Take it positively ? Again ?

The following is a statement issued by MCA, a component party in the Federal Government of Malaysia. The statement titled “ Look At It Positively”, is the party's political justification in support of the recent price increase in Petroleum in Malaysia. While I respect the political rationale of MCA to justify for the price increase, I also sincerely hope the already implanted “comical misconceptions and misinformations” this country bumpkin has, can be corrected by the bunch of professional men and women of the Economic Bureau of MCA.

I seek forgiveness for my my lack of understanding of economics. But for whatever justifications the MCA and the government can come up to support the price increase, I just want this bunch of politicians to know that, as a hardworking Malaysian, I am seriously affected by this price increase, and I am seriously suffering in Silence ! Please don't ask me to work harder anymore because there are no more energy left in me! Please don't ask me to tighten my belt more because my last belt already snapped ? Please don't ask me to adjust my lifestyle any more because the next level for me is the poverty line.

The bottom line is, please don't make life anymore difficult for me...... My comments are in RED !!!

Look at it positively ( I have been very POSITIVE since birth !!! How much more POSITIVE you want me to be ? )

IT HAS BEEN nearly a week since the Government announced an increase in the price of petrol and diesel prices. ( To me, every year I am suffering from the price increases and its multiplier effects !!! )

Now, perhaps we ought to give the matter serious thought and consider the Government's rationale in making the move. We are sure it was just as hard for the Government to make that decision as it would be hard for us to accept the reality of the situation. ( so you mean to said that the citizen of this country are incapable of serious thoughts and are not considerate to the well beings of the country ? The petrol pumps are the last few remaining places where it does not discriminate the rich, the poor, the skin colours, the faiths, etc. I totally agreed that it is very hard for the Government to remove subsidies from deserving citizens and give it to non deserving citizens. This is not an act of courage but arrogant ! The word “subsidies' is a very derogatory word and it implies the citizens of Malaysia expect handout from the government. The proper word to use here is REBATE. Every citizen is entitled to rebate from the profit made from the natural resources of this country. )

The Government obviously had given the matter much thought and decided that the move just could not be avoided, not unless we want to live in a situation where subsidies will take away a huge part of the Government’s development expenditure. ( It can be avoided ! For example, by removing patronage to the government link companies and by not venturing into commercial enterprises will give the same result of not denting the government development budget. The government should also avoid financial expenses into “luxury” participations such as monsoon cup, F1, etc.)

We are sure it was not an easy choice, but one that the Government had to take in the long-term interest of the country’s economy and a more stable financial system. ( It is always not easy to make choice when factual data are inconclusive ! this is basically an evasive political statement to justify simplistic evaluation of the long term economic position of the country. )

Global petroleum prices had been increasing exponentially since 2002. ( As a net producer of petroleum, so is the profit of Petronas and the derived taxes )

And since last year, the price of crude oil has surged to around US$62 per barrel now, and this is expected to hover around this high level. ( So is the Huge profit derived by Petronas )

While Thailand and Indonesia raised prices in July last year, Indonesia by as much as 126%, our Government had resisted any attempts to increase prices then. Obviously, this cannot go on further. Malaysia cannot be isolated from the international environment. ( Is Indonesia and Thailand a Net exporter of Petroleum. Why not compare ourself with Brunei in Similar capacity ? Please tell me which net petroleum exporter countries that require their citizen to pay petroleum at international price. Thailand does not have Toll but in Malaysia We have to pay toll charge of more than RM 100 from Kuala Lumpur to Alor Setar. The question is, why compared ourself with biased parameters to justify for unpopular actions )

With the continued high global oil prices, Malaysia cannot help but raise the price of petroleum. ( But we are not importing petroleum. This kind of juggernautmic still puzzles me ! With continued high global oil prices, Petronas cannot help but continued to enjoy huge profits !!! )

Even after the 30 sen per litre increase, the petrol price in Malaysia is still among the lowest in the world and in Southeast Asia, except for Brunei. ( The rest of the world import petroleum, while Malaysia is self sufficient and is an exporter. Raising prices is a simplistic excuse to mismanagement of economy ! )

Let us consider the alternative to any increase in fuel prices. ( What alternative ? The only alternative you have is to raise price. Come on, be a bit more creative in creating wealth. Stop using subtle threats !)

Continued fuel subsidies will have far-reaching effects on the economy. ( Another threatening political statement. "far reaching effects" ? Are Malaysian really that stupid ? The only far reaching effect I see here is, if the present government always resort to simplistic approach without taking into consideration of the well being of average Malaysian, they will lose the rights to form the next government !)

