The PM had to come up with a more “down-to-earth” strategy to get the largely indifferent populace more concerned about the current debt dilemma.

Prime Minister Datuk Seri Anwar Ibrahim announced last week to slash the development allowance for MPs from RM3.8 million to RM1.3 million.

With that, the total allocation for the development of 222 parliamentary constituencies in the country will now be reduced from RM843.6 million by a whopping RM555 million to just RM288.6 million.

Is RM555 million a huge amount? Not really, as it represents only a meager 0.15% of the total budgetary allocation of RM372.3 billion for 2023 under the previous administration.

And if this amount is to be distributed evenly to all the country’s 33 million population, each will only get less than RM16.70, not even enough for a cup of coffee from Starbucks!

So, does that mean the PM’s development allowance cut is unsubstantial? Of course not. This is because not all the country’s 222 parliamentary constituencies are cash-strapped.

There is massive gap in the level of development of Malaysia’s urban and rural areas. Perhaps the federal government has set aside additional allocations for rural development, but what if we have some unexpected natural disasters or other emergencies when the public are in urgent need of government help, such as during the coronavirus pandemic? RM2.5 million could make a whole lot of difference!

The PM says MPs can still apply for any emergency need and the government will consider additional allocation.

But as the “additional allocation” is very much held in the hands of the ruling party, especially when an election is nigh, this seemingly insignificant amount of money could become the living water in an election!

In view of that, PN chief whip Takiyuddin Hassan has urged PM Anwar Ibrahim to provide fair allocation irrespective of party background.

Why is the PM cutting MPs’ development allocation? Well, he explained that it was to more prudently manage the country’s finances and arrest the continued deterioration of the government’s fiscal position.

But to us, the allocation cut is more of proclaiming to the world that indeed the treasury is facing a grave dilemma than just managing the country’s finances.

This is indeed a very brilliant strategy aimed at arousing public concern over the state of the country’s finances as a consequence of rampant corruption in the previous administration.

On January 17, the PM announced that Malaysia’s public debt was nearing the RM1.5 trillion mark, or about 80% of the country’s GDP. If we fail to service the interest from the loans, the country will become debt-ridden. Indeed we already have!

Back then many Malaysians could not feel the pinch as the astronomical public debt caused by the erroneous policies of the corrupt previous administration appears to have nothing much to do with them.

But, the RM2.5 million cut in constituency development allocation becomes a big deal! Little wonder the PM had to come up with a more “down-to-earth” strategy to get the largely indifferent populace more concerned about the current debt dilemma.

As of end-2022, the country’s international reserves amounted to US$114.6 billion, sufficient to finance 5.2 months of imports of goods and services and 1.0 time of total short-term external debt, which is not really good nor bad.

However, the IMF and World Bank had in late last year warned that the global growth outlook for 2023 was anything but encoiuraging, while the issue of inflation will linger.

Sure enough Malaysia will not be spared, especially with the deep “money sinkhole” left behind by the country’s previous corrupt administrators, not to mention the culture of corruption remains uneradicated while the ringgit exchange rate against the greenback still stays depressed.

In short, Malaysia’s overall economic performance and the country’s future outlook are still very much plagued by uncertainties.

The prime minister will table the 2023 Budget on February 24. A quick recap, the previous administration’s budget tabled late last year amounted to RM372.3 billion.

Theoretically speaking, the PM’s budget is expected to adopt a similar expansionary approach to increase the issuance of government bonds and expand fiscal expenditures in government and public infrastructure development while lowering (or keeping steady) tax rates, aimed at stimulating the overall growth in domestic needs through government input, reducing unemployment and expediting economic recovery.

This means solving our existing problems through continued monetary inputs.

As a matter of fact, running a country is not unlike running a company, with the only difference being their scales.

To successfully run a country or a company, the following attributes are indispensable: cutting unnecessary expenses, boosting revenue (seeking new investments and increasing fiscal expenditure for new investments by upping loans, stepping up corruption-busting efforts, innovation and R&D in core technologies, improved civil service efficiency and grooming the much needed talents.