Yes Minister, we’re on better roads to co-prosperity


An aerial view of the Telok Melano-Lundu stretch of the highway.

YES, Minister. Building highways, bridges, communication networks, ports and improved river navigation are planned activities that must be seen beyond merely linking locations and people, as well as the desire to join the league of quickly modernising economies.

High-quality public infrastructure supports growth, improves well-being and generates jobs.

Yet, infrastructure investment is complex, and getting from conception to construction and operation is a long road fraught with obstacles and pitfalls.

However, there is another side to the story that involves politics, which many people in the planning and implementing circle either overlook, pay little attention to or are unaware of.

Infrastructure development is by its very nature a political act of creation.

Yes, Minister. It brings to light the reality of the interlocking relationship between power, planning and control within the dynamic context of socioeconomic development. Germane to it is the investment decision and spending power of the ruling government.

Every investment decision creates the possibility of a different future.

Manifestation of social, political power

However, the need for infrastructure is frequently discussed in impersonal terms and presented as objective facts. Notwithstanding, infrastructure is essentially the visible manifestation of both social and political power. Therefore, through their design, placement, size and scope, government construction projects, including infrastructure and communication facilities, would reflect social, economic, and political power in society.

Only after engaging in extensive public discussion during frequently-contentious planning processes can a society decide what it needs to construct. The political nature of allocating scarce investment resources cannot be overcome by the technical expertise of engineers and scientists.

Professional experts can and ought to contribute to the conversation by shedding light on what is practical and the trade-offs of various investment options.

In other words, technical experts can provide an answer to the empirical question of what can be constructed.

However, Minister, they cannot respond to the normative query of what ought to be constructed.

The costs of disinvestment and pollution that may arise, and isolation from other areas are all too often borne by low-income and rural communities, while politically connected individuals and established economic groups profit from access and opportunity.

New Keynesian perspective on infrastructure spending

Students of social economics would benefit from a refresher on the New Keynesian perspective on government spending on infrastructure.  The argument for government spending on infrastructure — such as roads, water and sewer systems, communications highways, and similar projects — to boost the macro-economy is revived by the New Keynesian models.

The New Keynesian view contends that the effects of government spending come through the supply side of the economy, in contrast to the traditional Keynesian view, which maintains that the effects of fiscal policy result from the demand side of the economy. This shift in perspective is fundamentally based on the notion that public investments are distinct from public consumption expenditures.

If the productivity of public investments is high enough, even in economies where private resources are fully utilised, a temporary increase in public spending on infrastructure can lead to a multiple expansion of output.

File photo, taken in Feb 25, 2019, shows Sarawak Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg (left) showing thumbs-up during a photo-call after declaring open the Bako Bridge, near Kuching. With him are (from right) then-federal minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar, Minister of Utilities and Telecommunications Sarawak Datuk Julaihi Narawi, and Deputy Minister of Energy and Environmental Sustainability Sarawak Dr Hazland Abang Hipni. — Photo by Sarawak Public Communications Unit

Public investments

Yes, Minister. Public investments increase the productivity and rates of return on private capital, which attracts more private investment. The right kinds of government spending will stimulate the economy without leading to overconsumption and an increase in interest rates.

Infrastructure projects frequently fall short of meeting their time, money, and service delivery goals for a number of reasons, one of which is poor governance. No matter how public infrastructure services are provided, all nations face a number of difficulties, according to an Organisation for Economic Cooperation and Development (OECD) survey on the state of infrastructure planning.

Both constructing new roads and enhancing telecommunications infrastructure have a significant impact on productivity and growth for a large number of OECD countries, according to a study by the organisation, of which Malaysia is a member country.

OECD study

According to the OECD, inadequate infrastructure is frequently blamed in both academic and policy circles for the underperformance of less developed nations. According to conventional wisdom, infrastructure and productivity/growth are positively correlated.

Good infrastructure is essential for any country to be able to have a well-functioning and robust society, economy and businesses. More generally, infrastructure provides a fundamental support function to enable, sustain or enhance societal living conditions.

Indeed, Minister.

