The 2022 Sarawak State Budget announced by Premier YAB Datuk Patinggi Tan Sri (Dr) Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg in October 2021 aims to restrict “any permanent adverse effects” of the COVID-19 pandemic on Sarawak’s economy and its people.
“The 2022 State Budget will enable us to create conducive conditions for economic recovery and growth, which will open up new business opportunities, create jobs and bring about multiplier effects to the domestic economy,” says the Premier in his statement on the budget that is worth nearly RM10.7 billion.
Under the State Budget, an estimated RM7.509 billion has been allocated for development expenditure, which is distributed throughout the economic sector at RM5.371 billion, social sector (RM1.905 billion) and general administration sector (RM0.233 billion).
Much of the finances designated for development focus on physical infrastructure, facilities or amenities, be they roads, bridges, sports facilities, government offices or affordable houses.
This form of development especially infrastructure that are modern, efficient and reliable is fundamental for a country’s economic growth.
Apart from generating more job and business opportunities, the exploration of new lands and improvement of supply chains, among many other potential benefits, can in turn enhance the lives and livelihoods of communities benefiting from having greater access to infrastructure that they never had before.
Allocation has also been made for development that is social in nature, including village and community development programmes, social welfare services, education and human capital development.
Social development, or what the World Bank refers to it as social sustainability and inclusion, puts more emphasis on “people who have been excluded from economic and social opportunities, and increasing investment in inclusive growth.”
Setting aside a budget for such development is in line with one of six “interlinked and mutually reinforcing pillars” of the 2022 State Budget, namely “social cohesion and community development that addresses socio-economic inequities, rural-urban and regional imbalance.”
However, some experts believe that economic growth does not automatically guarantee improvement in social cohesion and even development to begin with.
Instead it can lead to a rise in social disparity, discontent and unrest if economic policies and growth are not properly distributed or both economic and social developments are not balanced.
Thus, there is a need to recognise the importance and integrate mechanisms that promote social cohesion into development strategies and implementation to ensure a nation’s progress is reflected in its people’s well-being and quality of life as well as its environmental sustainability.
Examples of these prospective mechanisms, as noted by economist Christoph Sommer from the German Development Institute, can be policy reforms, such as in areas of social protection and taxation.
“One potential mechanism through which growth might influence social cohesion is inclusive, pro-poor-oriented improvements in development outcomes, namely employment creation, education and decreased inequality in income and resource distribution,” he adds.