The country will be better off spending the funds allocated for subsidies directly in the economy. ( Give me an example of the government spending that is DIRECTLY into the economy. Can pumping of Billions dollars into government linked companies to write-off its debts be considered as an example of spending directly into the economy ?)

Detailed analyses indicate that if the Government continued to subsidise the price of petrol, it will eat into the development budget, thus causing an economic drag. ( Detailed Analysis ? Which one ? Please publish the documentation. Eating into development Budget ? Please also transparently list out all other subsidies that are given out by the government that are not eating into development budget. Economic Drag ? By not giving back the citizens' entitlement of direct rebate ?)

To allow this to happen will go against the principle of good governance. ( Now you are talking about principle of good governance. What constitute good governance in Malaysia ? )

A study by Morgan Stanley estimated that if the money for fuel subsidies were spent in the economy, growth would improve by 3.2 percentage points. ( I can also conclusively state that if the propensity to spend by average Malaysians is reduced by 20% due to removal of petroleum rebates, approximately RM 4 Billions, directly from the economy and unfairly diverted to non productive sector will cause far more serious damages to the economy. So, are you sure you are not quoting Morgan Stanley's study out of context ? )

If the funds were allocated to targeted groups where the multiplier effect is significant, the impact would likely be greater. ( huh, this is the tricky and interesting part... Which target group now the government intend to divert the subsidies into ? Multiplier effect ? Does it really apply here ? Are you qualified to make this assessment ? )

It must be pointed out that even with the increase in petrol prices, vulnerable groups like fishermen are protected as they will continue to be supplied with diesel at RM1 per litre. High oil prices resulted in high price for synthetic rubber, which has resulted in high prices of rubber to between RM3 to RM3.50 a kg. ( By all means, the fishermen must be allowed to continue to enjoy the petroleum rebates. For your information, fisherman catches fishes. I don't see how a fisherman's profession is directly correlated to the increase in Rubber price. )

The price of other commodities like palm oil and timber has also increased, resulting in substantial increases in the income of rural households and better standard of living of the rural hinterland. ( Raising the standard of living is always the moral obligation of the government. Should the higher level of standard of living be negated by raising petroleum prices and its multiplier effects ? By your definition, what constitute a rural hinterland ? Better standard of Living in rural hinterland ? You referring to Orang Asli ? )

For example, a household with a 10-acre plot of rubber land now earns between RM8,000 and RM10,000 per month. ( Wow, if with a small plot of land, the rubber tapper can made a profit of RM 8K to RM 10K month, that should qualified them to the top 2% of Malaysia's high income group. I sincerely doubt you are reading the right column of the statistics ! But anyhow, does revelation of this fact justify the government's actions to increase petrol prices ? )

The point is used to stress that Malaysia has to work within a system in which the country not only enjoys the benefits of high commodity prices, but must also be prepared to adjust to the consequences of paying more for petroleum products. ( System ? what system you are talking about ? political system ? Economic system ? Free Market system, Or selective tempering of Systems ?)

Prudence is perhaps the key word here. ( Prudence ? Agreed totally. We have done our part. But would the government be open enough to admit to the economic wastages contributed by the government machineries ? )

Malaysians, like their counterparts in Thailand, Indonesia and Singapore will have to accept the reality of high oil prices and make the necessary changes and adjustments. ( Accept the Reality ? Which side of the reality you are referring to ? The reality that there are too much wastages in the system to the extend that REBATE are now being reclassified as subsidies and forcibly removed ? Be specific ? )

The fuel price increase is a message from a respectable government to the people that they must adjust their lifestyle and adapt to rising oil prices and to remain competitive and to ensure a stronger economic foundation and financial management in the long-term for the benefit of the people and the country. ( Oooh, So only the government is respectable ? You mean to say that the citizens of Malaysia are not respectable ? Why not the government and its agencies, ministries, and GLC lead by example adjusting their lifestyle and spending ? In addition, how can raising prices be equipped with more competitiveness ? Which school of economics you come from ? )

I bet the same arguments will be used over and over again to justify for the increase in prices of other basic necessities. Isn't it very easy to recycle standard answers ?

With a mug of coffee in my left hand, and a pen in my right hand to write nonsense, I feel like going to the registrar of societies to register an association called Malaysian Conmen Association. Any followers ?

MCA
ECONOMIC POLICY BUREAU,
Kuala Lumpur.