‘Budget failed to tackle structural flaws’

Free Malaysia Today
Syed Jaymal Zahiid
October 1, 2012

The PKR de facto leader points out that corruption, poor governance and political patronage remain widespread.


KUALA LUMPUR: Opposition Leader Anwar Ibrahim today accused the government of failing to address the fundamental flaws needed to push Malaysia’s economy forward with its Budget 2013.

The PKR de facto leader in his speech at the start of the budget debate said nothing in the Barisan Nasional spending plans indicated any political will to tackle structural problems blamed for the country’s devalued competitiveness.

Corruption, poor governance and political patronage remain widespread, said Anwar, the former deputy prime minister.

He described Prime Minister Najib Tun Razak’s policies as “more for the cronies” disguised as “people-friendly” through generous but one-off perks announced in the budget unveiled in Parliament last Friday.

Anwar said that a strong domestic market driven by small and medium businesses, a skilled labour force, limited government interventions and strong policies are key to sustainable development.

This in turn will help raise income. Spending power, distributed equally even to the poor, is crucial for growth, he added, citing the United Nations Conference on Trade and Development (Unctad) Trade and Development Report for 2012.

“The economic prosperity of the majority… ensures sustainable growth when they continue to invest in the country’s economy… but Budget 2013 touched nothing on holistic efforts to increase the household income,” said Anwar, who was also a former finance minister.

Pakatan had promised to revitalise the economy by raising the monthly household income to RM4,000 and widening the government’s revenue stream by tightening governance, weeding out corruption and introducing policies to boost disposable income like slashing taxes on cars and waivering student loans.

But its proposals have been labelled as unrealistic and populist by political rivals who sought to counter Pakatan’s rising influence, ironically, through measures observers say are similar to Pakatan’s like the hefty bonus distribution and cash handouts.

Economists had warned that Najib risked downgrading Malaysia’s ratings by implementing these programmes amid delaying fiscal reforms needed to tackle the rising deficit which now hovers just below 55% cap.

Lacklustre private sector

The prime minister vowed his government would stay on track in reducing its debt. His government claimed it can cut the deficit to 4% from 4.5% last year despite the 10% increase in next year’s spending, a move Najib had defended as necessary to bolster growth and weather the global economic slump.

But Anwar said just like last year’s budget, much of the allocations may not reach the target groups. He said, according to the Malaysian Economic Monitor April report to the Economic Planning Unit, only 27% of the country’s poorest 10% had received help from the government.

“Whatever happen to the rest of the money we don’t know,” he said.

He pointed out that poor governance and resources management have put Malaysia way behind countries like Taiwan, Singapore and Hong Kong which were on par with Malaysia three decades ago.

Anwar said Najib had also failed to address the lacklustre involvement of the private sector in the country’s development.

Much of Malaysia’s growth is spurred by pump-priming (measures) which disguise the country’s sub-par domestic market and plunging investments.

“The budget did not touch any of the fundamental issues but was only filled with rhetoric and political announcements,” he said.

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