ASEAN KEY DESTINATIONS
Malaysia steps up spending
Prime Minister Najib Razak on Friday unveiled a record 212 billion ringgit ($69 billion) of spending in the budget, up nearly 3 percent over 2010, as he sought to kick-start plans to turn Malaysia into a developed nation by 2020.
The government raised its economic growth forecast this year to 7 percent from 5-6 percent but expects growth to ease to 5-6 percent in 2011 amid global economic uncertainties.
To spur private investment, Najib said the government will step up partnerships with the private sector in infrastructure and invest in projects including a 40 billion ringgit ($13 billion) mass rail transit network for its largest city Kuala Lumpur and a 100-storey tower - the highest in Malaysia.
"I present a budget that lays the foundation for Malaysia to become an advanced nation. The 2011 Budget is formulated with firm determination to bring significant changes to the nation's development and the well-being of the people," he said.
The projects are part of a new 10-year blueprint, dubbed the Economic Transformation Program, that aims to make Malaysia a high-income nation. The government has said it will need to lure $444 billion of investments but some analysts have warned the plans are unrealistic.
Najib said private investment in 2010 is expected to total 86 billion ringgit ($28 billion).
The 2011 budget envisages a 7 percent rise in operating expenditure to about 163 billion ringgit ($53 billion) while development spending - which includes poverty reduction programs, educational training, health care and housing - will fall by 9 percent to 49 billion ringgit ($16 billion).
Opposition politician Tony Pua criticized the government for fiscal indiscipline. He said the government promised to trim its operating spending in 2010 but instead it increased by 10 percent.
The government has overshot spending annually since 2000, he said. He also slammed the government for raising its operating spending, rather than focusing on development spending.
To promote Malaysia as a shopping haven in Asia, Najib said import duties up to 30 percent on some 300 goods ranging from handbags and shoes to curtains and perfumes will be abolished from next year.
Najib also handed out goodies to civil servants, giving them a 500 ringgit ($162 million) special allowance. He said toll charges on the major North-South Highway will be frozen for the next five years. First-time homeowners will get a 50 percent discount on stamp duties for houses below 350,000 ringgit ($113,636).
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