By S.C.
The Macro-Economic Scene
The key economic indicators and assumptions used in the budget formulation are:
It is appropriate to comment broadly on these statistics. The performance for the year 2009 as reported is based on actual outcomes for the first half of the year. There appear to be rather optimistic assumptions of performance for the second half of 2009. Thus, the overall outcome for the year as a whole is based on partial information and therefore subject to a degree of uncertainty.
What is stark is that the budget does not even allude to these pressing issues that are affecting the investment climate and the prospects for growth, let alone offer policy options. The unwillingness to acknowledge these issues makes a mockery of the call for innovation, creativity and value-added activities that the Prime Minister made. The so-called “new economic model” and strategy for high income growth that are promised are therefore rhetorical in nature and remain illusionary given the absence of a coherent and integrated set of policies. The sound and fury built into the budget statement are hollow and will remain so until the BN Government begins to acknowledge what ails Malaysia. It is time that there is a change from the ostrich-like approach that characterizes economic policy making to a more open and environment.
The 2010 budget largely continues with the economic policies of the Mahathir era which can be summarized in the following terms: “ Spend and spend on so called development which is nothing but directed at enriching the UMNOputras and warlords by awarding contracts without the benefit of competitive bidding; privatize public assets into the hands of cronies thus enriching a few chosen individuals; drop a few sops to the public at large via subsidies while the larger share of resources are siphoned off and permitting corruption and rent-seeking on an unprecedented scale.”
The changes announced in the budget are cosmetic for the most part and do not deviate much from the path of previous policies.
(to be contd)