The prime minister has said that the past system lacked transparency and failed to tackle corporate crimes, and the government is promising governance reforms in the budget. Watch for the ministry's full explanation, for parliamentary questions and for updates on legal cases abroad. Public debate will probably continue on how best to prevent similar problems in future.
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