Thursday, July 15, 2010

The right move

Prime Minister Datuk Seri Najib Tun Razak should be praised for cutting subsidies even though the political cost may be high.

Today, he announced that the price of RON 95 petrol and diesel will go up by five sen while that of RON 97 petrol will be subjected to a managed float which will fluctuate according to world prices.

The price of sugar went up by 25 sen per kg and that of LPG was up by 10 sen a kg.

He gave three reasons to justify the reduction in subsidies - the subsidies benefitted foreigners and wealthier Malaysians; the subsidised prices of some products encouraged smuggling; and thirdly "unless the government reduces our fuel and sugar consumption, we face potentially serious consequences as a nation".

Previous administrations had been reluctant to reduce subsidies even though economists and those with common sense could tell anybody who cared to listen that the system and culture of subsidising could not be sustained.

This was because any reduction in subsidies would result in an increase in prices of certain goods which would affect the majority of the population, especially those earning low and even middle-level incomes.

Since this would affect a large number of Malays, previous governments did the politically-correct thing - don't fix it if it ain't broken yet and just passed the buck to some sucker in the future.

But they were just postponing the inevitable - the cost of subsidising has risen so high that the opportunity cost of it is incalculable. If I'm not wrong, the cost of subsidies in the annual Budget is about as much as the amount allocated for development projects.

Much of the Government's revenue comes from Petronas and for the next few years, Petronas can still make plenty of money. But inevitably, the day will come when Malaysians will spend more money on petrol than what Petronas makes from its exports i.e. Malaysia will become a net importer of oil. That is when all hell will break loose.

Top Petronas managers have warned previous Governments about this doomsday scenario before, but previous Prime Ministers did the politically-correct thing - don't do anything and let their successors worry about the issue.

Well, their successor did exactly that - worry about the issue - and he has actually done something about it.

The people will feel the pain, the Opposition politicians will play up the issue, some votes will inevitably be lost, but Najib - like it or not - has done the right thing.

There is an old saying that a stitch in time saves nine. It is very apt for the current situation.

What Najib did will ensure that the finances of the nation will not be in dire straits years from now (when he may not even be the Prime Minister). It will benefit Malaysia and Malaysians.

His move to reduce the subsidies also reveals another thing - the general election will not be called in the next six months or so.

Tuesday, July 6, 2010

Fight for the Malay heartland

The battle is on between Pakatan Rakyat and Umno for the hearts of the Malays in rural areas because this category of voters will decide who forms the next government.

It is highly probable that the Pakatan leaders know they have most of the urban Malays on their side and as the recent Hulu Selangor by-election showed, the rural Malays - who are still tuned to and are influenced by Government-controlled television stations rather than be swayed by the numerous blogs offering alternative news in the Net - are still backing Umno and Barisan.

What Pakatan will try to do is attempt to convince the rural Malays that they have been left out of development and progress that can so obviously be seen in urban areas. Urban folks have benefitted from the Barisan government's hand-outs and projects, etc, and they are far richer and live in bigger mansions than the rural Malays who still sleep in crumbling wooden kampung houses and live a hand-to-mouth existence.

In Hulu Selangor, observers noted, Umno was still strongly supported in the Felda schemes and that was one of the chief reasons that Barisan won the by-election in April.

Thus it is not surprising that Suara Keadilan recently ran a front-page story alleging that Felda is bankrupt.

This is a stab in the heart of the Malay heartland - winning over the Felda settlers carries more symbolic weight as the Prime Minister Datuk Seri Najib Tun Razak's father, the second Prime Minister, was instrumental in creating the Felda schemes in the first place.

Though it is unlikely that PKR can show evidence that Felda is indeed bankrupt, the damage has been done - which is probably the intention in the first place. Plant a seed of doubt and watch it sprout and grow - I think that's PKR's game plan.

Not only that but by having the Home Ministry 'ban' the Suara Keadilan (actually the publishing permit expired and was not renewed), another political issue is created.

The Barisan Nasional government must be wary of such trickery and not fall into cunning traps set by Pakatan.

Monday, July 5, 2010

All mixed up

Malaysia is stuck in a most peculiar situation currently.

Just the other day, I was listening to the radio while driving and the deejays in their community message said something about Malaysians having to live together in harmony and peace, etc.

Back home, I picked up the newspaper and there was a story about Perkasa, the Malay-supremist NGO, urging the government not to bow to the demands of the non-Malays.

Perkasa, which is supported by none other than the former Prime Minister Tun Dr Mahathir Mohamad, has been more actively fighting for the rights and privileges of the Malay bumiputras than even Umno, the political party that is supposed to represent and protect the Malays.

At the same time, the Prime Minister Datuk Seri Najib Tun Razak is still going on his walkabouts, playing Chinese chess with the Chinese and selling his concept of 1Malaysia to anybody who cares to listen.

Perkasa is playing the racial card - something that Umno normally does - and alienating the non-Malays while the president of the Malay party and Prime Minister of the nation is trying to reach out to non-Malays who have been alienated.

The signals are obviously mixed up and if the people are totally confused, can they be blamed?
Who is the average Malaysian supposed to listen to? The racial/racist chants of Perkasa - supported by an ex-PM - or the repetitive assurances of the current PM that the rights of the non-Malays will be protected?

The danger is that the non-Malays may get so fed up and dump both Perkasa and Umno (or the Umno-dominated Barisan Nasional) and support Pakatan Rakyat all the way.

That leaves Umno having to win Malay support to stay in power. And standing in their way will be PAS, the Islamic party that had vowed  to set up an Islamic state in the past but that has in recent times been rather accommodating to non-Muslims.

Are you confused by now? I honestly don't blame you. 

As I said before, the signals are all mixed up.