PETALING JAYA: The decision to postpone and cancel development projects to focus on subsidies is impractical, says Datuk Seri Najib Razak.
Acknowledging that subsidies would provide relief to the people, the former prime minister, however, stressed that such measures could not generate new income, encourage investments or create more job opportunities.
Najib said cancelling projects had been Pakatan Harapan’s method and it was proven to adversely impact and hinder economic growth.
"The way to help the people in a time when world inflation is high is not only by giving subsidies to control the prices but also by raising the people's salaries, building the people's wealth through the stock market and creating opportunities for businesses.
"Abolishing or cancelling projects is Pakatan’s way and it has been proven to stunt economic growth," he said.
Najib said the national debt could be controlled if the rate of economic growth was faster than the rate of debt increase and debt service payments.
Therefore, he said projects that led to greater economic returns or did not directly utilise the government’s funds should continue.
He cited Public-Private Partnerships and Private Finance Initiatives (PFI) as examples.
Najib said government projects, especially those of significant size, require a long time to initiate and execute.
"So, when we cancel or postpone such projects it will take longer for the government to revive them, if necessary, to boost the economy when we face a recession. By then it will be too late for us to act.
"What is the point if the price of goods is controlled but the country's economy declines," he asked.
Najib said the government needed to be proactive in solving problems in the future and not just react based on the current situation.
"Don't be short-sighted or the country will fall into a state of stagflation (where inflation is still high while the economy declines) and we will regret it," he said.
Economic Affairs Minister Datuk Seri Mustapa Mohamed earlier announced that the government was taking measures to save public expenditure by postponing or not continuing projects that have yet to commence.
Mustafa said the measures were to enable money to be channelled for the welfare of the people, apart from efforts to ensure the country’s economic recovery.
