Amidst the noise and clamour of Malaysia’s political landscape, it is often easy to forget that daily responsibilities and tasks of administering continue. The Pakatan Rakyat coalition has especially suffered several recent shocks, namely the twin by-election losses of Galas and Batu Sapi, followed by the damage control Parti Keadilan Rakyat has had to deal with as a result of Zaid Ibrahim’s decision to quit the Deputy Presidency race. These events have occupied both media space and public focus.

Whilst it is necessary to examine Pakatan’s political resilience, it is perhaps more important to examine the ways in which Pakatan state governments are running their states respectively, a more appropriate reflection of Pakatan’s philosophies translated into reality. For example, both Penang and Selangor state assemblies tabled their respective 2011 budgets recently, which the public should be paying more careful attention to. As two states that contribute significantly to the nation’s wealth and economic development, it is in the interest of all stakeholders (including the Barisan Nasional Federal Government) to ensure these states are properly run and managed in order to continue attracting domestic and foreign investment. A crucial aspect of this lies in the form of financial management of the state’s resources. Some common themes can be easily identified between the two state budgets, as highlighted in this article.

First, both state governments seem confident in working towards more efficient financial management tactics, and eventually shoring up better state reserves in the mid to long term. Penang tabled a 2011 budget of RM897.36 million, a 25.7% increase compared with its 2010 budget of RM713.79 million. Out of this, 38% contributes to operating expenditure (RM343.1 million) and 62% to development expenditure (RM554.26 million). Selangor tabled a 2011 budget of RM1.43 billion, a 3.4% reduction from the 2010 budget of RM1.49 billion. Out of this, 58% contributes to operating expenditure (RM860 million) and 42% to development expenditure (RM600 million).

Penang tabled a deficit budget of 12% for the year ahead, whilst Selangor tabled a balanced budget. Selangor’s Opposition Leader was nevertheless keen to criticise Selangor for its RM65 million budget deficit in 2009 during the recent budget debates. The reason given for a deficit budget in Penang was mainly due to its allocations for social welfare programmes for targeted groups like the senior citizens, hardcore poor, schools and religious programmes. However, the Chief Minister said that the deficit was funded by state reserves, and that he was confident that the balance in the reserved funds would increase by the end of 2010 through cost-cutting measures and an increase in revenue. Selangor’s response was similar, with its Menteri Besar stating that state revenues had exceeded its original estimates, and that with better revenue collection methodologies, state revenues and reserves would increase in the following year.

Penang would have been especially proud of its mention in Transparency International’s and the 2010 Auditor-General’s reports of its efforts at transparency and financially efficient measures, the latter that specifically mentioned it had recorded an increase in its accumulated fund of RM75 million in 2009 compared to 2008. It also registered a 1.4% increase in state revenue. On Selangor, a newspaper report mistakenly quoted from the same AG’s report that RM977.7 million was apparently missing from its state accounts, when in fact only RM206 million remained to be adjusted. The full amount was in fact accumulated over a period of seven years. Furthermore, close to 90% of Selangor’s debts of RM829 million (loan taken from the Federal Government) were incurred when the previous administration made the decision to privatise its water services industry, a move the current government is attempting to reverse. Clearly a deep financial mess was left behind in Selangor, which impacts upon present accounts. The 2011 budget speech nevertheless shows how an array of measures have been taken and will continue, in increasing state revenue further – mainly via collection of quit rent arrears through the land and district offices. Selangor has also successfully collected its RM390 million debts owed by the Talam Corporation and used part of this to start its micro-credit scheme for small-time entrepreneurs and the poor.

