However, the 2002 budget has been brought forward by a week this Friday (19th October) as the Prime Minister, Datuk Seri Dr. Mahathir Mohamad, who is also the Finance Minister, will be going overseas to attend the Asia-Pacific Economic Co-operation (APEC) Summit in Shanghai after presenting the budget to Parliament.
Instead of bringing the 2002 budget forward by a week, next year’s budget should have been put off by two weeks to the first Friday of next month on November 2, 2001, so that there is more time for the government to revise it after getting a better gauge of the impact of the September 11 terrorist attacks in New York and Washington and the US airstrikes in Afghanistan as the 2002 budget, its figures and forecasts, have largely been rendered obsolete as they were mostly compiled and prepared before the attacks.
Mahathir should seriously consider postponing his 2002 Budget presentation by two weeks, especially with the latest news that the American economy may be in a recession after the United States Federal Reserves reported yesterday that industrial production in the United States fell for a 12th straight month in September, its longest losing streak since World War Two.
Separate reports also out yesterday showed the largest monthly drop ever in a widely-watched measure of housing activity and consumers cautiously returning to chain stores.
The Federal Reserves said overall output of the nation's factories, utilities and mines fell 1.0 percent in September, the biggest monthly drop since June. The last time there had been a similar unbroken series of declines came in a string that extended from November 1944 to October 1945.
Factory output alone, which makes up the largest portion of industrial production, fell 1.1 percent, its 11th decline in the past 12 months.
These are bad news for Malaysia as the United States is the country’s largest trading partner.
The magnitude and duration of the United States economic slowdown had been haunting the Malaysian economy since the sharp slowdown in United States economic activity in mid-2000, and hopes that there would be an early US economic recovery from the last quarter of last year had been dashed by a protracted and severe economic slowdown and most recently the September 11 terrorist attacks.
A preliminary United Nations estimate put the staggering damage of the September 11 terrorist attacks to the world economy as exceeding US350 billion or causing the fall of one full percentage point of the global world economic growth!
American policy makers are unclear as to the extent of the economic damage caused by the attacks or whether the tens of billions of dollars appropriated by lawmakers on Capitol Hill since the attacks can forestall a recession.
As the government has announced a post-attacks RM4.3 billion economic stimulus on Sept. 25, six months after the first economic stimulus package of RM3 billion, the government should take full advantage of a two-week deferment of the 2002 budget presentation to get a better gauge of the impact of the September 11 terrorist attacks and the US airstrikes in Afghanistan on the Malaysian economy by revising the figures and forecasts largely compiled before the attacks.
When announcing the RM4.3 billion economic stimulus on Sept. 25, Mahathir also revised downwards the expected economic growth this year to be around 1 percent to 2 percent, considerably lower than previous official forecasts of 7 per cent last October and the 5-6 percent in March.
But even the third estimate of GDP growth of 1-2 per cent for this year was based on pre-attacks statistics, and it will be most unsatisfactory for the same forecast to be used unaltered on Friday’s 2002 budget presentation!
There will be another advantage from a two-week postponement of the 2002 budget presentation - to give time for the government to make public the K-economy masterplan to be followed by a national debate.
The government first announced the drafting of a K-economy master plan for Malaysia to make the transition from a P-economy (production-economy) to a K-economy (knowledge-economy) in the 2000 Budget in Parliament on October 29, 1999 although it had started work on it a full year earlier.
The country was promised that the K-economy masterplan would be completed
by the end of 2000 and that it would be used as input into the formulation
of the 2001 budget, the Eighth Malaysia Plan and the Third Outline Perspective
The 2001 Budget, the Eighth Malaysia Plan and the Third Outline Perspective Plan have all come and gone, with the last two approved by Parliament in April this year, but the K-economy masterplan has still not seen the light of day!
The Prime Minister Datuk Seri Dr. Mahathir Mohamad had himself announced in February this year that the K-Economy Master Plan would be the "Strategic Initiative One" to reinvent Malaysian society to grasp the opportunities of the Information Age, that it would be "for the entire nation and for every citizen" and would not be drafted by the best brains behind closed doors because it must be relevant to Malaysians and become a personal master plan for all.
He promised that the formulation of the K-economy Master Plan would "not be an elitist process but one involving everyone from the teacher to his pupil, to his fisherman father, to the mechanic, to the secretary, janitor and the chairman of the board" and that there would be a 18-month “process of national consultation, brainstorming, drafting and national mobilisation” for the K-economy Master Plan.
For the last two years, the K-economy Master Plan has remained a national mystery as the promise of a 18-month “process of national consultation, brainstorming, drafting and national mobilisation" for its formulation promised by the Prime Minister had not taken place at all.
DAP had right from the beginning supported the government for
the drafting of a national K-economy master plan to create a knowledge-driven
economy, but we had publicly expressed our reservations that there could
be an effective or successful K-economy masterplan without
Malaysia first developing a K-Government and a K-Parliament, which
has now been
vindicated by events.
Other countries take just a matter of months to complete the process of formulating a K-economy masterplan involving the public in every stage of the process but Malaysia could not produce a K-economy masterplan after more than two years of birth pangs - despite Malaysia being a Johnny-come-lately in this field.
As one calender year is equated with five Internet years, this means that Malaysia had lost over ten Internet years to formulate a K-economy Masterplan, which tantamounts to a national cyber-crime in dragging down the national aspirations for Malaysia to take the quantum leap to join the ranks of the IT superpowers in the world.
The Malaysian K-economy Master Plan could not be still-born after ten Internet years. It should be made public if it has been completed and a two-week postponement of the 2002 Budget will at least allow some time for public debate and input on a master plan which is to secure Malaysia’s prosperity and competitiveness in the international marketplace in the 21st century.