Asking Scott Bessent: Can Malaysia Grow Its Way Out of Debt—and Into Greater Prosperity?

When US Treasury Secretary Scott Bessent was asked about America’s national debt crossing the astonishing US$40 trillion mark, his response was strikingly simple: 

“There’s nothing magic about the $40 trillion number… we can grow our way out of that.” 

He subsequently argued that global economic growth is the way to deal with the mountain of debt. It is an interesting proposition, particularly for Malaysia.

America’s debt has now exceeded 120% of its GDP, while Malaysia’s federal government debt remains below 65% of GDP. The comparison should not be taken too literally because the two economies, currencies, financial markets and debt structures are very different. 

Nevertheless, Bessent’s argument raises a question Malaysia should be asking itself. Can stronger economic growth make the task of managing and eventually reducing our debt burden easier?

The answer is yes—but only partly.

Amanat Perdana: The Fiscal Test

The Amanat Perdana Hari Kebangsaan delivered by Prime Minister Anwar Ibrahim was, in many ways, a political acknowledgement that economic progress cannot be measured merely by GDP growth, investment numbers or fiscal statistics. It must also be felt in the daily lives of ordinary Malaysians.

The decision to restore the BUDI95 monthly quota from 200 litres to 300 litres is perhaps the clearest example. More than 16 million Malaysians will again have access to subsidised RON95 up to the higher ceiling, while eligible diesel pickup and jeep owners can receive up to 400 litres. The Government says the decision was made after months of monitoring and was supported by better supply management, stronger enforcement, a resilient economy and improved fiscal capacity.

Critics have pointed to the apparent inconsistency with earlier statements that only about 1% of users would be affected by the reduction. But this criticism misses an important distinction. A policy can be technically defensible when introduced and subsequently revised when evidence shows that circumstances have changed. Governments should not be prisoners of yesterday's policy.

The same flexibility can be seen in e-Invoicing. The threshold has progressively moved upwards, and the latest decision exempts businesses with annual sales below RM3 million. More than 1.1 million businesses are expected to benefit. This is not necessarily a retreat from tax administration reform. It can equally be interpreted as recognition that compliance costs can be disproportionately burdensome for smaller enterprises.

The Amanat Perdana therefore demonstrates a government prepared to listen.

Beyond the 70%: Why Malaysia Needs a Different Economic Conversation

 

Dr Suraya Ismail of the Khazanah Research Institute (KRI) recently made a thought-provoking observation that about 70% of Malaysian households do not appear to benefit meaningfully from the wealth generated by the nation. 

The figure deserves careful qualification and should not be interpreted as saying that 70% of households are poor or receive no benefit whatsoever from economic growth. Nevertheless, the broader message is difficult to ignore: there can be a substantial gap between what the economic statistics say and what households actually feel.

This gap matters because economic management is not only about producing good numbers. It is also about communicating honestly what those numbers mean to ordinary people.

US Debt Hit US$40 Trillion: A Lesson for Malaysia

 

The United States has crossed a fiscal milestone that would have seemed almost unimaginable a decade ago. On 18 August 2026, total US national debt reached US$40.047 trillion, according to the US Treasury. The debt has more than doubled from approximately US$19.95 trillion in January 2017. 

The significance of US$40 trillion is not the number itself. The bigger question is whether the American economy and government revenues can grow sufficiently to service the debt without requiring progressively larger borrowing. That is the real fiscal test—and it is a question Malaysia should take seriously.

The US experience is therefore not a warning that Malaysia is about to face an American-style debt crisis. It is a warning about how a manageable fiscal problem can become politically and economically difficult to correct if structural deficits are allowed to persist for too long.

Who Deserves the Political Credit for Johor's Economic Success?

 

As Johor heads into another state election, one familiar campaign theme has once again taken centre stage: the economy. 

Political parties routinely claim that economic growth, investment inflows, rising exports or employment opportunities are proof that voters should reward them with another mandate. Conversely, opponents argue that economic challenges such as inflation, the cost of living or a weaker currency demonstrate the incumbent's failure.

Yet beneath these familiar campaign narratives lies an important irony. In reality, it is often difficult—if not impossible—to attribute economic success or failure solely to any particular political party.

Johor presents perhaps the clearest example of this complexity.

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Why Malaysia Should Not Rush Into Fuel Pain While Markets Are Calming

For weeks, the global conversation was dominated by one question: what happens if oil breaches levels that force governments into difficult choices?

Now, markets appear to be signalling something different. The latest developments surrounding the United States–Iran negotiations suggest movement towards de-escalation and a possible settlement framework, even though many details remain confidential and implementation risks remain. 

Financial markets reacted before diplomats finished speaking. Wall Street rallied, and oil prices retreated sharply as traders priced in expectations that supply disruptions may ease and that the Strait of Hormuz could gradually reopen to normal commercial traffic.

Oil has fallen significantly from recent peaks, although prices remain elevated compared with pre-conflict levels and continue to trade in a volatile range around the psychological USD80 per barrel mark. Markets are not celebrating peace; they are removing part of the geopolitical fear premium.

When Politics Meets Economics: Isham Jalil’s Podcast Homework Problem

It was a refreshing change to see Isham Jalil step away from his usual political commentary and return to economics — after all, economics is his actual vocation. 

As an economics graduate from an Ivy League university in the United States, a former civil servant, and a former officer in the Prime Minister’s Department, one would expect him to be most comfortable discussing fiscal policy rather than engaging in personal attacks and political polemics.

Political blogger Jepry Jaws once contrasted Isham with Nurhisham and observed that much of Isham’s public commentary tends to revolve around political attacks, emotional narratives, and one-sided arguments. Unfortunately, despite his prominence on social media, his political influence remains limited. He has yet to demonstrate significant electoral appeal, having struggled even at the party grassroots level.

Perhaps that is why his recent appearance on Shamsul Akmar’s Khabarnya podcast was particularly interesting. For once, Isham was discussing economics rather than politics. Unfortunately, the economics was not much better than the politics. The Harvard economic graduate couldn't pin down a Minister of Finance with a Malay Study degree from a local University.