Pre-budget commentary (2020)

Dr. Rafiq Idris an Economist and Senior Lecturer from the Financial Economics Program, in the Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah (UMS). He is also the Chairman of Sabah Economic and Education Society.
KOTA KINABALU: The 2020 budget is being planned in an uncertain global environment when the world economy is slowing down and trade war is happening between the world major economies.

According to Dr Rafiq Idris an Economist, Senior Lecturer from Financial Economics Program, Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah (UMS) this is a challenging environment for the government, when the government at the same time aimed to reduce national debt.

“In this regard, I would like to emphasize that when the economy is slow, it is not a good idea to spend less because it can just make the economy to move even slower,” he said.

According to him, the 2020’s budget which will be tabled by the Minister of Finance, just like the previous budget announcement, it is hoped that the government will touch on these major areas; increase the number of affordable housing, increase allocation for health and education, expenditure which will stimulate the GDP growth immediately and huge specific allocation for Sabah.

He said first of all, increase the number of low and medium cost housing in Malaysia. To complement the existing housing programs which he believes more allocations are needed so that more Malaysians can own a house.

“Besides B40, M40 group also should not be neglected. There are still many people which falls under M40 group, still do not own a house. Secondly, it is hoped that the allocation for education and health sector to be increased.”

He said the education and health sectors are among important sectors in the services sector which contribute to the economy and the wellbeing of Malaysians. The allocation for this should not be compromised.

“Thirdly, it is hoped that the budget will be an immediate growth stimulating budget. It should stimulate the GDP growth starting the first half of 2020. If the money is being allocated and spent in the first half of 2020, only then it has the potential to give impact for 2020,” he said adding that it is hoped that the money will not come only in the third or fourth quarter of the year.

For Sabah specifically, it is hoped that the incentives for down streaming activities (in whatever form) be introduced. This can be a factor that can further stimulate the state’s economy in the long run, he said.

According to him, the contribution of manufacturing sector towards Sabah’s GDP is less than 10 percent of the state’s GDP. Incentive for manufacturing sector should be created and diversified.

“Furthermore, specific allocation for the improvement of water and electricity supply in the state is necessary. This is important for the well-being of the people and business community. Stable supply of water and electricity are also crucial in attracting foreign direct investment into Sabah.”

He expressed his hopes that there will specific allocation on this to solve the ongoing water supply problem.

“Moreover, projects under national corridor programs should be continued. I hope projects such as Pan Borneo Highway project and Port Transhipment Hub in Sepanggar among others will be continued. Apart from that, I hope there is also specific budget to enhance cross border trade activities.”

He hoped that  in the context of Sabah-Kalimantan cross border trade, there will
be an allocation to build a road which will link Sabah and Kalimantan.

“It can be in Serudung- Simanggaris area or other spots which are suitable. In this regard, I hope proper complex for customs, immigration and quarantines together with other necessary infrastructure and offices will be made ready in strategic locations so that cross border trade processes can be facilitated and economic activities in border areas can be stimulated.”

“In satisfying the needs and wants of Malaysians, I believe the government is striving in showing a prudent and discipline financial management and budgeting for something that within its affordability,” he stressed.

“We hope the budget is the one of which it is a relief for all Malaysians, inclusive, balance and growth stimulating spending. I hope the idea to further reduce imbalance development between states/regions in Malaysia will be translated in the upcoming budget.”-pr/BNN