Briefly on the 2012 budget
I was working when PM was giving his speech. What I got was from Malaysiakini and MI later in the night. I need to go through it first..But I will just give a cursory brief and let some of the readers voice out their views.
On the glance of it, it sounds good , but not exciting. Even though the civil service is the biggest beneficiary, I am glad that the raise for salary for civil servants was not 40% across the board, which would have led to a much higher inflation rate , as was earlier rumoured.
As the assistance for families earning less than 3000 and handouts for students are one-off items, I am not too bother about it. If the handouts are on a regular basis, I would object, since a perk once given would be difficult to be withdrawn later on.
I only hope that all the projects and handouts can be done with minimal leakages and wastage. You may have noted that previously in the blog , I mentioned that someone holding high position once told me that projects are formulated more for the leakages and wastage, rather than the benefits for the rakyat. I hope this time, PM realises that it is his ‘do and die’ battle, and keep the wastage to a minimum.
The PR budget sounds good too, but they are actually dependent on trimming the wastage and leakages and thus freeing some of the money to give to the rakyat. It is a political budget; whether they can do it or not , depends on whether they can tackle the mother of all ills in this country, corruption and thus the leakage and wastage.
Without a determined will to tackle corruption, many of the good salient points in both budgets would go to the ‘dog’, so to speak..
Having said that, I view PM’s budget as a political budget, too, the so-called election budget.. After all, politicians need to win the votes before they can implement their ideas, so I actually do not fault them on this, as long as they do it within our means , and do not hurt our future generations by living on future money.
Talking about within our means, i noted that our debt servicing is going to hit 20.5 billions, up from 12 billion in 2008. This compares with a development budget of 51.2 billions and an operating budget of 181.6 billions, a big portion of which goes to emoluments for our civil service. We should be more prudent and rein in our budget deficits within the next couple of years, otherwise, the debt servicing ratio will keep increasing, and although this debt ratio is still manageable, this amount of money could have been channeled to help transform our economy.
Both budgets are mainly tailored to the social needs , but not much is tailored to the structural transformation from a middle income nation to a high income country or to make the country more efficient and competitive, apart from the opening the 17 sub-sectors which are mainly the domains of the professionals.
I suppose as the country is now at a crucial cross roads, both sides want to make sure they win the hearts of the people first before addressing to the structural aspects of the economy. On the social aspect, the assistance given to the senior citizens is welcomed (discount on fares and so on), as well as extending the retirement age.
The problem in Malaysia is that politicians often think that the ‘end’ justifies the ‘means’, not realising that improper ‘means’ can give rise to a certain culture of ‘greed’ and ‘on-the-take mentality’ and thus the ‘means’ if it is not based on morality or good governance can ultimately affect and derail the vision for achieving the ‘end’. That was what happened during the last couple of decades. THIS IS WHAT HAPPENS TO THE BUDGET NOW, A ‘MEANS’ BEING USED TO GET VOTES AND NOT TO ADDRESS STRUCTURAL PROBLEMS.
The main question is that with some of the developed economies facing the prospect of another slowdown or even recession, and Malaysia economy dependent on external trade, can we achieve a growth rate of 5-6%? I wonder. Oil prices will come down if there is another world recession, demands for our goods will be affected, and commodities, too, would be affected by another recession. ( The recent World Economic Outlook report by IMF expects global growth to moderate to about 4 per cent through 2012, from over 5 per cent in 2010. Real GDP in the advanced economies is projected to expand by about 1.9 per cent in 2012 and emerging markets to grow by 6 per cent in 2012, but there is actually a further downside risk) .