Research on the Impact of Economic Growth : Case Study of Malaysia

Public expenditure - Spending made by the government of a country on collective needs and wants such as pension, provision, infrastructure, etc.

The government solely protects the rights of the employees and consumers and offer of public goods. Government spending and expenditure are one way by which the government control market economies, with increased spending to increase cash flow in the economy, and increased expenditures to minimize cash flow in the economy. Such increases

Government spending is a way of increasing aggregate demand, and if successful can help boost economic growth. Government spending tends to be directed at infrastructure and maintenance, as this not only creates jobs but creates a valuable asset.

Another desirable effect of economic growth is increased tax revenue, the government receives more money from tax payers with out having to increase tax rates. If people are earning more, the more money they will pay in tax, the more money companies make the more tax they must pay to the government. The more money the government gains in tax revenue the more they can do to improve the country, they can invest in transport and infrastructure, they can make improvements to health care and they may even need to employ more people further reducing unemployment.

Economic growth is fundamental for sustainable development. It is not possible, for a developing country, to ameliorate the quality of life of its growing population without economic growth. The relationship between government expenditure and economic growth has continued to generate series of debate among scholars. Government performs two functions- protection (and security) and provisions of certain public goods (Abdullah, 2000) and (Al-Yousif, 2000). Protection function consists of the creation of rule of law and enforcement of property rights. This helps to minimize risks of criminality, protect life and property, and the nation from external aggression. Under the provisions of public goods are

1Malaysia product was established by the Malaysian Prime Minister Dato' Sri Haji Mohammad Najib bin Tun Haji Abdul Razak on 16 September 2010 with the slogan "Generating Transformation". 1Malaysia is intended to improve the relationship of all Malaysians, regardless of background, race, religion or culture. There are some major concerns that need to be addressed to seriously engage in the 1Malaysia concept. 1Malaysia concept meets the needs of all sectors of a society and to ensure equal distribution of wealth between races, between the state and federal governments. Integrity in government and public sector is a problem. Introduction NKRA and KPI is a laudable step. Use of Key Performance Indicators (KPIs), metrics and goals are more commonly used in private business, and the National Key Result Areas (NKRA) is natural is an important part of the efforts of 1Malaysia.

Government expenditure is a term used to describe money that a government spends. Expenditure occurs on every level of government, from local city councils to federal organizations. There are several different types of government expenditure, including the purchase and provision of goods and services, investments, and money transfer. Government spending can be on either for war or for the citizen’s wellbeing but the government handles it directly. The U.S. Federal Expenditure can be thought as the national budget for the country. It is the financial plan of the federal government to spend on government expenditures. The budget can be compared to regular citizens personal budgets in which they spend on things they need. The personal budget is based on how much you earn and the national budget is the same. Based on its income which comes from things like taxes and trade. The money generated from the country is used to help run the nation. With all of the income coming in the federal government uses it for things like fixing roads, paying the judges, to fight crime, and much more. With all of these factors that they have to include maintaining the nation is very costly and due to things like unexpected events occurring where the federal government needs to act also puts a strain on the spending. Usually this is when the nation goes into debt and has to

The public expenditure issue may be analyzed by understanding and appreciating changing balance between three dominant economic philosophies both in the past and present. The three dominant economic philosophies are libertarian who believes in minimum government role in public expenditure and on the other hand the collectivist believe in fully government role and summarily rejecting supremacy of private interests. The neo-liberals take a stand which serves as a go between the two.

One of the reasons the government spend is money is so that they can transfer tax revenue to the people of the economy through education, health service and social welfare. The government also spends money for public goods, public goods benefits the country in many ways for example the national defence is a form of public goods, national defence is the line of defence for the country meaning that hey protect the country.

Evaluate the government policies and strategies used to promote economic growth and development in your chosen BRIC economy, making close reference to the effects of globalisation on said economy

Many previous researches have asserted that education effect economic growth positively. The main resource of this

The major benefit of economic growth is quite clearly the boost to the economy in the country, which consequently causes an increase in real income per head of a population. This can increase the living standards in the country as people have more disposable income to spend on luxury goods. Also, the growth of the economy attracts companies to the country and adds to the economy, therefore supplying more jobs in these new companies. The rise in employment triggers the multiplier effect, as new workers therefore have larger incomes and spend more money on local businesses in the area etc. This was illustrated in the UK, for example during the 1990s the number of people in work has rose by around 26 million in 13 years. The boost in the economy also provides the government with extra money to improve public services such as education and healthcare. Not only this, but the government can also fund low-carbon investment, innovation, research and development, resulting in more efficient production processes to reduce costs, as well as protecting the environment.

Amartya Sen defines economic development in terms of personal freedom, freedom to choose from a range of options. While economic growth may lead to an increase in the purchasing power of people, if the country has a repressed economy, there is lack of choice and hence personal freedom in restricted. Hence once again growth has taken place without any development. While economic growth may result in an improvement in the standard of living of a relatively small proportion of the population whilst the majority of the population remains poor. It is how the economic growth is distributed amongst the population that determines the level of development.

Malaysia’s GDP Annual Growth Rate since 2000 till present. Notice the sharp contraction after the 2008 Financial Crises.

In terms acceleration of economic growth is based on the measurement of GDP, MALAYSIA HAS recorded a growth of 5.1% last year. Although it is lower than 7.2% in 2010, but it was so roaring in the context of a difficult global economic environment and uncertainty. In contrast, global economic growth has dropped from 5.2% in 2010 to 3.8% in 2011 while the economy of the developed countries like USA, Germany, UK, France and Japan also recorded weak growth of respectively 1.5%, 2.7%, 1.1 %, 1.7% and -0.5% in the same year; far lower than Malaysia's achievements. Following a satisfactory GDP growth was assisted by the Federal government revenue increased by RM13.2 billion in 2011 through increased collection of IRB estimate of RM109.7 billion compared with RM96.5 billion the government has managed to reduce its fiscal deficit to 5.0% compared projection of 5.4%. This means that the GOVERNMENT has successfully steered the nation's economy as well as the control and management of public funds wisely in the past 3 years in a row when managed to bring down the fiscal deficit from 7.0% in 2009 to 5.6% (2010) and 5.0% in the past year in a expanding economy.