Oct 27, 2009

Budget and Corruption

Budget and Corruption
Woo..Budget! But than there is Corruption! Lets see how the Budget relates to Corruption as the common denominator here would be about Money.

There has been quite a few requests for me to express my views of the Budget 2010 and I was telling them that I am feeling lazy after watching the Budget presentation last Friday and that is how I felt after the budget speech and if you still don’t get my drift, it’s that the budget made me lethargic and that’s my view of the Budget 2010.

Yeah, there were some minor improvements and there were still inadequacies that are yet to be implemented, what was proposed on the incentives for tax reliefs and such are nothing much on an overview and all proposals must be viewed from the top so as to get a broadview or overview of the total objectives.

A government budget other than being a planned approach to the revenues and expenditure of the nation will also reflect the political and economic strategies and to address the existing problems and concerns of the government.

This budget rings hollow from ear to ear and other than the Public Relation’s input in the budget speech it lacks details. “1Malaysia, Together We Prosper” that is the slogan of the budget speech and I am already getting an overdose of this entire PR sloganeering.

Someone ask me what are the significance of this budget and that is a good question, first as I can see is that our economy is in contraction as from year 2008 when our Gross Domestic Product (at constant 2000 prices) was at Ringgit 528.3 billion and 2009 at Ringgit 512.4 billion and projected for 2010 at Ringgit 525.4 billion ringgit which is still lower than the 2008 figures. I would have preferred statistic based on GDP at nominal values but was unable to access the department of statistic website up till time of writing.

One annoying matter in Malaysia is the delay in the publication of statistics as when we are now already into the last quarter of the year but our figures are still at 2nd quarters when other nations have already announced their 3rd quarters performance, we probably have to wait until December before they give us the 3rd quarters statistics. How to be a developed nation with all this delay and inefficiency?

Back to the significance of this budget is that we are still in deficit and will be projecting a deficit of RM 40.5 billion adding up to the national debt which will come to about RM 430 billion bringing it close to 60% of the GDP at nominal values which is estimated at approximately RM720 billion and is not looking too healthy as the threshold for a nation like ours is about 50% of GDP. (This will affect the country’s rating.).

Throughout the history of the entire nation, Malaysia was able to record a surplus Budget from 1993 to 1997, isn’t that the time when Anwar Ibrahim was the Finance Minister? But the deficits kind of escalated and ran through the roof from 1998 onwards after Anwar was sacked.

Another significant change is the big drop in revenue by about 8.4% from RM162.1 billion in 2009 to RM 148.4 billion in 2010 and the government responded by cutting the operating expenditure by 13.7% from RM 160.17 billion in 2009 to RM 138.28 in 2010. This huge cut of about RM22 billion from the operating expenditure is quite drastic and the question arises in whether they are able to achieve this as it does not show how they went about just slashing off this figures.

Another thing noticeably annoying in this budget is the grouping of figures presented in this budget, like the revised economic forecast of (negative) – 4% to -5% negative growth for year 2009 and the forecast for 2010 to be from +2 to +3% growth. Governments are suppose to generate greater accuracy and are a reflection of their basis and methodology in their logics towards the economy and they are being lethargic or lazy by just grouping up the figures in this approach.

Strategies or Slogans?
As presented by the Prime Minister; “1Malaysia, Together We Prosper” Budget focuses on three strategies, namely:

First: Driving the Nation towards High-Income Economy
Second: Ensuring Holistic and Sustainable Development
Third: Focusing on Well Being of the Rakyat

How? The budget speech does not impress on the strategic approach other than by just saying so. No details provided, I see no strategic plan but just words. What and how are we to prosper together? How are you to double the per capita income in 10 years and what are your plans?

Some Points to Note (or to be Alarmed):

• The Private Sector was once the driver of economic growth with investments contributing to 30% of GDP, and has declined significantly to below 10% of GDP. Total Domestic Direct Investment slumped from RM 72 billion in 1997 to RM 56 billion in 2008.

“A business friendly environment requires uninterrupted electricity supply to ensure smooth business operations.” says the Prime Minister who is also the Finance Minister. And so? Billions of ringgit will be thrown in to generate more electricity and includes Hydro Electric Project in Ulu Jelai, Pahang and Hulu Trengganu. And Sabah will also increase electricity generation.
Looks like our economy is in a Boom and we will require more power for all the new industries coming to Malaysia. And All this while I thought we had excess supplies from all the Independent Power Producers generating an over capacity.

• A Second Wave of Piratisation oops I mean Privatization of government companies and agencies to allow these companies to operate more efficiently and expand their activities and to reduce financial dependence on the government. And who are the lucky few who will benefit and get to be bosses of these multi billion ringgit companies.

1Malaysia Development Berhad (1MDB)??? Wow! This is fast! How did I miss this? Another government sovereign wealth fund? How many sovereign funds do we have today? Anyway this 1MDB had already invested USD 1 billion in collaboration with a company from Saudi Arabia in a high impact project. Don’t ask me where and why? As I don’t know, just heard this for the first time in the budget presentation.

