Thursday, 17 June 2010

The New Parliament Building

Note: This was not published in The Star due to the fact that the IT department thought it was a dubious email and quarantined it!


Throughout history we have examples of how the excesses of rulers help propel a revolution. Marie Antoinette was perhaps not quite the callous spoilt queen who supposedly uttered those famous words “let them eat cake” when told that the starving people of France had no bread. But it is undeniable that the extravagance of the court in Versailles played a major role in the over turning of the French monarchy and the success of the Revolution.
A bit closer in place and time, we need only look across the South China Sea to observe that the corruption of the Marcos regime was quite wonderfully symbolised by the thousands upon thousands of shoes owned by Imelda. The bleeding of the people of the Philippines by the dictator in Manila was represented by the row upon row of dainty slippers and pumps. In a country where so many were too poor to afford shoes, the imagery was powerful indeed.
And so it is here. The recent plans to build a new Parliament building at the cost of hundreds of millions of ringgit, along with the similarly priced new palace for the King, will quite naturally stick in the craw of the ordinary Malaysian.
Especially in the light of all the sounds made regarding subsidies. The people have been spoilt it appears. We have had it too easy with the cheap petrol and basic food stuff. And it is because of us that the country is going bankrupt. So the subsidies will be taken away, and we have to jolly well tighten our belts and economise.
How can anyone announce with a straight face multi million ringgit projects for new buildings (when there already exists buildings for said purpose) and at the same time bemoan our impending economic collapse. It looks a lot like them making fun of the people.
Yet, I am sure that no matter what you might think of them, the government can't possibly be so clueless. And I can already see the arguments that will be made. It is the same argument made by Mahathir when he had power (and not seeking publicity in poorly attended rallies in Terengganu).
In order to make money, you have to spend money and large government spending is a method with which to give a boost to the economy. The money for our Parliament building and palace will go to contractors and this will start a cascade of spending that will involve a whole host of industries.
Putting aside the obvious question of just who exactly are going to get the contracts, and are they truly the best companies to be awarded this work; one has to question the validity of this argument. It is true that government spending helps the economy and it is largely because of such spending that the growth in this country has appeared to be quite healthy in the past few years. However, it has to be remembered that this shine of health is only skin deep.
This kind of spending is a short term fix and for sustainable growth there has to be investment from the private sector, both internally and internationally. Ideally any public sector spending will encourage private sector investment. I can't see how a new parliament and palace is going to do that. Without private investment eventually you will simply be in a situation where there is no longer any growth and absolutely no money in the nation's coffers to artificially encourage growth.
From what I understand, foreign investment is at an all time low and much money is being taken out of this country to be invested elsewhere. Issues such as corruption, the rule of law, smooth bureaucracy, safe cities, working infrastructure and competent workforce are tough problems that have to be tackled before there can be confidence in this country by those with the money at home and abroad. Surely these are the issues that need to be addressed with certainty and courage and we ought not be looking to the quick fix of building yet even more buildings which are unnecessary and in the current climate look like cruel taunts.

Thursday, 3 June 2010

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.


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.