Navaratnam: Budget must protect against declining world economy

By Pauline Wong, The Sun

PETALING JAYA (Oct 9, 2011): While the 2012 Budget is full of goodies obviously intended to prepare for the next General Election, it must also protect the Malaysian economy against the declining global economy.

Centre for Public Policy Studies chairman Tan Sri Dr Ramon Navaratnam (pix) said it was a “goodie budget” aimed at the lower income group.

“That is right and proper, but the budget should also look into longer term measures to defend the resilience of the Malaysian economy,” he told theSun.

Prime Minister Datuk Seri Najib Abdul Razak in tabling the budget, provided optimistic figures as to the expected growth of the economy, with per capita income expected to increase to RM28,725 in 2011 compared to RM26,175 in 2010, said Navaratnam.

The premier also estimated economic growth to remain strong in face of world economic slowdown, with growth of 55 to 5.5% in 2011.

However, Navaratnam cautioned that the Prime Minister cannot take Malaysia’s financial strength for granted.

“Najib must ensure that he maintains fiscal and financial discipline to withstand the global decline, because if the economy continues its downward slide, the figures may change.

“Revenue must be increased, and the goods and services tax must be considered after the Elections. Expenditure must also be cut in non-priority sectors, for while it is beautiful to build castles, we cannot ignore the poor or afford to give less priority to the lower income bracket,” he said.

The prominent economist and former Transparency International Malaysia president also said he would have liked to have seen more allocations made to strengthen government institutions.

“For example, more funds to the Malaysian Anti Corruption Commission to counter corruption, which had an adverse effect on the economy; or more allocations to strengthen the judiciary to build investor confidence.

“The budget needs to also focus not only on expenditure but must be concerned with the benefits thereof,” he urged.

He called on Najib to further liberalise the budget to increase meritocracy, competition, and productivity so that the ensuing output would be enhanced to counter growing inflationary pressures.