RM 30 billion allocation for primary and secondary education. This is huge! Better get into the education business fast and furious.

• Planned projects of the five development corridors are in according to schedule and todate, 126 out of 195 projects are in various stage of implementation. Planned investments totaling RM 221 billion have exceeded the 9 Malaysia Plan target of RM 145 billion.

And on ways in “Preventing Crime” the government will be making an allocation of RM 3.7 billion to increase the efficiency of the security force, including providing modern and sophisticated equipment. And adds that: “The government is serious in reducing the crime rate and will implement crime prevention measures. The government targets to reduce the crime index by 5%, including reducing street crimes, such as snatch thefts and robberies by 20% by end 2010. A total of RM 1 billion will be provided to further improve the services of the Royal Malaysian Police (PDRM) in 2010.”
Just wondering where and how they get the 5% and 20% figures from and why not wipe out crime completely and reduce to the barest minimum? There is only one method they know and that is to throw money.. they are outdated and i find them always at a loss as to the causes of crime, as if you don't know the cause you will never be able to find the antidote.

The biggest laugh I had in the presentation was the part to “Combat Corruption” as how the heck do you combat corruption by enhancing the image of the Malaysian Anti Corruption Commission (MACC) and promoting better Public Relations? This PR thing is really overdone! Maybe the Prime Minister is very happy with their PR consultants and now we see PR in every corner.Let me give you guys a reminder for free.. No amount of PR can hide the Truth!

There are no short cuts to fight corruption and it has to be done through a system of complete autonomy of the Anti Corruption Commission from the government, it must be a fully transparent and independent institution free from the influence and control from politics and politicians.

All this budget strategies are only eyewash and propaganda if the will to fight corruption is not intact and falls on pretense. We could allocate and spend hundreds and thousands of billions but with the system we have in place there will be massive leakages of the Rakyat’s money through corruption and we will always fall short of our objective and the end result will be great defeat in the global economic race of nations and the people of our country deprived of the opportunity which otherwise would have been present and readily available.

As it is today we are already falling behind and lesser nations are fast catching up on us and if nothing short of an iron will to fight off graft or corruption, we will be dropping ranks further, it is not only about economic growth, it is all about clean and efficient holistic growth which can only be achieved when corruption is completely ridden off or kept to the very minimum.

Corruption is a crime worst than murder! It is worst than murder as corruption can create horrendous hardship to the common man and even lead to death as is so evidently obvious. Corruption robs the nation and its people of the wealth which otherwise would have been available.

Corruption kills by the thousands as governments pay for the construction of roads and highway and in returns gets lower quality and a lesser road, as in paying for four lanes of highways but getting two lanes instead and that because of this two lanes of road which increases the rate of accidents that kills which otherwise if there are the four lanes equivalent as being paid for, the traffic accident rates will have been much lower and fatality very much reduced. When there is corruption, as an example; the vehicles inspection unit of the Road Transport Department, because of certain payments (corruptions) the trucks or buses which otherwise is not road worthy gets to be on the road and while travelling that truck or bus gave way to inadequate maintenance or faulty mechanicals which was certified as being road worthy than rams into other private vehicles and caused deaths which is so commonly seen.

Due to corruption the monies are drained off which otherwise could have been available to improve on public safety and transportation and in doing so the government controls and restrict old vehicles and for the old vehicles to be properly maintained and inspected for road worthiness certification of which is not a necessity in this country and you will find very old and run down vehicles plying our roads and highways that are not road worthy and not properly maintained and such vehicles so often causes accidents with a high degree of fatality, and all this were evident in the recent “Raya Holidays” where we had record breaking traffic accidents and deaths on the road and these figures are ever increasing from year to year and our authorities seems at a loss as to the causes and blames it on drivers and speed limits. And this is not addressed in this budget.

Corruption Kills! And they can cause pain and hardship greater than any natural calamities and disasters as they kill on a constant basis, day in and day out.

And how do we stop this KILLER called corruption? The will to do so starts with the government of the day and I would doubt that this can happen with this present government who have developed a “silo mentality” and can only see from within their party politics that is narrow and closed in and their only concerned is their political climb to the top leadership or to be associated to the leadership and that is why you will only see the same old worn out faces hogging the political limelight and it would be these same old politicians that will shout their propagandist antics that will irritate, annoy and trouble the people and nation. And so I foresee the collapse of the corrupt regime which can only happen as proven throughout history and that is their fall brought about through the will of the people.

“Corruption is an all encompassing Evil because it is the common tool of all Evil activities” 
- Syed Hussein Alatas -

Read the Full Budget Speech HERE
Read Losses of RM28 billion a year through corruption in the Star HERE and other stories HERE and HERE


Starmandala said...

An impressive summary. I particularly enjoyed your closing sentence, Hawkeye.

Unknown said...

Thanks Antares..
The governance of our country is very troubling as billions of ringgit are lost every year while the government tap off any available liquidity (money) in the market.

People are dying from all this corruption and there is much evil.