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Taxes and budget 2016: On the road to a developed country

Faris Hadad-Zervos's picture
This article first appeared in The Edge Malaysia Weekly

MALAYSIA has travelled far on the road to economic growth and shared prosperity. Using its natural resources, the country not only eliminated absolute poverty from 49% in 1970 to less than 1% in 2014, but also lifted the incomes of households at the bottom 40% of the income bracket. The Gini Coefficient — a measure of income inequality in an economy — dropped from 55.7 to 42.1 over the same period, implying that gaps in incomes were narrowing. This road is now leading towards a developed country, with a vibrant and growing middle class where aspirational households have access to relevant education and training, higher income opportunities, more savings for retirement and a safety net to protect the vulnerable from shocks.

Underlying this journey to developed country status is a series of structural reforms that have formed the bulk of the national development plans, most recently the 11th Malaysia Plan. The quest moving forward is therefore to sustain and finance this process. The 11th Malaysia Plan is budgeted to cost RM246 million between now and 2020. Taxation choices will matter a great deal for Malaysia’s prospects in this journey, more so in an environment of low or volatile oil and commodity prices and a global and regional economic slowdown.

I want my children to go to this kind of school

Nugroho Nurdikiawan Sunjoyo's picture
Parents and community members are more willing to support a school from having full knowledge about the school's resources.

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Years and years ago, when I was still in school, the interaction my parents had with the school was only during report card day, and perhaps the odd times I got into trouble. That was it. Although my son is only a year and a half old, I’ve been on the lookout for a school and I would rather not have him study at the type of school I went to.

Imagine a new Indonesia: Spending to improve development

Wolfgang Fengler's picture

Imagine how the new Indonesia would prosper if everyone had affordable health insurance, every child completed secondary education and highways were in place connecting Indonesia’s three biggest cities: Jakarta, Surabaya and Medan.