Hastening Malaysia’s economic recovery

EARLIER this month, US President Joe Biden signed a historic US$1 trillion (RM4.2 trillion) infrastructure bill into law. The package will put US$550 billion into transportation, broadband and utilities.

This includes US$110 billion into roads, bridges and other major projects, US$66 billion in freight and passenger rail as well as US$39 billion into public transit systems.

Describing the move as a “once-in-a-generation investment”, Biden said the law will create more than a million new jobs and further modernise the country’s infrastructure. It is also set to reinvigorate the economic giant after a prolonged period of coronavirus-induced slump.

The US is practising the tried-and-tested Keynesian policy to jump-start its economy. Under this principle, the more spending that takes place in an economy, the more the economy will grow due to the multiplier effect.

When the US government splurges on infrastructure projects, companies need to hire workers to get the job done. More people will be employed or enjoy higher wages and they, in turn, will spend more, creating even more jobs and downstream economic activities that lead to an expansionary economy.

The Malaysian government can take a leaf from the Biden administration’s stimulus package to revive our economy, which has also been badly hit by Covid-19. The last time we heard of mega projects was during the Najib Razak administration and among them were the mass rapid transit, Forest City in Johor and the proposed KL-Singapore high-speed rail (HSR). Our two immediate past prime ministers did not embark on any projects of such scale.

It is time Prime Minister Ismail Sabri Yaakob consider undertaking mega projects, not just to stamp his mark in the country, but to help stimulate the economy. One low-lying fruit would be the HSR, which was shelved in January this year.

For one, the HSR was already a work-in-progress. Reviving it is much easier than starting something from scratch. Former prime ministers Najib and Muhyiddin Yassin recently called on the HSR to be revived. The latter had said that if Singapore was not keen, the line could connect Johor Baru and Kuala Lumpur first, with the possibility of extending to Thailand eventually.

The immediate benefits of this HSR is obvious. It helps to stimulate the economy and can bring tremendous spillover effects, including jobs creation and downstream economic activities.

Trains are also arguably cheaper, more environmentally friendly and democratic when it comes to giving opportunities to get people, along with business, goods as well as development moving.

Our Asean neighbours – whose economies have been just as badly impacted by Covid-19 – have no qualms about HSR.

Vietnam is planning two routes, with speeds of up to 350km per hour, from Hanoi to Vinh (to its south) and from Ho Chi Minh City to Nha Trang (to its northeast). These two lines – at a total track of 651km – will be operational earliest by 2030 with a cost of US$24.3 billion. Including upgrading works for existing routes, Vietnam will spend up to US$28.82 trillion by 2030 on rail.

Thailand, on the other hand, is constructing a 250.8km HSR between Bangkok and Nakhon Ratchasima (also to its northeast) costing 179.4 billion baht (RM22.47 billion).

Vietnam and Thailand have no qualms about spending such astronomical sums because they understand the long-term benefits HSR will bring. Do we? Are we prepared to allow neighbouring countries a head start in its post-pandemic recovery while we keep dragging our feet on our own HSR project?

We cannot keep dilly-dallying on this project and lose the opportunity to reap the immense benefit the HSR has to offer.

It’s time for the government to be decisive on this. Otherwise, we will be left behind as our neighbouring countries dash past us in seizing global economic opportunities at full speed. – November 27, 2021.

* Razali Yaakob reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.

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