Date of publication: Nov 1, 2013
Section heading: Main Section
Page number: 028
Byline / Author: By Ahmad Ibrahim
THE 2014 Budget was recently unveiled by the prime minister. As usual there were mixed reactions. Some hailed it as a realistic and balanced spending plan. Others raised concerns on its possible negative repercussions on the cost of living.
Some expressed disappointment about the lack of goodies. It is a pity that a post-budget discussion on Astro Awani also failed to capture the bigger agenda of the budget.
If one were to objectively analyse the arguments articulated in the budget, many would surely hail the budget as the most sensible strategy for the country as we negotiate the nation's many challenges in the coming years.
The Academy of Sciences Malaysia has always championed the strategy to prepare for the future. Under our Mega Science studies we look as far ahead as 2050.
Through horizon scanning and other techniques of forecasting, we propose future scenarios for the country's economic sectors. We would then evaluate their future risks and opportunities. And more important how science, technology and innovation (STI) can mitigate the risks and capture the opportunities.
The analysis is then presented to the government as policy advice. So far we have completed phase one of the key sectors including water, energy, health, agriculture and biodiversity. We are now studying five other sectors including infrastructure, housing, environment, transport and the electronic and electric sectors. By early next year, we should have some recommendations for the government.
Essentially, the 2014 Budget has all the elements to secure a sustainable future for the nation. Sustainable implies positive economic outcome while ensuring inclusiveness, equity and continued safeguard of the environment and its attendant natural ecosystem.
This is in fact very much in line with the UN's proposed sustainability development goals (SDGs) post-2015. For one the Budget continues to address the fiscal need to reduce the deficit and eventually balance the budget. This is all about balancing income and expenditure.
The planned introduction of GST which has been keenly debated in post-budget discussion is expected to enhance the country's taxation income. Claims that GST will be burdensome is unfounded.
But the general public has to be properly briefed in order not to create the wrong perception. At the same time, the promised reduction in corporate and personal income tax will provide further boost to consumer spending and eventually the retail economy.
The continuing rationalisation of fuel subsidy is another positive step towards sustainability. Through such exercise, the pursuit of energy efficiency will no doubt be given more urgency. Furthermore, the phasing out of the subsidy will motivate the country's readiness to adopt renewable alternatives such as solar and biomass. This is again a boost for sustainability.
The allocation of RM600 million for research universities should be viewed as an investment to carve out future sources of wealth for the country. However, the R&D topics should be properly researched and strategised. So are the budget incentives given for industry research in propelling the bioeconomy.
The actual execution of such R&D however has to be given serious rethink. Over the years, a major issue on research has to do with the fact that very little get commercialised. This does not augur well for the hefty investment in R&D allocated over the years.
One suggestion is to identify specific key industries within the bioeconomy that the country aims to build and lead. And then align the research with industry development.
For example, one possible industry has to do with the growing demand for halal vaccines and medicines. The formulation of the appropriate industry blueprint will help identify the right R&D topics to support the growth of that industry.
This way, as demonstrated in the case of palm oil, a higher percentage of the research will be commercialised or transfered to the market.
There is no denying the fact that the 2014 Budget has a bigger agenda for the country. It is to do with the longer term aspiration of achieving sustainable growth for the economy.
Such aspiration fits in better with the New Economic Model that the government has championed all this time. Properly executed, the budget is a positive step to prepare the nation for a sustainable future.