KOTA KINABALU: The 2022 budget is being planned in an uncertain global and domestic economic environment when the world economy is slowing down and world is being hit by CoVID-19.
This is a very challenging situation for the government, when many sectors are badly affected. 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. The challenge is there, there is a fiscal pressure due to lower tax revenue, but I believe revenue collection will be greater next year due to potential opening of international border and economic sectors.
With regard to the 2022’s budget which will be tabled soon, I would like to share my
budget ‘wishes’. Just like the previous budget announcement, it is hoped that the government will touch on these major areas; increase or no budget cut on allocation for health and education and huge specific allocation for Sabah.
Firstly, it is hoped that the allocation for education and health sector to be increased and
there should be no budget cut on this. Education and health sector are among important sectors in the services sector which contribute to the economy and the wellbeing of Malaysians.
Allocation for universities should not be cut, especially for Sabah. The allocation for this should not be compromised.
Secondly, specific allocation for basic infrastructure such as the improvement of water
and electricity supply and the enhancement of digital infrastructure in the state are extremely important.
This is important for the wellbeing of the people and business community. Stable supply of water and electricity are also crucial in attracting domestic and foreign direct investment into Sabah.
I hope there will be specific allocation on this to solve the ongoing water supply problem as well as road connectivity that cause logistical issues.
I hope projects such as Pan Borneo Highway project, Port Transhipment Hub in Sepanggar and road connectivity in Serudong-Siamnggaris among others will be among the top priority.
Plan to have complex for customs, immigration and quarantines together with other necessary infrastructure and offices can be kicked off in strategic locations so that cross border trade processes can be facilitated and economic activities in border areas can be stimulated in years to come.
Big allocation for all or part of those mentioned mentioned here is indeed in line with the spirit expressed by YAB prime Minister called Keluarga Malaysia and Twelve Malaysia Plan (RMK-12).
Moreover, additional budget, is also needed for effort to minimize the risk of flood and
other calamities. Development is a need, but quality planning and implementation are also very important.
What is the point of having development projects, when at the same time it creates adverse effects to the environment, create irrigation, economic and social wellbeing issue?
Climate change and other issues such as drainage must be also become a priority. In addition, for Sabah specifically, it is hoped that there will be specific incentives for
down streaming activities (in whatever forms) be introduced.
This can be a factor that can further stimulate the state’s economy in the long run. The contribution of manufacturing sector towards Sabah’s GDP is less than 10 percent.
Incentive for manufacturing sector should be created and diversified. One of the many things that can be done is to give incentive to big companies in Peninsula Malaysia such as public listed companies to invest in Sabah, to relocate their manufacturing plant or to have new factories in Sabah.
If this can happen, it will help in reducing the income gap between states in Malaysia. Sabah needs more down streaming activities for higher GDP and job creation.
Better production capacity and readiness of manufacturing sector are important and would bring big opportunities especially when the Indonesian capital city relocation to East Kalimantan takes place.
Other than those mentioned above, other general budget in the form of assistance that
involve all Malaysians such as concerning gig economy, creative industry, tourism sector, B-40 group, senior citizens, disabled people, micro and small enterprises among others must be continued and further improved. Many has been affected badly by the Covid-19 pandemic.
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.
I 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.- Dr Rafiq Idris
Dr Rafiq Idris is an Economist, Senior Lecturer from Financial Economics Program, Faculty ofBusiness, Economics and Accountancy, Universiti Malaysia Sabah, an Associate Fellow at the Ungku Aziz Centre for Development Studies.
