Friday, October 26, 2012

Pm Najib's Sacred Budget 2013

Pm Najib had proudly exerted that no one, inside or outside the country, had criticised his 2013 Budget.

Of course when he made that claim. I had to take his words at face value - his, that is, which isn't much to talk about. To most Malaysians anyway.

Now, as if to mock Najib, UN representative, Mr Kamal Malhotra, in part of the speech delivered to commemorate UN Day 2012 recently, had taken Najib's sacred 2013 Budget to the cleaners, so to speak.

Let me reproduce some of that part of the speech for the enlightenment of readers

Here I would like to say a few words on the implications for Malaysia, especially in light of Budget 2013. While the contribution of its rich natural resource endowment of oil and palm oil and the government linked company (GLC) stimulus for the Economic Transformation Programme (ETP), will ensure respectable GDP growth for Malaysia in 2012, this is unlikely to be sustained in the medium-term or even in 2013, when GDP growth is likely to be more sombre than what the government has projected in its Budget 2013, unless there are early and significant reforms........Given the downgraded economic growth forecasts at the IMF-World Bank Annual meetings in Tokyo earlier this month, Budget 2013 needs greater and renewed critical scrutiny. Sadly, most economists and commentators have so far failed to provide this. When I was asked to comment on Budget 2013 by Bernama last month, I started by saying that this year's budget cannot be viewed on a stand-alone basis. It must be placed in the cumulative context of the last 3 budgets and their probable medium to long-term impact on the future competitiveness of the Malaysian economy. The national political context over this period has, unfortunately, significantly constrained what has been announced in each budget in the last 3 years, and serious structural reform initiatives that the UN in Malaysia feels are necessary have fallen casualty to this....Budget 2013 has also been smaller, as percentage of GDP, since the global economic crisis in 2009 - it has reduced to 24.9% of GDP from 27% of GDP for 2012. Development expenditure has further reduced to less than 20%, while operating expenditure is now about 81% to maintain civil service emoluments and government operations. A smaller development budget means a reduced ability for Malaysia to develop new capacities, new initiatives and new potential. Moreover, the projected deficit is not due to increasing revenue or new fiscal strategies including subsidy reform, but partly because the size of the overall budget is smaller while GDP growth projections are more optimistic than current global and regional economic forecasts suggest...

Click here to read the rest of the speech

You will be surprised. On second thought, I think you won't.

Najib may think that his Budget 2013 is a stroke of genius.

We ordinary Malaysians know better. It is a recipe for disaster.   

NOTE: I came across the reference to the speech at dinmerican           

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