MACROECONOMY

the positive global economic scenario and the outlook of major economies, such as the United States, the Euro area, United Kingdom, and China. Our neighbouring economies are doing reasonably well, too.

It is equally good to note that the commendable economic growth rate is also accompanied by low inflation, current account surplus, and low unemployment level as well as sustained performance in the stock market and continued stability in few other areas of concern, such as the banking system.

Having said these, it must also be mentioned that this achievement may possibly come with implications, too. Our ringgit may strengthen and imports may then rise, perhaps in the very short term.

The economy will also benefit further from the support of the national budget revealed by the prime minister last month.

Despite this notable performance of the macroeconomy of the country, one also sees that there are quarters who doubt these numbers, saying that the growth is not widely felt by the society. In other words that there are several pockets of the economy, community included, do not feel the gain from the strong growth of the first three quarters of this year.

If this is true, then the transmission mechanism from our macroeconomy to the microeconomy (firms, households, workers and business outlets) of the country can be weak. The benefits of economic prosperity could have largely gravitated around a few sectors, such as construction, mainly, owners of capital, and high-income sections of the society. Again, if this is the case, the growth benefit has not filtered down much to a larger section of the community. This point has to be investigated for more details.

The government must surely have sensed this matter given the thrust of 2018 Budget, which aims to extend the reach of its benefit to many sections of the society.

This is understandable, given that much of the inequity in the society finds its source in the production structures of the economy, in the market practices, and in the lower shares of the incomes accruing to the lowest 40 per cent or the B40 group.

It, therefore, makes sense that the budget provides allocations for incentives for farmers and the fishermen, for special financial assistance (BRIM), for civil servants, for training and education and for small businesses.

The budget, however it is perceived as, has therefore tried to reach all groups while at the same time trying to maintain fiscal prudence and macroeconomic stability. The latter objectives are quite, arguably, well on target, such as in controlling the budget deficit.

Moving forward, in this age of post-truth, where perception often counts, the planning priorities now have to be directed towards greater social equity, and towards greater broad-based development.

This is to ensure that the benefits of macroeconomic achievements and growth, reach the lower sections of the society, preferably not wholly through subsidies and handouts, but importantly, through skill formation, greater productivity, greater social mobility, productive self-employment, wider spread of entrepreneurship, especially among the Bumiputera and Indian communities, and the other low-income segments of the population.

Understandably, these are medium- and long-term matters, which have to be dealt with through long-term plans and strategies. The annual budget, an annual plan, is not a sufficient instrument to tackle these issues.

Now that we are talking about TN50, digital economy and ageing society, sustainability, among others, hopefully the planning apparatus of the country, the Economic Planning Unit especially, is beginning to crank their numbers, forecasts and projections, to prepare the nation for the Post 2020 era, and the coming decades when TN50 becomes the core ingredient of future long-term policy debates.