It takes more than just subsidy cuts

Brave New World (The Star)
3 June 2010

Doing away with subsidies is only plugging some of the holes in the system. A holistic approach is needed to put the economy back on sturdy footing.

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SO, there I was driving down the Federal Highway, minding my own business when the car in front of me stopped suddenly. I braked as hard as I could, but due to the wet conditions and the fact that I was perhaps driving a wee bit too close, there was a moment of realisation that I was going to crash. Sure enough, I did.
This was the second time I’ve crashed due to wet conditions. The first time saw me spinning a little Kelisa a full 360 degrees; on a flyover no less.
Contrary to popular belief that during such moments one’s life flashes before one’s eyes, the only thing that flashed before mine was a vision of Ah Sang my mechanic sucking his teeth and saying “Waaah! This will cost you”.
Anyway, back to my Federal Highway escapade. The front of my Proton was pretty much smashed. The lights were gone, the bumper and bonnet were gone, and the radiator was wheezing its last breath.
With a heavy heart, I took the car to a workshop, mentally kissing away my No Claims Bonus, and they proceeded to repair it.
At the end of two weeks, the car was ready. Everything was fixed and shiny. Now, if I had gone there and they had just replaced the radiator, or just the bumper, I would have been mightily peeved. You can’t just fix one part of a car that has so many problems; you have to fix it all.
This brings me rather neatly to the subsidy cuts. According to Minister in the Prime Minister’s Department Idris Jala, our country will go bankrupt if we don’t stop the subsidies we enjoy on petrol and basic food items.
Now, the only thing I remember from my Sixth Form economics lessons was that supply and demand are somehow related and if you sell crisps in a pub your sale of both crisps and beer will increase. I never understood any of it, so forgive me if I am a little slow.
I wish someone would explain to me the following. Firstly, are subsidies the only thing causing a drain in our resources? I mean, we do have a gigantic civil service; perhaps a lot of money is going there.

And corruption is pretty rife, so rife in fact that “commissions” to deal makers for government purchases goes into the tens of millions of Ringgit. If our money did not line the pockets of cronies, wouldn’t there be more of it safely tucked away? [This paragraph was taken out by The Star - I wonder why?]

How about wasteful spending? I mean we’ve had petroleum money for decades that is now running dry; has all that money gone to subsidies so that we can enjoy cheap roti canai and kopi tarik?
Maybe, just maybe, if we did not use our money to bail out failed companies and financial institutions, and perhaps if we did not build grandiose buildings in the middle of nowhere, some of that money will still be around.
Be that as it may, the subsidies look like they are going away. This would not be so bad if we can be assured that, to paraphrase the many billboards I see on the Federal Highway, “people will come first.”
If you take away the petrol subsidy, for example, Mr BMW is not going to suffer. Neither will those having government-issued Perda-nas. But the ordinary Mat on his kapchai or his second-hand Kancil, will.
And the reason people scrimp and save to buy these vehicles which drink up subsidised petrol is because our public transport system is simply awful. If our ministers were to take the time to look, they will see hordes of people squeezing into buses even late at night.
So, it is all well and good to do away with petrol subsidies. It’s better for the environment, for example, but those with no alternatives will suffer.
Furthermore, when the price of basic foodstuff goes up it means that a working person’s daily expenses go up as well.
I remember just a few months ago when an iced tea at my favourite roadside stall went up by 20 sen due to the rising sugar price.
This may be a laughing matter for those who sip lattes in a hotel lounge, but it’s not for most Malaysians. Many Malaysians do not enjoy a reasonable minimum wage because we do not have any law that imposes a minimum wage.
So, pardon me Mr Jala, but I think putting the responsibility of saving the nation from bankruptcy on the shoulders of the masses is not only unfair; it is also merely fixing a part of the problem and not the whole.
It must be done holistically; otherwise, one cannot be surprised if people get a little peeved.