Malaysia promises more reforms in coming years in review of 11MP

• Malaysia’s new government will move towards devolution of power in the coming years, by providing more autonomy to the 13 states, and independence to authoritative agencies.
• The moves are part of the promises of reforms by the five-month-old Pakatan Harapan government.
• In a midterm review of the 11th Malaysia Plan, the government provided details of how the administration would proceed in the latter half of its five-year economic blueprint that spans from 2016 to 2020.
• In his speech in Parliament when presenting the midterm review, Prime Minister Mahathir Mohamad said his government is targeting annual economic growth of 4.5%-5.5% between 2018 and 2020.
• This is slightly lower than the 5%-6% annual target for between 2016 and 2020 as laid out by the previous Najib Razak administration.
• Private consumption will continue to be a major source of growth and is expected to expand at an annual average rate of 7%, with the share to GDP reaching 56.9% in 2020.
• Malaysia’s budget deficit, which Najib had said would be balanced in two years, is estimated by the new government to widen to 3% of GDP.
• A total of MYR427.9bn was expended for operating expenditure during the review period. This was lower than the initial budget of MYR430bn due to the decline in oil-related revenue.
• The development expenditure ceiling will be rationalised from the original allocation of MYR260bn to MYR220bn for the overall 11MP period of 2016-2020 to consolidate the fiscal position.
• The new government’s fiscal and governance reforms starting mid-2018 will have an impact on economic growth but is anticipated to be short-lived and manageable.
• Meanwhile, the report, in promising to instil trust in agencies like the police, graft busters, national audit agency, election commission, judiciary, attorney-general’s chambers, and towards civil servants, outlines the separation of powers, diminishing overlaps that had enabled the government of the day to dictate agency appointments.
• There are plans to limit the term for the Prime Minister, chief minister and menteri besar to two terms in a bid to curb possible power abuse and corruption.
• The 13 state governments “will be empowered to run their administrations by decentralising some functions including public transport, social services, agriculture development and environmental protection”, the report said. These functions are generally now controlled by the federal government.
• For underdeveloped states – namely Sabah, Sarawak, Kelantan, Terengganu, Kedah and Perlis – the government promised “priority in the distribution of development allocation to promote more balanced socioeconomic development”.
• As part of reforming the civil service, the government is looking at improving efficiency by eliminating overlaps, reducing bureaucracy and speeding up delivery.

External Link: https://www.straitstimes.com/asia/se-asia/malaysian-govt-promises-more-reforms-in-coming-years-in-review-of-5-year-economic-plan

External Link: http://www.theedgemarkets.com/article/highlights-midterm-review-11th-malaysia-plan