A prominent economist says Budget 2015 was crafted to make everyone happy, but falls short on addressing structural economic issues.
FMT
KUALA LUMPUR: Economist Ramon Navaratnam believes Prime Minister Najib Tun Razak tries too hard to give Malaysia a people-friendly budget and does it at the expense of addressing key structural economic issues.
Navaratnam, a former Deputy Secretary-General of the Ministry of Finance, said in an interview with FMT that Budget 2015′s emphasis on Malay and Bumiputera policies, in particular, was no longer necessary now that Malaysia was moving towards developed nation status.
“The budget is racially based,” he said. “Why do we need race-based policies anymore? We’ve passed that stage.
“That is the weakness of the budget. We shouldn’t keep thinking along racial lines anymore. It slows down progress.”
Navaratnam sees “too many political gimmicks” in the budget. “Politics shouldn’t have any role to play in the economy,” he said.
Explaining his opposition to race-based policies, he said the trouble was that they were too often and too widely abused, leading to wastage.
“The worst Bumiputera contractors are getting the job, which is why despite our spending on infrastructure, there’s very little return,” he added.
“These policies limit opportunities,” he said and he blamed them for capital flight out of the country.
Navaratnam also said he was discouraged that the budget took the easy way of ensuring the government’s popularity, handing out grants to the people without addressing structural issues for the longer term.
“This is definitely a people’s budget,” he said. “Every demographic is given something, although some not necessarily as significant as others.
“This does not build capacity, but consumption orientated indulgence. Does the BR1M grant generate income?”
Referring to Najib’s budget speech, he said the Prime Minister should have highlighted economic reports and the real macroeconomic outlook, providing specific figures on capital outflows, brain drain and other key structural problems that the nation faces.
He said he doubted that the government would achieve its target of reducing the national deficit by 3.5%, adding that he foresaw Najib tabling proposals for supplementary budgets in the months to come.
KUALA LUMPUR: Economist Ramon Navaratnam believes Prime Minister Najib Tun Razak tries too hard to give Malaysia a people-friendly budget and does it at the expense of addressing key structural economic issues.
Navaratnam, a former Deputy Secretary-General of the Ministry of Finance, said in an interview with FMT that Budget 2015′s emphasis on Malay and Bumiputera policies, in particular, was no longer necessary now that Malaysia was moving towards developed nation status.
“The budget is racially based,” he said. “Why do we need race-based policies anymore? We’ve passed that stage.
“That is the weakness of the budget. We shouldn’t keep thinking along racial lines anymore. It slows down progress.”
Navaratnam sees “too many political gimmicks” in the budget. “Politics shouldn’t have any role to play in the economy,” he said.
Explaining his opposition to race-based policies, he said the trouble was that they were too often and too widely abused, leading to wastage.
“The worst Bumiputera contractors are getting the job, which is why despite our spending on infrastructure, there’s very little return,” he added.
“These policies limit opportunities,” he said and he blamed them for capital flight out of the country.
Navaratnam also said he was discouraged that the budget took the easy way of ensuring the government’s popularity, handing out grants to the people without addressing structural issues for the longer term.
“This is definitely a people’s budget,” he said. “Every demographic is given something, although some not necessarily as significant as others.
“This does not build capacity, but consumption orientated indulgence. Does the BR1M grant generate income?”
Referring to Najib’s budget speech, he said the Prime Minister should have highlighted economic reports and the real macroeconomic outlook, providing specific figures on capital outflows, brain drain and other key structural problems that the nation faces.
He said he doubted that the government would achieve its target of reducing the national deficit by 3.5%, adding that he foresaw Najib tabling proposals for supplementary budgets in the months to come.
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