Second, both states have highlighted the need for a specific roadmap and blueprint that will outline the vision of the Pakatan Rakyat government, of what each wants to achieve, and how to get there. These are both mentioned in the respective leaders’ speeches: the Penang Blueprint, which is being prepared by its state think-tank, the Socio-Economic and Environmental Research Institute (SERI) and expected to be unveiled soon; and the Agenda Rakyat Selangor (Selangor People’s Agenda), prepared by the state’s Economic Planning Unit and the Menteri Besar’s Office, to be launched in January 2011. Although the documents are not yet published, the budget speech gives a good indication as to the contents of such a roadmap, all the more necessary since there is such a high expectation for leadership of the Pakatan Rakyat presently. Although methodologies may differ, suffice to say that both roadmap documents would be a result of extensive consultation with various stakeholders and representatives within business, civil society, residents, and community leaders.

In promoting the states’ economies, similar industries are pinpointed at aiding growth. Both Penang and Selangor for example focus on policies aimed at clean, green, sustainable and liveable environments for its citizens as both recognise that any economic growth and development will require comfortable urban living which would in turn attract investment. Specifically, attention has been given in both budgets to the following areas: industrial sector, tourism, infrastructure and utilities, agriculture and livestock, trade and consumer affairs, education, the environment, job creation, liveable cities, public transport, cleanliness and safety, urban renewal, rural development, and selected land reform measures. State governments have jurisdiction over natural resources, hence the need to ensure these are carefully managed. Of course the states are very different in makeup; population sizes, needs and expectations, existing infrastructure and proposition points vary, but the direction towards sustainable living is a positive one.

This list may seem like a hodge-podge of issues, throwing in everything and anything possible into a state budget speech – especially when state governments today have limited purview over major policies, due to the increasing centralisation of powers concentrated within the Federal Government over the years. However, the states’ interest on many of these issues is necessary and in fact, shows leadership in attempting to tackle some of the more difficult problems faced by the people. For example, handling crime or public transport is not necessarily the responsibility of a state government but because people consider these priority areas, both Penang and Selangor have taken the initiative to outline what they think is the way forward; the end-goal in mind. Some of these may also involve working closely with the Performance and Management Unit (PEMANDU) under the Prime Minister’s Department, and despite justified criticism of its ostentatious budget, some bi-partisanship will be needed on the count of economic development.

Prevalent within both documents is also the emphasis on principles of good governance, transparency and accountability. The theme of “competency, accountability and transparency” continues to make its presence known, cutting across all layers of administration. Both state governments have taken bold strides towards the Freedom of Information Enactment, started open tenders for new contracts, and stressed on the rule of law. Selangor has initiated the Integrity Pact for some of its state companies such as Kumpulan Semesta Sdn. Bhd. and Perbadanan Kemajuan Negeri Selangor (PKNS). These were announced in the budget speeches, and expected to be stressed upon within the blueprints.

Finally, both state governments have a strong focus on social welfare programmes. Pre-election manifestos leading up to March 2008 of all Pakatan Rakyat parties contained demands for better social safety nets for those in need and marginalised groups, and this the state governments have lived up to. It must be remembered that social justice was a clarion call of the parties, especially that of the PAS Islamic Party. As such, both states have policies aimed at assisting the following groups, introduced at the start of their administration and continuing: the elderly, Chinese and Tamil language schools, the disabled, religious schools, mosques and religious teachers. Selangor has some additional welfare benefits for victims of domestic abuse, estate workers’ children, a fund for all children born in the state, and its policy of free water for the first 20m3 used per household. State governments are in an awkward position as they do not have authority in determining broad economic policy, but more will be expected of the Pakatan states in determining an economic model quite distinctively different from the Barisan style of mega-projects, and beyond financial hand-outs which is what state governments are restricted to at present.

It is positive to note that both Selangor and Penang, the most developed of the Pakatan state governments in Malaysia, have common goals and ideals in attracting investment, and making their states liveable and sustainable. More could certainly be done in collaboration with the other, including Kedah and Kelantan, creating an economic and investment corridor amongst Pakatan states, which would surely be a positive showcase that in Malaysia’s development, there are alternatives to pumping RM5 billion into a 100-storey tower.

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