KUALA LUMPUR, Malaysia - Opposition leader Anwar Ibrahim on Tuesday slammed a widening deficit in the government's 2009 budget that sparked concerns over Malaysia's economic health and vowed to unveil a more responsible budget if he topples the ruling coalition this month.
Anwar, who was re-elected to Parliament last week, said his plans to seize power from the National Front coalition through parliamentary defections by Sept. 16 remains on track.
He said he has held talks with ruling party lawmakers and the response was "very good" but declined to elaborate.
"If we can form a government within this short period, then a new (2009) budget will be introduced," Anwar told reporters. "We are not proceeding with this irresponsible expansionary budget."
Prime Minister Abdullah Ahmad Badawi on Friday unveiled a record 208 billion ringgit ($62 billion) budget for 2009, with wide-ranging aid for the poor and higher development spending amid sharply higher inflation.
The fiscal deficit is forecast to balloon to 4.8 percent of gross domestic product this year and 3.6 percent in 2009, from 3.2 percent in 2007.
Anwar said the 4.8 percent deficit was untenable as there were little measures in the budget to boost the country's productivity and economic competitiveness.
International credit rating company Standards and Poor's recently downgraded Malaysia's credit rating outlook to the fourth lowest investment grade, which indicates government mismanagement and excesses, he said.
Anwar said the opposition's budget will focus on wooing foreign investment by dismantling a 37-year-old affirmative action policy which gives privileges in contracts, jobs, business and education to ethnic Malays.
The New Economic Policy has been abused to enrich a few well-connected Malay elite and worsened corruption in the government, he said.
"Archaic" policies that demand mandatory Malay equity in companies will be removed and open tenders called for all government contracts, currently reserved mostly for Malay companies, he said.
However, he promised affirmative action programs will be retained to help the poor irrespective of their race.
"Affirmative action policies must continue to help the poor and the marginalized," he said. "It will be transparent. It will not be done at the expense of the economy. The Malays will not lose (out), the country will win."
The New Economic Policy was started in 1971 to help Malays, who form 60 percent of Malaysia's 27 million people, after 1969 violent race riots. But foreign investors and minority groups long complained it amounted to protectionism. The policy has been a stumbling block to Malaysia's plan for a free trade pact with the U.S.
Anwar also pledged to roll back multi-billion-dollar projects proposed by Abdullah's government to cut the budget deficit. He promised to cut business taxes and lower fuel prices.
"I suspect Abdullah feels his days are numbered so he spends as much as possible because he knows the next government will have to deal with the deficit," he added.
Anwar's People's Alliance coalition increased its strength from 19 to 82 parliamentary seats in the 222-member house in March elections, and needs 30 more to form a government. If Anwar succeeds, he will lead the first opposition-led government in Malaysia, which has been ruled continuously by the National Front since independence in 1957.
EILEEN NG
Forbes
03/09/08
PEOPLE'S POWER
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