More questions than answers

By Debra Chong

KUALA LUMPUR, Aug 29 — No doubt about it, it's an expansionary Budget. But for a government that is not strong on execution of policies, it is also a Budget that throws up quite a lot more questions than offer answers.

"I think it's definitely one that attempts to be responsive to what the government sees as concerns arising from March 8," said Tricia Yeoh, the director for the KL-based Centre of Public Policy Studies (CPPS).

"The primary concern is social-economic inequality, which can be seen very clearly. Despite the economic slowdown that we're experiencing now, it needed a decision to choose an expansionary budget. It needed the choice of spending money to stimulate growth, to address the economic slowdown," she added.

Asked if she saw the 2009 Budget as fair or lopsided, she replied: "I would say it's fair for present times, but I'd be very cautious of pumping such a large amount of money into it."

Referring to their formal statement to the media, Yeoh said that the government's operating cost had increased by almost 200 per cent in the past eight years.

"It means a lot of money," she noted. "The question is how come so much is going to operating expenses compared to the allocation for development? The increase in budget seems to go into the operational expenses rather than for development expenses."

"I understand the need to generate growth but the government has not shown a good track record of making sure the money trickles down to the lower-income groups; primarily, due to No 1: corruption; and two: the government has weak institutional structures.

"Due to the weakened institutions, a great amount of funding that has already been put in the budget in previous years, it doesn't seem that the output does not match the input.

"The main question now is whether or not they are channelled in the right way, in institutional structures given that the culture of corruption still abounds.

"My conclusion: There's some fairness in allocation, but again, you have to look at the places where they are lacking. It doesn't talk of urban poverty. It mentions inflation in one line. There's no measures of addressing inflation.

"It's obviously needing to win back the respect and support it lost over the last two years. If you look at the very last part his speech, that specific mention of politics, where he says he hopes there's no underhanded ways to take over, linking the two together, one would say this Budget is a populist measure.

“But you cannot fault the government for this. That's what the government is and sees its role as," she commented, when pressed for her views on the government's real motive.

"In one line, such a large record expansionary budget can only be thoroughly positive given the assurances that this money will be put to good use, without unnecessary abuse, leakages and wastage.

"Unfortunately, the past track record of government has been poor in this respect. With a rampant culture of corruption and weak institutional structures, this may lead to continued wastage and abuse.

“I would therefore emphasise strengthening the institutions of governance, so that the funds are actually optimised and maximised," she concluded.