KUALA LUMPUR: Malaysia's opposition said on Tuesday it would cut the country's budget deficit if it won power, but beyond plans to eliminate corruption and end expensive projects its leader Anwar Ibrahim provided few concrete measures.
The deficit will surge to 4.8 percent of gross domestic product this year, the government said on Friday. It also said the gap should fall to 3.6 percent of GDP next year, but analysts greeted the forecast with scepticism, pointing to slowing domestic demand, lower prices of Malaysia's commodity exports, planned tax cuts and higher spending.
Those numbers are far higher than neighbouring Thailand, which projects a deficit of 1.75 percent of GDP this year and fellow commodity exporter Indonesia which sees a deficit of 1.8 percent.
Anwar's Pakatan Rakyat alliance says it can form the next government in mid-September with the aid of 30 defectors from the ruling coalition, something that political analysts say is doubtful.
"An alternative budget, we would be able to introduce, God willing in the next few months ... would automatically register a smaller deficit than 4.8 percent today," Anwar told a news conference.
Anwar, who was finance minister for eight years until he was sacked in 1998, declined to set a firm target but said he had moved from a deficit to a surplus when he had been in office.
His immediate plans for raising revenue include opening government tenders which he said would raise 4-5 billion ringgit.
While that measure would help cut corruption, which Anwar charges has grown in the 10 years he has been out of office, it pales in comparison with the 197.21 billion ringgit ($57.96 billion) of spending planned by the government this year.
Anwar said he would also abandon a national high speed broadband project worth 11.3 billion ringgit.
At the same time, however, he offered to reintroduce petrol subsidies, which consumed a third of all spending before the were cut this year. In its current form the measure is still expected to cost 21 billion ringgit.
And just like the government he wants to topple, Anwar promised to cut taxes.
"The lower the tax, the better, higher productivity," Anwar said.
Asked whether he would repeg the ringgit currency, Anwar said it would leave the issue to lawmakers in his party even though he backed a free float regime for the currency in a recent interview with Reuters.
Malaysia's widening fiscal deficits have started to worry ratings agencies, although they said on Monday there was no immediate risk of a credit downgrade due to the country's sizeable current account surplus and high savings rate.
Nonetheless, the prospect of political uncertainty and rising economic populism in a stand-off between Anwar's alliance and the ruling Barisan Nasional coalition.
The ringgithit a year low of 3.4235 per dollar on Tuesday, prompting the central bank to intervene in the currency market.
Reuters
The deficit will surge to 4.8 percent of gross domestic product this year, the government said on Friday. It also said the gap should fall to 3.6 percent of GDP next year, but analysts greeted the forecast with scepticism, pointing to slowing domestic demand, lower prices of Malaysia's commodity exports, planned tax cuts and higher spending.
Those numbers are far higher than neighbouring Thailand, which projects a deficit of 1.75 percent of GDP this year and fellow commodity exporter Indonesia which sees a deficit of 1.8 percent.
Anwar's Pakatan Rakyat alliance says it can form the next government in mid-September with the aid of 30 defectors from the ruling coalition, something that political analysts say is doubtful.
"An alternative budget, we would be able to introduce, God willing in the next few months ... would automatically register a smaller deficit than 4.8 percent today," Anwar told a news conference.
Anwar, who was finance minister for eight years until he was sacked in 1998, declined to set a firm target but said he had moved from a deficit to a surplus when he had been in office.
His immediate plans for raising revenue include opening government tenders which he said would raise 4-5 billion ringgit.
While that measure would help cut corruption, which Anwar charges has grown in the 10 years he has been out of office, it pales in comparison with the 197.21 billion ringgit ($57.96 billion) of spending planned by the government this year.
Anwar said he would also abandon a national high speed broadband project worth 11.3 billion ringgit.
At the same time, however, he offered to reintroduce petrol subsidies, which consumed a third of all spending before the were cut this year. In its current form the measure is still expected to cost 21 billion ringgit.
And just like the government he wants to topple, Anwar promised to cut taxes.
"The lower the tax, the better, higher productivity," Anwar said.
Asked whether he would repeg the ringgit currency, Anwar said it would leave the issue to lawmakers in his party even though he backed a free float regime for the currency in a recent interview with Reuters.
Malaysia's widening fiscal deficits have started to worry ratings agencies, although they said on Monday there was no immediate risk of a credit downgrade due to the country's sizeable current account surplus and high savings rate.
Nonetheless, the prospect of political uncertainty and rising economic populism in a stand-off between Anwar's alliance and the ruling Barisan Nasional coalition.
The ringgit
Reuters
02/09/08
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