A reply to Shin Chew- Isu Subsidi

Selepas menjawab surat daripada Henry T dua hari lepas mengenai migrasi, kali ini aku ingin menjawab artikel Shin Chew yang berbicara mengenai subsidi.

Basically artikel ini inderectly cuba memberitahu kepada kerajaan mengenai 'candu' sebenar dalam isu subsidi. Dan selagi kerajaan tak address candu ini, jangan nak buang candu seperti harga petrol dan makanan. Ada beberapa perkara yang aku ingin betulkan atau memberi sisi pandangan baru terhadap apa yang dibangkitkan.

Berikut artikel penuh:

Causes and Effects: Lim Sue Goan- My SinChew

The country has been caught in a dilemma. It needs to quit opium (subsidy abolition) but hesitates about it. In addition to external uncertainties, it is worried about triggering public discontentment and aggravating economic downturn.

The factors causing the dilemma could be traced back to the wrong decisions made in the 1980s and the 1990s.

(No, the dilemma is not about the wrong decisions made in the past. It simply because government of the day is not a strong government. And we have irresponsible opposition which will politicise all the things done by Government and provide no solution.)

Malaysia has been experiencing a financial deficit for 14 consecutive years since the 1997 Asian financial crisis and the government has to borrow money to expand the economy. However, it is not the only factor.

(Financial deficit is not much a problem. It is a question whether it can be sustain or not. And to face economy crisis, it is the right thing to do. Kalau government pun tighten its belt, what do you expect from private sector and ordinary people? Bila semua sibuk simpan duit dan berjimat cermat- siapa yang akan berbelanja? Bila tak berbelanja macam mana ekonomi nak berjalan untuk pulih? Surely being in a financial deficit has its benefit.)

After Tun Dr Mahathir Mohamad took over the office, he turned agricultural economy into industrial economy. There was nothing wrong with it but the government had focused only on manufacturing while ignoring agriculture for about 20 years. It has caused deterioration in food production. As a result, we have to import food.

Today, international food price hikes have caused our food price index to increase by 4.9%. Food prices are expected to continue surging due to climate anomaly.

(We have been importing food not since Tun Mahathir took over the office. It is in fact after turning into industrial economy- we, the ordinary people have better purchasing power to buy food from other country. If American can buy Fillet O Fish with 5 dollar, so does Malaysian with 5 ringgit. Even if we think about ROI (return on investment), satu hektar tanah yang dimajukan untuk bina kilang lebih banyak berikan pulangn berbanding dimajukan sebagi pertanian. You just think satu bidang sawah padi dengan satu kilang Intel- which one give a greater impact on economy? And please remember as I stated before- we have limitation and so we have to choose.)

The second mistake was the move of bringing in a large number of foreign workers. After the development of labour-intensive industries, the government has failed to transform the industrial economy into a value-added economy.

To maintain low wages, retain foreign investment and create a sight of prosperity, the government has provided substantial subsidies. As long as they kept necessity and fuel prices low, workers would not ask for pay increment. It was indeed an approach of seeking temporary relief regardless of the consequences.

In addition, the authorities have also provided assistance to Bumiputeras, civil servants and entrepreneurs, such as allowing contractors with a Jusa F to manage government projects, assisting Bumiputera companies to obtain contracts and cultivating Bumiputera entrepreneurs. Expanding racial wealth in such a way has eventually evolved into a walking stick culture, or some called it an alternative subsidy.

(The problem with this stick culture is not only confined to the Bumiputra community. Dont forget the form of subsidy such as petrol, food, electricity, utility has been enjoyed by all races. So basically Malaysian- regardless of races has a problem with this stick-culture.)

The third mistake was the signing of unreasonable concessionary contracts. Under the privatisation policy, the government has transferred national resources to private companies while providing subsidies. For example, after the massive blackout in the peninsula, Mahathir allowed the establishment of Independent Power Producers (IPPs). Tenaga Nasional Berhad (TNB) provides the IPPs natural gas subsidy but the IPPs sell electricity to the TNB at higher prices. The annual subsidy has increased to RM22 billion. Khazanah National Berhad is the major shareholder of the TNB and thus, the subsidy actually come from the government.

Unsuccessful privatisation projects have been taken over by the government and the government has to make compensation if it does not approve price increment. The burden of the national treasury has been worsened and this is contrary to the objective of privatisation.

(Selepas massive blackout di Malaysia, kerajaan sedar supply elektrik tidak boleh hanya bergantung kepada TNB. There should be alternative supply and this must come from private sector. Plus, TNB tidak mempunyai kapasiti. Tetapi menceburi industri penjana bebas bukanlah sesuatu yang diingini. Jadi untuk menarik minat sektor swasta menceburi bidang ini, kerajaan terpaksa membuat satu perjanjian yang dianggap berat sebelah- of course favour the IPP supaya mereka ini bersetuju untuk menjadi IPP.

Memang benar elektrik di Malaysia disubsidi dengan dashyatnya. Tetapi elektrik yang murah inilah dahulu yang menyebabkan kos perniagaan di Malaysia rendah lantas menarik pelabur asing. Elektrik murah ini jugalah yang dinikmati oleh rakyat Malaysia yang biasanya dibazirkan di asrama dan juga untuk mengecaj ipad berjam-jam. Kita boleh membayar harga gas ikut harga pasaran- kalau itulah yang diminta pembangkang. Ya, kita boleh. Tidak ada masalah. Tetapi adakah kita sanggup membayar harganya? Atau apa sebenarnya solusi pembangkang terhadap masalah yang bakal dihadapi oleh syarikat2 dan orang ramai?

Kita juga jangan lupa syarikat IPP ni kebanyakan dimiliki sahamnya oleh GLC dan agensi2 seperti KWSP dan PNB. Dan ini adalah institusi yang memberikan pulangan kepada pelabur. Dan pelabur adalah kebanyakan rakyat Malaysia.Jadi sekiranya kita mengurangkan keuntungan IPP- bermakna dividen keuntungan yang kita dok bising sebab hanya 4 dan 8% itu akan jadi lagi sikit. Bagaimana pembangkang nak adrress isu ini pula?

IPP ini juga banyak menceburi perniagaan lain seperti perumahan, jalur lebar, kapal, etc. Dan ini memberikan pendapatan kepada negara dan juga mewujudkan peluang pekerjaan. Tidakkah kita melihat apa yang dikatakan subsidi itu sebenarnya adalah pelaburan?

Memang benar perjanjian itu adalah lopsided. Tetapi we can only renegotiate. Bukan semudah untuk merevoke perjanjian yang dibuat.)

The fourth mistake was the pursuit of the big government concept. Mahathir believed that large-scale projects would bring greater economic benefits and thus, massive constructions projects, including a new administrative centre, a huge airport and the Sepang International Circuit (SIC), were carried out. Meanwhile, the number of civil servants has not been reduced after the implementation of the privatisation policy. Instead, it has been increased to 1.29 million people.

(Since when kejayaan penswastaan bergantung kepada peningkatan jumlah kakitangan awam? I reject this point.)

The year of 1998 was the turning point of the national economy. The implementation of capital controls has caused many subsidies to be increased year by year. If labour-intensive industries were gradually eliminated, the multimedia super corridor was developed successfully and subsidies were reduced or removed in the 1990s when the national economy was still good, the national economy would not be the same today.

Subsidies have become a political need but we can never get rid from the "middle-income trap" if we continue relying on subsidies.

(As much as subsidies have become a political need, removing it is a political suicide.)