Barisan Alternatif will not be presenting a shadow budget this year, said an economist who presented last year's alternative budget for the opposition coalition.

Economist Prof Jomo K Sundram of Universiti Malaya said that there is little point for BA in offering an alternative budget as long as it continues to have limited access to the "heavily biased media".

"If not for the media, the people would have known that BA offered a more pro-rakyat reflationary budget for 2000 last year.

"The shadow budget last year opposed the ill-conceived, potentially disastrous and self-serving government measures to merge financial institutions and stock brokerages," explained Jomo.

Last year, BA accepted a deficit budget to reflate the economy after the disaster in 1998.

Predicting the 2001 budget to be a surplus budget, Jomo said that due to the petrol price increase and the deprivation of Terengganu people of their just share in petrol royalty, the federal government should be able to reduce its expected deficit in 2001.

"Cutting the petroleum royalty to Terengganu has created many dangerous precedents. People all over the world will see the federal government as one which cannot be counted upon to honour its contracts and recklessly politicises both the budgetary process and the federal system.

"Everyone abroad, regardless of political preference, seems to know that Barisan Nasional feels confident that the judiciary can be counted upon to deliver judgments in its favour, thus further undermining international confidence in rule of law in this country," said Jomo.

Jomo said that while Terengganu has the second highest gross domestic product (GDP) per capita, due to oil, it also has the third highest poverty rate, after Sabah and Kelantan.

"Without any evidence of abuse of such funds by the PAS government, everyone knows what the action is all about, so much so that even the usual government apologists have felt obliged to remain silent on the matter," said Jomo.

Privatising public assets

Jomo also cautioned the public so as not to be confused by such windfall budgetary gains which would have been achieved earlier by privatising public assets.

"Such balanced budgets are not sustainable in the long term. The government has shown little inclination to become much more efficient and not to minimise abuses of public monies," said Jomo.

Prime Minister Dr Mahathir Mohamad had said that the budget for 2001 will be a "people's budget, despite the slight surplus due to the petrol price increase".

Malaysians are also advised to be concerned about the sources of future growth as the formula for growth is still unclear.

"The stock market has been clearly in the doldrums notwithstanding the pre-budget rally (last) week. Since the mergers (such as bank mergers) are likely to proceed, there is likely to be staff shedding and prospects in the medium term remain worrying" said Jomo.

"Much new foreign direct investment involves acquisitions despite the prime minister's fire-sale rhetoric to the contrary. MAS (Malaysia Airlines System) and the ports are up for grabs, but while helping out the cronies, it is not clear that this is formula for growth."

On whether there are any indications for the layman that the economy has improved, Jomo said: "Of course, the economy has improved and will continue to do so in the short term as existing capacity is more fully utilised, but one should be concerned where the future growth is going to come from in the medium to long term.

"The middle class tends to (wrongly) focus on the stock market as a barometer of the economy and policy makers will probably try to appease them by further measures to reverse the earlier decline.

"However, one should remember the relationship between the stock market indices and the real economy is rather complex and tenuous," said Jomo.