Lim Sue Goan
The Malaysian Insider
May 19, 2011

MAY 19 — For the very first time, Prime Minister Datuk Seri Najib Razak described the fuel subsidy as opium. His remarks were shocking as the people have been enjoying subsidies over the past few decades and would it mean that they have taken opium for decades?

Long-term opium use would cause irreversible damage to health and even death. The Chinese used to be called “The Sick Man of East Asia” during the Qing Dynasty as opium taking was a trend at that time.

If subsidies are opium to the national economy, the country must then first go through a painful process of rehabilitation before it can recover. And whether it would succeed, it all depends on the people’s determination.

Subsidies had once stirred up the people’s spirit. However, after they have gradually adapted to the effects, they started to ask for more. As a result, they have taken in too much and become lazy and dispirited. Also, their competitiveness and productivity fell.

Therefore, removing subsidies is good for long-term national economic development. It can also keep the people free from being over-reliant on subsidies and help stimulate their creativity.

However, “opium” is not the only poison to the national economy. The walking stick and other policies are infecting the economy too.

Former Prime Minister Tun Dr Mahathir Mohamad described the habit of relying on government assistance as the “Tongkat (walking stick) Culture”. A man would forget how to walk on his own if he relies on the walking stick for a long period of time and when he encounters a rough road, I am afraid that he would need someone to carry him.

Approved Permits (APs) for imported cars, protection for domestic cars, subsidies for independent power producers (IPPs), housing discounts, assistance for F-Class contractors and other polices are all defective measures. They must be abolished to recover the national economic health.

In addition, over-reliance on foreign workers is another kind of drug to the national economy. The country will never be able to get out from the “middle-income trap” if it does not find ways to add values, automate production and get rid of foreign workers.

Management loopholes would also cause losses to the national treasury. For example, the Malaysian Anti-Corruption Commission (MACC) found that the country has been suffering RM108 billion of loss yearly but after the fatal fall of a Customs officer from a MACC building, we could hear no more about the development of the investigation.

All in all, there are too many factors causing the national economy to be unhealthy. If they wish to transform the economy, they must first eliminate the factors. If they can, the government could then save up to RM20.5 billion of subsidies and a hundred billion of subvention. The country would then be able to achieve financial surplus and no longer need to borrow money.

However, it is always easier to say than do, particularly when the next general election is about to approach. As the prime minister said, they have to pay a political price to cut subsidies.

If the general election is held at the end of this year, the price of RON95 would not be increased and the walking stick would not be removed in the coming 10 years.

Another factor to consider is, there are signs showing that economic downturn and inflation are worsening. The people’s incomes have not been raised and cutting subsidies at the moment would not help the economy to recover immediately.

Malaysians have been relying on opium and the walking stick for too long. It is indeed not easy to get rid of them! — mysinchew.com