The need for economic literacy

On Budget Day last Friday, Member of Parliament for Bachok, Syahrir Sulaiman called the budget as limping or "tempang" in Malay. It can be misconstrued to also mean handicap, but its him expressing concern on the moderate growth that generate limited fiscal leeway for development. 

Yesterday, Opposition Leader, Hamzah Zainuddin created controversy with Perikatan Nasional counter offer for cash-aid of RM6,000 annually without restrictions and more free education programs. He raised other pertinent issues on the RM50.8 billion development expenditure by GLC and GLIC, lower Petronas dividend of RM20 billion, and somewhat in-sync with government concern on taxation, national revenue, etc. However, it is the cash-aid remark that attracted attention and suspected to be intended to viral. 

The math does not add up and criticised as populist rhetoric. Spending on STR and SARA for 2025 is RM15 billion and for 2026 budget is RM15 billion. Hamzah's plan means allocating  RM51.6 billion for the 8.6 million recipients!

Populist rhetoric

Naturally, it is not the job of the opposition to praise the Budget but highlight its weakness. The problem is his proposals is outwardly political rhetoric meant to displace substantive economic debate This sort of polity is not uniquely Malaysia and quite common malaise in developed democracies. 

If one has been following Trump and his economic argument for his tariff policies, one realise such populist promise, which lack substance, but fulfill voters' psychological appeal is happening in the biggest economy in the world and advance democrasy.    

It is obvious to spot the emotional appeal, easy to communicate and policy contrast for short-term voters approval. Despite structural fiscal deficit, one could hear such populist pledges in political campaigns in Indonesia and Philippines. 

Since GE12, with Anwar in top form as Opposition leader and remember the Buku Jingga, responsible pledges becoming increasingly uncommon at general elections. Same heard in US and UK of "cut taxes" and "make it free" slogans than serious and realistic fiscal trade-off more in-sync with economics of balancing scarcity. 

Economic literacy 

There is weak economic literacy among the public. When electorate lacks strong economic understanding, there’s little incentive for politicians to elevate the debate. Complex topics like fiscal sustainability, monetary-fiscal coordination, or subsidy rationalisation are hard to sell. 

For politicians, they can get away with illogical claims because voters can’t easily scrutinise them. Perhaps, due to their insufficient academic background or different professional exposure, the politicians themselves are not theoretically conversant.  

Malaysia’s case is symptomatic of this — few MPs, journalists, or voters discuss, for instance, what opportunity costs or long-term inflationary risks mean in budget promises.

Technocrats and economists used to play a more visible role in shaping policy debates. The influence of expert seemed to have declined. 

Over time, media logic noticeably favours conflict over analysis. The mainstream media peddles news as per the narrative by MOF to highlight "goodies for rakyat" than educating readers on the economics. Perhaps over analysis leads to some form of mental or attention paralysis. 

There will be MPs with some expertise expressing their views. One fine example was Shahar Abdullah, Government Back Bencher Chairman and former Deputy Minister of Finance. On Monday he raised the problem of only 54% Malaysian has life insurance and suggested the establishment of National Health and Social Insurance to provide complementary healthcare funds.

However, party whips tend to discourage independent expert MPs. Public debate becomes performative rather than deliberative.

Raising economic understanding 

Unlike knowledge of law or other public policy, economic policies has direct impact on the population's life and livelihood. Our politicians, policymakers, professionals, activists, and citizens need to be economically literate. 

There is a need to integrate economic reasoning and public policy education in secondary and tertiary curricula. The media should be encouraged to get into partnerships with economists and experts to explain fiscal issues to the public in plain language. 

At the same time, raise public familiarity with economic jargons. NGOs or think tanks could conduct public budget briefings to demystify policy rather than current forum format to make it simple but not raise public understanding of economics.  .

There must be political awareness to encourage more economists, public policy experts, or former civil servants to contest for MPs or at least involve to advise MPs to bridge the gap between political messaging and economic reality and promote meritocratic and technocratic representation .

Local media must evolve from practically verbatim "reporting what politicians said" to "interrogate what politicians claim." Media must make it their responsibility to automatically fact-checks or do budget claim verifications. Do data journalism segments during budget week.

There is little room for development expenditure with surplus of revenue over operating expenses is expected to be merely RM4.5 billion. With Petronas dividend down to only RM20 billion on the back of uncertain global economic condition, how will government allocate RM81 billion development expenditure without raising further the already RM1.4 trillion debt? 

Questions such as this should have been asked. The general public, not just professional and business people, need be made to aware why government cannot spend the way it used to and why the economy and present policies cannot duplicate the good old day of their political idols. 

Fiscal oversight  

For better fact checking, there need to be more collaborative with Bank Negara, DOSM, or universities for quick-response analysis.

In Malaysia, the fiscal oversight is left for politicians, government internal operation, media and independent observers. Its not good enough  and need to be institutionalised by an independent and credible body. 

Countries like the UK and Australia have independent budget offices that cost and evaluate political proposals.

Malaysia could strengthen its Parliamentary Budget Office to provide non-partisan fiscal analysis. Media could do comparative impact assessments of both government and opposition plans for public to debate. This curbs unrealistic claims such as RM6,000 cash aid by requiring transparency on costings.   

Malaysia’s problem is becoming more acute. The fiscal space is narrowing and the time for easy promises is over. The three years of fiscal caution need to be translated into a long term planning. More so with the expected turmoil from the shift from unipolar world order to multipolarity.  

Yet, political fragmentation creates incentives for populism. Without serious debate, the public is left uninformed but eagerly expecting something to happen. This will make fiscal reform politically harder and balancing act ever more delicate.

A mature democracy does not eliminate political rhetoric, but increased economic literacy  counterbalances it with strong institutions, informed voters, and credible media. Its not about silencing  politicians, but to make irresponsible economics electorally costly.

Have we not learned from GE13 an 14?