politics

Japan to provide Y200 bil loan to help Malaysia battle debt problem

21 Comments
By Mari Yamaguchi

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21 Comments
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This is actually quite funny when you think about it..... Japan, as a percentage of GDP, is the most in debt country in the world, even higher than Greece. But the debt is mostly held domestically so no one outside of Japan is that worried about it. The reason is because Japan's overall economy is relatively solid, it runs well with no major financial crises. However, that said, Japan has thrown over $3 Trillion at Stimulus packages over the last 30 years. This is the reason Japan remains "Solid". Anytime a problem comes along, they issue more bonds and fix it that way. Hey.... as long as they never have to "pay the piper", I'm good.

5 ( +7 / -2 )

Fair comments, but Malaysia has been particularly shafted by the recently ousted Prime Minister, Najib, who is basically a crook, and is likely to be convicted with massive embezzlement and other charges. For Japan to offer financial assistance IF it is needed is a decent gesture from a more advanced fellow Asian country.

4 ( +6 / -2 )

Excellent gesture of financial support extended by PM Abe to Mahathir Mohamad.

4 ( +6 / -2 )

A country deeply in debt loans money to another country deeply in debt to help that other country deal with its debt problems.

Yeah, this is going to end well.

Of course, the alternative is that Malaysia takes money from China, which is tantamount to handing China new, additional political leverage in Southeast Asia, plus likely access to large swaths of Malaysia's natural resources should China ever demand payment and start seizing assets. Loaning money Japan doesn't have is preferable to ceding power to chief rival, China.

4 ( +4 / -0 )

Sure, Japan can easily afford to bail out incompetently governed countries that already receive huge amounts of foreign investment .

3 ( +7 / -4 )

That’s how you buy friends.

3 ( +3 / -0 )

"This is actually quite funny when you think about it..... Japan, as a percentage of GDP, is the most in debt country in the world, even higher than Greece. But the debt is mostly held domestically so no one outside of Japan is that worried about it. The reason is because Japan's overall economy is relatively solid, it runs well with no major financial crises. However, that said, Japan has thrown over $3 Trillion at Stimulus packages over the last 30 years. This is the reason Japan remains "Solid". Anytime a problem comes along, they issue more bonds and fix it that way. Hey.... as long as they never have to "pay the piper", I'm good."

Plus the fact that Japan is:

1) The word's largest creditor Nation.

2) Japan's banks hold the world's largest private cash deposits

3) Japan's Post Office holds the world's largest cash reserves

4) Lastly, as your rightly pointed out, Japan's MASSIVE DEBT is around 97% held domestically.

That is akin to borrowing from your mum; you'll pay whenever you feel like it.

In this respect Japan is unique; and that's what escapes most critics of Japan's HUGE DEBT.

Unlike China, US of A, Britain et al, all of whom owe money to foreigners.

Not exactly like borrowing from your mummy, is it?

2 ( +5 / -3 )

Hard to believe PM Mahathir is 9 years old than Emperor Akihito!!!

1 ( +2 / -1 )

It will all unravel one day, then we will all have to pay for this "generosity "

1 ( +3 / -2 )

This loan is important for both Japan and Malaysia given China's influence and expansion in the Southeast Asia Sea. More should be considered in case Dr Mahathir proves his competency in playing the midfielder role in Abe's team.

1 ( +1 / -0 )

@Peeping_Tom

 But the debt is mostly held domestically so no one outside of Japan is that worried about it.

The problem is that Japan's tax collectors are worried about it. They are busily broadening our tax base, while the govt prepares to hike our consumption taxes in a bid to shrink the debt. I've known a couple of people who have been audited by a tax office which is desperate to collect more of our money, income any assets we have abroad.

Also expect caps on social security on fiscal grounds. We will all be worse off.

1 ( +2 / -1 )

"A "loan" to help battle a "dept" problem? That seems self-contradictory."

REALLY?!

Ever heard of a second charges on fixed asset?

0 ( +1 / -1 )

@JefLee

The quote is not mine; pls see above before addressing the wrong poster.

In any event Japan's "demise" is not going to happen tomorrow; the current structure will survive well into the 2040's; after that (should nothing change, which is highly unlikely), Japan could still default on itself.

Not the same as defaulting on international creditors.

https://www.forbes.com/sites/peterpham/2017/12/11/when-will-japans-debt-crisis-implode/

Japan is not facing the same predicament as the US, China and Britain, just to name a few. Moreover, those same countries owe most of their money to foreign investors/creditors, Japan being the biggest of them all.

0 ( +1 / -1 )

I know one thing. Somebody needs to bottle that 93 year olds genes. Its incredible

Its pretty clear Malaysia needs to tighten belts though, regardless of the loan.

0 ( +0 / -0 )

@Peeping_Tom

The quote is not mine; pls see above before addressing the wrong poster.

Right. Next time, pls press the quote, bold or italics icon on quoted text so readers can easily distinguish which text is is quoted and which is not. The text in your post was all the time font, size and spacing.

In any event Japan's "demise" is not going to happen tomorrow

I didn't say it would. My point is that the tax authorities, government and others are bent on squeezing more tax revenue out of us Japan residents in a bid to pay down the fiscal debt, which they at least view as a danger.

Hence, the same government should not be propping up another country that created its own fiscal mess for itself, even while receiving huge amounts of investment from abroad.

0 ( +0 / -0 )

Meanwhile, taxes here and need to be raised because we have no money. And if they forfeit on this loan we lose that too. Why doesn’t the prime minister give them alone to the people of the country who are suffering?

-1 ( +2 / -3 )

As an Islamic Nation surely it would have been more appropriate to have borrowed the money from a fellow Islamic Nation say, in the Middle East. Surely it must be galling to be borrowing from a Country that Moslems would consider to be a Nation of Infidels.

-1 ( +1 / -2 )

Use loan to battle debt ? What a joke.

-1 ( +1 / -2 )

A "loan" to help battle a "dept" problem? That seems self-contradictory.

-2 ( +0 / -2 )

Just imagine what 200 billion yen can do for Fukushima.

-4 ( +1 / -5 )

Waste of money. This ceremony is in this day and time silly. Malaysia is a 3rd world country and economy that takes handouts from 1st world countries to survive and should be creating an infrastructure to import manufacturing projects that can be exported to support its needs.

-6 ( +2 / -8 )

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