In a blog post, Jomo said the Covid-19 pandemic had made the government employ expansionary fiscal policies such as greater borrowing and spending, but warned that this could be abused by short-term governments.

“There are widespread concerns that bolder expansionary fiscal policies are likely to be abused by typically short-termist governments of the day, tempted by macroeconomic populism and unconcerned about the medium- and long-term consequences of increased spending, borrowing and debt.

“Poorly accountable governments often take advantage of real, exaggerated or imagined crises to pursue more populist macroeconomic policies to secure regime survival and benefit the politically well connected.

“Only much better governance, transparency and accountability can minimise harm due to likely ‘leakages’ and abuses associated with increased government borrowing and spending,” he said.

Jomo said Putrajaya had set up various special purpose vehicles (SPVs) for infrastructure projects that were heavily reliant on borrowed funds, adding that these were not reported to Parliament until recently.

He also said the SPVs were not “seriously reviewed” by the auditor-general’s office or the public accounts committee.

“For instance, the actual East Coast Rail Link (ECRL) project costs are believed by industry insiders to be less than a quarter of what Malaysians were asked to pay for it, even before considering deferred interest and other costs.

“But it is not the contractors from China who will get most of what Malaysians will have to pay for the ECRL boondoggle for decades to come, but rather the Malaysian (contractors) and other enablers,” he said.

He stressed there needed to be stricter scrutiny of government debt, borrowing, spending and government-guaranteed liabilities, but expressed pessimism of this happening.

“Unfortunately, Malaysia’s political economy seems likely to continue to conspire against improved transparency, accountability and commitment to sustainable development.”