Rather controversially, Economic Minister Rafizi Ramli noted that it would be unfair if the Federal government exclusively funds mega projects for states under Opposition rule when others with much higher contributions to the national gross domestic product (GDP) do not enjoy similar benefits.
He said some states, like Selangor and Johor, do not depend entirely on the Federal government to fund such high-impact projects, unlike the four states currently governed by the ruling party.
“If we look at the respective State Economic Development Corporation (SEDC) in Kelantan, Terengganu, Kedah, and Perlis, for instance, they still rely on the Federal government to implement projects.
“Therefore, I think it is unfair to other SEDCs, whereby they do not receive allocation (for state projects) from the Federal government,” he said today.
This was in response to an opposition MP from Kelantan asking if Putrajaya would be willing to support the idea of granting SEDCs the authority to boost its domestic direct investment through inter-state collaborations.
He said that although states have control over their respective SEDCs, these agencies still come under the Economy Ministry’s jurisdiction.
The minister added that the crux of the issue lies in the varying levels of management of the states’ economic development corporations.
While some have achieved a high level of self-sustainability and transformed into substantial conglomerates without relying on development allocation assistance from the Federal government, there are Opposition-led states that still require millions in aid annually.
Rafizi’s response sparked an uproar where other MP’s argued that it is the Federal government’s duty to help the states, as they contribute to the national GDP.
However, he pointed out that Opposition-led states are among the lowest contributors to the national economy.
“Of course, the funds were contributed by the states, but it must be noted that they came largely from states with higher GDP contributions,” Rafizi said.
Based on data from the Statistics Department, Selangor was the biggest contributor to Malaysia’s GDP last year at 25.5 percent. It was also the state’s highest-ever contribution on record.
All four Opposition states, meanwhile, were among the bottom half of GDP contributors. Combined, they only contribute 8.1 percent to the economy.
