The 12th Malaysia Plan (12MP) is exceptionally important and challenging given the circumstances of the Covid-19 pandemic, which has limited government fiscal space and curtailed its fiscal sustainability.
Former second finance minister Datuk Seri Johari Ghani said with government debt now at RM958 billion (61.2% of GDP) – including debt guaranteed by the government amounting to RM300 billion consisting of bonds issued by Danainfra and Prasarana – and other off-budget Government commitments, it is uncertain how the government can finance hundreds of billion in development expenditure for the next five years without having to raise the statutory debt limit every year.
“The government must be transparent with the practice of off-budget spending via debt guarantee to avoid total government’s debt and liability ballooning to unsustainable level which will further reduce the government’s already deteriorating fiscal position,” he said in a statement.
Johari said any spending on infrastructure projects that involve commitment guaranteed by the government must only involve projects that will bring benefit to the rakyat in terms of providing employment and boosting economic growth in the next five years.
“All unplanned projects outside the 12MP should not be considered if it is not necessary,” he added.
Johari said the government must learn from the pandemic and look into increasing capacity of public healthcare as Covid-19 has exposed the inadequacy and limitations of the country’s healthcare system to face major pandemics.
“According to World Bank data, Malaysia’s government healthcare expenditure lags behind the average of 3.8% GDP among upper-middle income countries with Malaysia only spending 2% of its GDP on public healthcare.”
He said the Covid-19 pandemic has also revealed the vulnerability of our country’s food security position. If other countries stopped their exports of staple food products like rice, flour, sugar, and corn while others imported food commodities to safeguard their own domestic supply, this would leave an importer like Malaysia at risk of food shortage.
“With import of food bill reaching RM55.5 billion last year and increasing almost every year, the government must plan to increase our self-sufficiency and reduce reliance on imports. This requires a well planned strategy to be executed by the relevant ministry involved in food security.
“Among other things that can be considered is reverse investment in other countries that are growing our imported food overseas, to protect the source of our food supply,” Johari added.
In the 12MP, he said, the government must consider farming or production of food a necessity by adopting high technology systems, engineering precision and sustainable concepts. The government must allocate enough resources to initiate this strategy at the beginning so that the private sector can participate in this initiative to create our own sustainable food security ecosystem.
“12MP must not be just about physical infrastructure projects but also securing Malaysia’s future post-pandemic era,” Johari said.
He pointed out that the government is presenting the 12MP one year late due to the emergency and suspension of parliamentary sitting which led to the 2021 Budget being announced before the 12MP.
“I hope 12MP will provide a clear direction for the government to formulate the upcoming 2022 Budget as this is important to boost investor’s confidence which has been waning for the past couple of years, as evident by FDI inflow to our country that has been trailing regional economies like Indonesia and Vietnam.
“MPs must be given enough time to debate and discuss the 12MP in the parliament as this is an important strategy to be adopted by the country in the next five years. In fact this is more important than the budget as our budget annually will have to follow whatever strategy that has been put forward in this 12MP,” he said.
Source : NSTP