It provides the backbone of modern, well-functioning economies by providing connectivity through enabling the flow of goods, people and information, and by supplying the necessary inputs in the form of energy and water that constitute the foundation for most commercial and industrial activity.

In addition, infrastructure is crucial for providing a variety of services, including those that are vital for a high standard of living and health, including electricity, water, sanitation, broadband connectivity, public transportation, health care, and flood protection.

Infrastructure and GHG emissions

Because infrastructure currently accounts for 79 per cent of global greenhouse gas (GHG) emissions, we must examine how public and private infrastructure can support upholding the Paris Agreement and achieving the Sustainable Development Goals (SDGs) and determine the standards and policy guidance that can assist in achieving these outcomes.

Yes, Minister. The relevant authorities must take proactive action and reflect this forward-looking concern in their policy and planning on infrastructure and communication development, even though Sarawak has not yet experienced a significant increase in alarm over the issue’s seriousness.

Still, one must be sufficiently informed to understand the role, function and values of infrastructure within the broader context of a dynamic and changing socio-economic environment, where infrastructure is factored in an interlocking relationship with other social and economic factors and processes as a facilitator of change and progress.

Indeed, Minister. This goes beyond the familiar descriptors of connectivity and resource reduction. Only then, can one stand up on pure democratic ground and make constructive criticism or assessment of any infrastructure project that may fall outside the desired socio-economic greed.

The economy of Southeast Asia is doing well. Up until 2022, the region experienced steady, healthy growth of more than five per cent annually, according to Grant Thornton’s International Business Report (IBR).

In light of this, business sentiment has risen to a new high. At the heart of the dynamic changes is infrastructure that’s causing this optimism and providing real opportunity for Asean businesses in the years to come.

Deputy Premier of Sarawak Datuk Amar Douglas Uggah Embas is also the state’s Minister of Infrastructure and Port Development. — Photo by Information Department

Infrastructure biggest contributor to economic upswing

Infrastructure investment is a top priority during this upswing, according to a study by IBR.

Upgrading local infrastructure was cited as the biggest opportunity for the Asia Pacific (APAC) region over the next five years by 42 per cent of business leaders.

Yes, Minister. Economic transformation is occurring in much of Sarawak as it is across most of rural Asia (Asian Development Bank [ADB], 2021). The rural economy has become increasingly linked to a rapidly integrating urban and semi-urban economy, and rural Sarawak faces new opportunities and challenges.

Agropolitan economy

Given these positive developments, it is obvious that additional infrastructure development, such as better roads and network facilities, is needed to link urban and rural growth centres, provide access to vast hinterlands for the opening up of agro-based industries, and create a critical mass for an agropolitan economy.

Resource-sharing and trade partnerships between urban and rural growth centres have led to these socioeconomic trajectories. All this eventually evolves into a co-prosperity sphere integrating the social and economic assets of the urban and rural areas and creating a bigger space for progress and prosperity.

A key driver in this initiative is infrastructure. This calls for increasing public infrastructure spending along with more supporting private funding.

Co-prosperity sphere

Government economic goals may be greatly impacted by infrastructure investment and how these investments are managed. If new investments have high benefit-cost ratios, they can significantly boost productivity and economic performance.

Investments in infrastructure are crucial for the economy’s operation because they boost productivity, connectivity and business expansion, all of which can boost public confidence in both existing and proposed infrastructure.

Yes, Minister. A requirement for current and future economic growth, well-designed infrastructure is a necessary element of prosperity. By encouraging growth, creating jobs, and improving productivity, efficiency, and quality of life, infrastructure supports an economy’s productivity, quality of life, and economic development. By providing the trustworthy support networks that we all rely on, it promotes growth.

Long-term economic output is increased by networked infrastructure, such as transportation and communications, because these sectors benefit from increased business efficiency, efficient supply chain management, and product delivery.

Reliable and robust networks promote business confidence, which promotes increased investment, business growth, and the emergence of new economic opportunities.

* Toman Mamora (PhD Nottingham, UK) is a communication and research consultant. He comments on contemporary social and political issues and seeks to raise public opinion on subjects of societal value.