Sunday, April 04, 2010

Demonising subsidies is wrong. Subsidies is essential for justice...and the people of Malaysia

Government subsidies have ensured that we all get almost free education(including books), healthcare,  essential items like cooking gas, fuel, diesel, sugar, rice, cooking oil, other food items, basic amenities like electricity, water, sewage treatment, telecommunication, radio/television, roads and other public amenities, etc for very nominal affordable rates...and this is something that must continue to be for the good of all in Malaysia.

But sadly, Najib's premiership is trying even harder to move towards pure capitalism - where the consumer pays for everything at cost price. He seems to be trying to emulate the failed American capitalist model - that has seen the generation and increase of the 'new poor, called the Fourth World. The capitalist system has failed as a model for justice for all persons. 

Malaysia, like many other developing countries, have been 'forced' to open itself to 'free trade' and other aspects of pure capitalism - and Malaysia have surrendered a lot when it signed the World Trade Organisation(WTO) Agreements, and other Free Trade Agreements - amongst which also state that there can be no more special preferences to citizens (let alone particular ethnic groups in Malaysia) or local companies. No more taxes and import duties , or other measures, that used to give a competitive edge to Malaysian companies and products. 

Malaysia is currently is still protecting only its automotive industry - and I wonder how much Malaysia pays to do this. 

The new trade agreements, that Malaysia signed also prevents even the imposition of conditions like requiring the use of a certain percentage of local Malaysian products /content (or Malaysian manufactured products). Of course, our good UMNO-led BN government has not told us all this, let alone ask the people of Malaysia, before they signed all these agreements which will certainly be very prejudicial for Malaysia and its peoples.

I hope that the Pakatan Rakyat, other opposition parties and civil society groups will concentrate efforts in educating Malaysians as to what the UMNO-led BN had done - and its impact to Malaysia and Malaysian peoples, and what we can do to either reverse this or at least mitigate the future consequence of this. But first, these opposition politicians need to educate themselves about these matters - and then take on the obligation of educating us Malaysians. Sadly, our government controlled and/or owned media has not fulfilled its role of educating people, informing us about the pros and cons, etc. They have just kept it all 'secret' - maybe by reason of directives from those in power, and also because sadly many reporters are also not aware/educated about these issues. We have been 'frogs under a coconut shell' ('katak di bawah tempurung') for too long - and now we are going to face the consequences of this. 

The agreements that Malaysia has signed forces Malaysia to open its doors wide to foreign competitors - and many of the subsidies we have in Malaysia are seen as a form of 'protectionism' which is not allowed by these agreements.

The concern of all these agreements is not the welfare of all persons - but purely business. Fair  Free Trade  - no protectionism...that is the priority and concern.

Without telling us the truth and the reasons, why Malaysia has to do away with 'subsidies', the government has started an initiative of demonizing subsidies - how bad it is? how it waste government monies? how it is not really reaching the target group, etc..? how we need to get rid of it so that money saved can be used to build more schools, hospitals, etc...

There has been a lot of talk about subsidies as though it is  something bad - and waste of government money - the people's money. Tell us why you are saying so now, Najib Razak.

But subsidies are essential, and has always been so to ensure the survival of  all persons in Malaysia - especially those from the lower-incomed groups - including the middle class. The plan of removing subsidies - and using the money saved to channel financial assistance directly to the poor is being now thrown around. 

But alas, this really will not work given the rise of 'corruption' and 'discrimination' in Malaysia.

Even today, there are many complaints that the UMNO-led BN government discriminates against persons belonging to (or alleged to be supporters of) other Opposition parties/persons. Connections are 'important' in Malaysia when it comes to receiving benefits and opportunities, and that is why it is best to just maintain subsidies for all essential items that affect survival and normal day living of all Malaysians. Remember, subsidies are only for the basic needs.

With the opening of markets, and the entry of foreign companies - this will mean that the Malaysian government money may have to be given to these foreign companies as 'subsidies ' to maintain the low  prices that people in Malaysia pays.

Why pay the foreign companies? Because there is no choice for just paying local current service/material providers as this would be a violation of the 'free trade' equal competition requirement. Today, subsidies with regard to electricity is paid to Tenaga - but when another foreign utilities company comes in, then that company too will have to be paid 'subsidies'. Whose fault? The UMNO-led BN government - but we have to pay for its mistakes in the past today and tommorrow.

Roads - well, in Malaysia these used to be free. Then the government started 'privatizing' roads and today road users have to pay hefty tolls to use these roads. The government did promise that they will still be building government roads, and all existing government roads will be enhanced to double-lane roads - but anyone using government roads will see that many of these roads are in a state of disrepair, and there seem to be no upgrading and improvement of these roads. To travel from Temerloh to KL(less than 130 Km), the toll that you have to pay is RM6 + RM5 + RM3, and it is a lot. Alternative government roads - well, there really is none from Karak to KL, is there? Even if there is, there really is no signboards - or even upgrading done.

Hospitals - well, the requirement was a nominal RM1 - RM5 - but slowly, we see charges coming in. By the way, some government hospitals, like University Hospitals,  have been 'corporatised' - and this means you have to pay unless you are a civil servant (or retired civil servant).  Heart healthcare - well that is no more available to the poor and the private citizen unless you have a lot of money... IJN (National Heart Institute) - and no more heart healthcare units in government hospitals all around the country.

Television - Well, try using a normal aerial and see the kind of television reception that you get. To get good TV, we have to subscribe to satellite television, i.e. ASTRO. Minimum charges per month is RM37.95. Malaysian TV channels should be FREE - RTM1 & 2 at the very least. Subscribers should have this option, and should maybe just charged a one time charge for the satellite disk, decoder charges. In Thailand, you have this option but not in Malaysia. The minimum monthly charge is  RM37.95. And, of course the government is not improving the ordinary television aerial coverage and quality.  

I can go on....but enough for now.

NEM talks about higher pay - but this is for the now and the future. How about the current and past who earned so little (who have saved so little for the future)? How about the old folks? Currently, the government can increase pensions of former public servants - and provide everything free for this category...but what about those that were self-employed or privately employed? EPF - one time pay-out is certainly not going to sustain most workers beyond 5 years of their retirement, given the current cost of living. So, what happens then?

I really hope that the Opposition Parties, besides just trying to take over the government, would spend time on these issues - and tell us what they will try to do to resolve this problem that the UMNO-led BN has left us with.

I really would be more interested in this - rather than the Rosmah-Najib scandals, sodomy trials,  party-hoppers, etc... 

1 comment:

Liew said...

Subsidy, at best, is a poor mechanism to make food/fuel/services affordable to the less fortunate. Because of the nature of goods and services being subsidised, preventing subsidy reaching the wrong hands is difficult. Put it another way, getting subsidy to be enjoyed by the target people is tough because these goods and services are consumed widely. Besides, subsidy often create distortions in a market-driven economy giving the false impression that the cost of production is low. Hence, subsidy should be given out to specific deserving individuals through a concession system on selected goods and services (such as medicine, public services). A better form of assistance to deserving citizens is through financial assistance paid according to needs. The people of a country must learn how to live according to world prices and this will make it more in tune with global competition.