Thursday, June 3, 2010

Did Idris Jala asked the right question?

Years of debate training taught me one thing: you can trap your opponents by asking the right question. For example, if I asked, "Would you prefer your country to go bankrupt or for your subsidies to cut?" The reasonable answer is rather obvious for if I said I would rather the country to go bankrupt I will look like a selfish bastard. But this was exactly the question that our minister, Idris Jala and PM, Najib posed to Malaysians a week ago. They asked us to choose between being a selfish bastard or a "noble" countrymen.

But if I rephrase the question into, "Would you rather have your subsidies cut, or to stop the corruption and wasteful government spending in order to save the country from bankrupt?" Then suddenly we are not so sure anymore that refusing subsidies cut is a selfish thing to do.

Any successful businessman will tell you that "you reap profit, not by saving money but by investing it!" What good is it if we are able to save all the money in the world if they are not meant for investing into a better future? Then perhaps this is a good time to reflect on our major government spending spree and see how the ROI (return on investment) looks like. From the Multimedia Super Corridor, Sepang Formula 1 Circuit, Bakun Hyrdo Dam, to the hundreds of low-cost housing development many of these actually reaped concrete returns to the people of Malaysia? As if to add salt to the wound, recently we purchased state-of-the-art submarines that cannot submerge (and once submerged would never emerged) and 257 armoured vehicles at RM31 million each. What is the ROI for these?

And to my shocking, I stumbled onto a 2005 Nature journal paper titled, "Malaysian biotechnology: The valley of ghost" which claimed that the government had spent USD160 million on building a biotechnology hub in Malaysia but it failed, miserably. Although I understand that the building of this hub is still "work-in-progress", how would any world-class bio-technology researcher want to work in Malaysia after this revelation by Nature, one of the most influential journal paper in the world? What is the ROI for this?

Would the subsidy cut succeed in saving Malaysia from bankruptcy if implemented as a stand-alone policy? The answer is a straight NO. In the recent sub-prime financial crisis, many countries in the west have a bail-out plan, tighten loan requirements and also have the subsidies/welfare cut. But they knew that this was just a temporary mitigation plan. Their long term strategy was to restructure the way banks work. So do we have a similar long term strategy? Or is cutting the subsidies our "long term" strategy?

Let there be no doubt that we, the Malaysians, have been enjoying a whole range of subsidies since we were born. And I totally agree with Idris Jala that Malaysians are one of the most heavily subsidised citizens in the world. But the question that goes begging here would be: where did we go wrong? Was it the 1997 Asian financial crisis? Was it the 2001 burst of the IT bubble? Was it the recent sub-prime financial crisis? Could the government be giving a false impression to us for past decades by keeping the subsidies high, the inflation low and fueling the economy with debts? It is not possible that the years of economic boom under the leadership of Dr. M is just a mirage after all?

BN knows very well that they cannot do a drastic subsidy cut. It will increase the inflation that will kill off the economy and as well as any chance they have in the next general election to re-gain the two-third majority. So they may just keep the subsidies. Here comes the scary part: Would the government continue to drive the economy with the current failed strategy despite knowing that Malaysia will go bankrupt? And mind you that when we say the country goes bankrupt it doesn't mean everyone becomes dirt poor, but only the middle working class like you and me. I personally believe that BN will continue with the "bankrupt strategy" because (1) BN ministers have abundance of wealth far beyond the reach of middle working class like you and me; (2) most of them own a 'backup' property in Australia.

I have absolutely no grudge in paying more taxes and in accepting the reduced subsidies from the government, provided that I know the money that I help saved is well spent. But not only is my confidence in the government policy so lacking, so is the general public's. There is no way a subsidy cut is going to work, not if the government first show their commitment in combating corruption and wasteful spending. And no, I'm not talking about the MACC actions on corruptions amounting to only few thousand ringgits. We wouldn't be bankrupting with that amount of corruption.


Snowpiano^ ^ said...

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yk said...

me too ^^

Victor Gu 胡渐彪 said...

send this to malaysia kini.