Critique of Mini-Budget
Mar 11th, 2009 by Tian
When we are facing a global crisis of an unknown magnitude, it is difficult to say how much money is needed to cushion the impact.
In general, the problem is not about how much we inject to stimulate our national economy. Or even how much reserve we can afford to use for the package?
We should take the opportunity to evaluate our economic policies and regulatory mechanisms. Global economic recession exposes internal weaknesses of each national economy — it might differ from one country to another.
The package announced by Najib left out institutional reforms, made no mention in strengthening regulatory mechanism and improvement of economic governance.
As a result, we learn nothing from the crisis. We have not even embarked on any serious institutional reforms after we were hit by 1997 Asian Financial Crisis.
Second issue: the package has not addressed the crisis of massive unemployment and escalating poverty, especially urban poverty.
We are uncertain what will be mechanism to ensure funds injected into the economy can ‘trigger’ down to the bottom of the society. While uttering rhetorics against rampant neo-liberalism, the Government seems to blindly believe in the market to do the distribution.
Third: the main chunk of money go straight to cronies and big corporates linked to government or ruling parties.
For example, it is noble to contain toll hike, however Najib simply hands over a big sum of compensation to the concessionaires. The ruling clique continues to enjoy public payout. The Government has no intention to reveal the unfair and non-transparent terms in the highway concessions.
Similarly, the public will be paying for another airport — this time to award to Tony Fernandez. Just about one decade ago, Dr Mahathir built us an airport which promised to serve our needs for the next 50-60 years.
Now we are told we need another low cost airport. Have the Government conducted any thorough studies before such decision.
The Government basically failed to seize the opportunity in this crisis to install better governance mechanisms for our economy. For this, it is not surprise that the package failed to inspire public and investors’ confidence.
The Budget Package is not going to help the low-income earners and the hardcore poor. This is not rocket science, lah.
How much money actually goes directly into the pocket of the rakyat? Zero! That’s the stimulus package that is meant to help the hardest hit – the rakyat, especially those who lose their job.
The cronies who get the main bulk of the money will bring the ringgit overseas, convert to dollars or yens, and continue their luxurious lifestyle there.
[...] Contrario points out that the package does not address unemployment and poverty in Malaysia: The package left out institutional reforms, made no mention in strengthening [...]