Manage national debt well and use it productively – economists

 

The country’s debt is not a problem but it should be managed well by using the debt productively such as by making strategic investments, said Emir Research president Rais Hussin.

He said debt management is important and looking at the “tightening of budget initiatives”, the government should focus on what the people need and want.

“Many countries that have large and small deficits such as Japan and Singapore but the debts they take are used for productive purposes that bring multiple returns,” he said during Bernama TV’s “Malaysia Madani: Budget 2023” programme today.

He said that an Emir Research study has shown that more than 95 percent of people need the cost of living to be reduced, employment opportunities, efforts to deal with the health crisis and housing.

Meanwhile, economic adviser to the prime minister Rajah Rasiah said the implementation of targeted subsidies will take time, and he thinks that Budget 2023 presented by Prime Minister Anwar Ibrahim will not take everything (subsidies) into account because the period is too short.

“Of the seven things emphasised by the prime minister, only two things that I see as crucial and they are the debt of more than 60 percent of the gross domestic product (GDP) as well as the problems faced by the hardcore poor.

Emir Research president Rais Hussin

“These groups are targeted to be helped, like Menu Rahmah’s efforts, it is not just a slogan, it is more than that because the prime minister hopes that the poor families do not live in hunger and at least this problem is overcome,” he said.

Economic analyst Ahmed Razman Abdul Latiff from Putra Business School said detailed data is important and is needed to enable the government to channel targeted subsidies accurately.

“Budget 2023 may have targeted subsidies for certain items but may not be implemented immediately. This is because if we have targeted subsidy data, it can be implemented more accurately and with impact.

“We should start with the data and also the monitoring infrastructure, this is important, I know it will take time and I hope it can be implemented this year,” he said.

In addition, Rais hopes that Budget 2023 is planned using the input, output and impact model (IOI).

“Our budget only uses the input and output of the model, which means that if we get the budget, we spend it before December 31, speed to spend, not considering the outcome or impact.

“The budget has to be planned from the beginning, use the IOI model and we monitor after that, don’t rush to spend money,” he said.

Rais also said the government could also consider or rethink the need to implement the Mass Rapid Transit 3 (MRT3) and Digital Nasional Bhd’s (DNB) 5G projects.

“The cost of the MRT3 is about RM50 billion, do we need to build MRT3 now? For this DNB project, can we think again about how to reduce its cost and slash costs to users?

“These are the things that we need to think out of the box. Anwar’s administration has not yet reached 100 days, it is going to be challenging, we cannot expect to be radically different but we have to address the leakages,” Rais said.

He noted that 24 years ago, the International Monetary Fund and the World Bank stated that Malaysia lost RM3 trillion due to leakages and corruption.

“Looking at the national debt borne by the government today, imagine if we had that RM3 trillion. Therefore, radical transparency is important and good governance is critical,” Rais stressed.

- Bernama