The federal government budget has traditionally been one of the less accessible aspects of national policy, typically discussed only in the last quarter of the year and then quickly set aside.
As we approach the end of the year and reflect on the 2024 budget, it is important to consider the budget’s significant domestic impact on Malaysians.
Equally crucial is assessing how the Madani administration has utilised the 2024 budget as a tool for foreign policy, especially as it prepares for the Asean chairmanship next year.
The 2024 budget tabled by prime minister and finance minister Anwar Ibrahim called for a total allocation of RM393.8 billion, with RM303.8 billion for operating expenditure and the remaining RM90 billion for development expenditure.
The budget was aimed at tackling pressing economic challenges such as increased cost-of-living and wage stagnation, while promoting sustainable growth and fiscal discipline.
As Malaysia recovers from the economic fallout of the Covid-19 pandemic and the associated lockdowns, the government has focused on job creation and economic resilience.
The 2024 budget also emphasised strategic infrastructure investments to enhance regional connectivity. Projects like the Shah Alam LRT line and East Coast Rail Link will solidify Malaysia’s role as a regional transport hub.
The KL20 Initiative aims to position Kuala Lumpur among the world’s top startup ecosystems by 2030.
This initiative is not about reducing reliance on foreign investment; rather, it emphasises attracting external talent through initiatives like the Innovation Pass and the KL20 GPU Scheme, which aim to transform Kuala Lumpur into a smart city.
These efforts are bolstering investor confidence and strengthening the ringgit, setting the foundation for a transformative economic environment in Malaysia and enhancing Asean’s recovery by embracing digital nomads.
Additionally, the budget called for investments in data centres and green industries, such as solar energy and electric vehicle (EV) manufacturing, demonstrating Malaysia’s commitment to sustainability and reinforcing its credibility within Asean.
As Malaysia prepares for chairmanship of Asean, the budget prioritises regional cooperation and strengthening ties with key partners.
Anwar has highlighted the importance of collaborating with the European Union (EU) and other regional groups to foster trade, investment, and digital transformation.
Malaysia has also positioned itself as a leading advocate for regional trade through the Regional Comprehensive Economic Partnership (RCEP), the world’s largest trade bloc which includes major economies like China, South Korea, and Japan.
This emphasis on economic reform and empowerment positions Malaysia as a leader among developing nations. By promoting inclusivity and sustainability, Malaysia aims to drive regional growth and contribute to a resilient and prosperous Asean community.
The 2025 budget will build on these efforts, focusing on economic integration, digital innovation, and sustainable development. The government’s commitment to these goals is expected to enhance Malaysia’s influence and contribute to the overall stability and prosperity of the Asean region.
Addressing domestic economic challenges is not enough. The 2025 budget must also establish a foundation for successful regional economic integration. With a strategic focus on economic reform and regional cooperation, Malaysia is poised to play a pivotal role in shaping the future of the Asean community. - FMT
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