Political element in Budget 2021, says economist

Targeting an ethnic growth will provide support to the party during the poll, says Gomez

by FARA AISYAH / graphic by MZUKRI MOHAMAD

THERE is a political element involved in the planning of Budget 2021 allocation which focuses more on giving aids to Bumiputera companies, University of Malaya (UM) dean of Economics and Administration Faculty Prof Dr Edmund Terence Gomez said.

He added that it is not the time to target an ethnic group, but help all Malaysian companies.

“Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said 80% of the small and medium enterprises (SMEs) are Chinese and non-Bumiputeras, but much of the budget allocation goes to the remaining 20%.

“In the event of a general election, targeting an ethnic growth will provide support to the party during the poll,” he said at the UM post-budget analysis webinar last week.

He said the government is ignoring the firms which can save the country’s economy amid the Covid-19 pandemic.

Gomez also said this kind of public policy planning — intervention to aid Bumiputeras — has been unsuccessful in the past.

“If we have to turn to the government for intervention because we cannot expect the companies to do so in a lockdown, then there has to be effective coordination.

“Which means, do it properly then the public delivery system will be able to get the help to the ground,” he said.

In the recent Budget 2021 tabling, the government has announced a total of RM11.1 billion for Bumiputera development agenda, RM3.1 billion higher compared to the previous year.

A total of RM4.6 billion will be provided for the purpose of financing Bumiputera SMEs and micro SMEs through Tekun Nasional and Perbadanan Usahawan Nasional Bhd (RM510 million), capacity building programmes by Bank Pembangunan Malaysia Bhd and SME Development Bank Malaysia Bhd (RM800 million), assisting the financing of Bumiputera SMEs through Syarikat Jaminan Pembiayaan Perniagaan (RM2 billion) and for various capacity building programmes, including professional development, Dana Kemakmuran Bumiputera and specific programmes or projects specifically for Bumiputeras (RM1.3 billion).

Finance Ministry Deputy Secretary General of Treasury (Policy) Zakiah Jaafar said the department ensures that it covers all segments of society.

“The majority of our SME owners are non-Bumiputeras and many of the government’s initiatives will benefit them too.

“Our indicators and data also show that non-Bumiputera businesses are the main recipients of these initiatives, hence the need to have additional assistance for the Bumiputera owners,” she said at the webinar.


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Aid for Bumiputera companies has political agenda, economist says