By Danial Dzulkifly
KUALA LUMPUR, Dec 2 — Selangor’s decision to pivot from traditional budgets centred on cash handouts towards capacity building has been lauded as “the right move” and forward-thinking move by Bank Muamalat chief economist Afzanizam Abdul Rashid.
He stressed the importance of preparing Malaysians to navigate an evolving economic landscape, particularly with the rapid advancement of technology and automation, and moving away from broad cash handouts.
“People often expect immediate cash handouts or other ‘goodies’ from the government (when a budget is tabled). While some of that remains, the focus on capacity building is crucial for long-term growth.
“For instance, artificial intelligence (AI) is likely to displace workers on a large scale. It’s vital for the government to intervene by equipping youth and graduates with the necessary skills to adapt to these challenges,” he said in the latest episode of Selangor Journal’s Lunch on Us! talk show recently, which focused on the 2025 Selangor Budget.
The RM3 billion budget was tabled by Menteri Besar Dato’ Seri Amirudin Shari on November 15 at the Selangor State Legislative Assembly.
Instead of continuing with programmes like the Bantuan Kehidupan Sejahtera Selangor (Bingkas), which provides a RM300 cash aid to 30,000 recipients, the budget which Afzanizam described as expansionary demonstrates a holistic approach to economic development, with several key strategic initiatives, including a greater focus on AI integration.
Through collaborative programmes like the AI Trailblazers initiative with Google, Selangor aims to foster innovation and enhance industrial competitiveness by integrating AI into administrative systems, financial management, and business operations.
Environmental sustainability and infrastructure resilience are equally prioritised in next year’s budget, with a substantial RM34.27 million allocated for flood mitigation projects across critical river basins including Sungai Klang, Sungai Langat, and Sungai Selangor.
An additional RM4 million is dedicated to upgrading coastal bunds in Sabak Bernam and Kuala Selangor districts, addressing climate adaptation challenges.
The budget also demonstrates a comprehensive approach to social development, with targeted programmes for health, education, welfare, and youth empowerment.
These initiatives align with the state’s broader vision of creating a caring and inclusive society, moving beyond traditional welfare models to create sustainable social mobility pathways.
Unpopular but necessary
Afzanizam lauded this strategic shift by the state, noting that such an approach is more impactful than traditional cash handouts.
“These strategies provide sustainable, long-term benefits,” he said, highlighting the alignment with Federal-level initiatives such as targeted subsidies and income-generating programmes like the People’s Income Initiative (IPR).
“These are more impactful strategies than providing cash handouts because they provide sustainable, long-term benefits. It is a move that has been carefully thought out and aligns with similar efforts at the Federal level,” he said.
The economist added that the decision to move away from direct cash handouts, like Bingkas, might not be immediately popular among voters, who may prefer simpler, more populist measures.
However, Afzanizam stressed the importance of educating the public on the broader benefits of development spending.
Capacity building is also aligned with the Madani Economy framework, which aims to raise the share of wages in Malaysia’s economy from the current 33 per cent to 45 per cent by 2035.
Meanwhile, he also expressed concern over the declining number of labour unions in Malaysia, emphasising their importance in advocating for fair wages and equitable practices.
To address this, Afzanizam called for active intervention through policies like minimum wage, progressive wage initiatives, and strategic measures involving labour unions.
These efforts can enhance productivity, ensure fairer wages for workers and drive
better earnings for companies.
“That is why I think the role of the government is to become the mediator, because on one hand we want to protect the rights of the labour and on the other, we want to make sure that businesses remain viable,” he said.
