An election budget?



In response to Prime Minister Najib’s budget speech today, Wan Saiful Wan Jan, chief executive of the Institute for Democracy and Economic Affairs (IDEAS), issued the following statement:

I am glad to see the Prime Minister being very confident about what the country can achieved next year. It seems like he is certain that our economy will improve. This is a positive note.

I am worried, however, with the level of spending promised by the Prime Minister. The allocation for 2011 is almost 3% higher than 2010. Where will the additional money come from? We are already in deficit. The logical thing to do when we are in debt is to cut spending. But it seems like this year the government decided to spend even more.

What is even more worrying is the way the budget is allocated. Out of the RM214 billion allocated for 2011, RM163 is for operating expenditure and only RM51 billion for development expenditure. This means the government is committed to maintaining a bloated civil service, with civil servants devouring 75% of the allocation!

I do not see how this budget is coherent with the Prime Minister’s intention to let the private sector lead the economy. It seems like the size of government is going to be as big as ever, if not bigger. There is no sign that the Prime Minister will cut the size of government and allow the private sector to flourish. In fact, the setting up of a new GLC – the Talent Corporation – is actually a new additional interference in the market by the government.

Having said that, I really like the decision to make it easier to become a permanent resident (PR) of Malaysia. We need to attract talents from around the world and there is no point preventing people from settling in this country. Immigration is a good thing and it should be made easier.

On a different note, I must say that this budget looks very much like a preparation for a general election. There are promises for more money for JKKK, KAFA teachers, and imams, as well as price cap for PLUS tolls, and various other “carrots” are being dangled to voters.

As ever, the challenge now is in the implementation. Corruption and leakages must be reduced. We have heard so many times our political leaders shouting bombastic ideas to the rakyat, but corruption and leakages are still rampant. This must be fixed immediately.

Wan Saiful Wan Jan
Chief Executive
Institute for Democracy and Economic Affairs (IDEAS)
K3 Taman Tunku, Bukit Tunku,
50480 Kuala Lumpur, Malaysia
Tel: +603 6201 6334


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