Sunday, June 24, 2012

Are We Reviving the Subsidy Mentality?

Close to a general election the government - any government for that matter - will be in the mood to woo public support with a lot of financial assistance and monetary gifts. Ask in the spirit of the election campaign or a protest movement, and thou shall be given. This is in addition to a spade of citizen-friendly projects and programs stretching beyond the life of the current government, to ensure that it will be voted back to power.

This is a political culture of the world and there is no way of hiding the fact nor should we feel ashamed about it.

But in as far as as Malaysia is concerned, the people especially the Malays, had just been salvaged from the subsidy-mentality syndrome. There was a time when everything has to be subsidized by the government to allow the lower income group to catch up with their more prosperous friends and neighbors. There was a time when every little development project to be undertaken by villagers needed government support and financial assistance.There was a time when there was a quota reserved for the the less privileged community - the Malays- in almost every aspect of government policy from public housing to study awards and places in the universities.

That time is now gone. The poorer Malays in the rural areas are now expected to buck up and compete with the other economically more advanced communities. The subsidy mentality was to be wiped out and replaced by a more self-reliant and progressive attitude.

But now the financial assistance programs, a new form of subsidy though they sometime involve a once-over programs, are back. Students have been given an RM100 assistance and an RM200 book coupon to ease off the financial burden of their parents. BRIM I had given an RM500 hand-out to those earning less than RM3000 pm and there is a promise of BRIM 2 and3. Many funds have been set up to help the SMS entrepreneurs and petty traders. Just announced is a program to supply a pair of new tires per year to registered taxi drivers.

And what is little known except to the economically educated population of the country, several Banks, Commercial Houses and Business Enterprises have been receiving huge assistance and bail-outs ( in other words subsidies) from the government to keep going. The government, i.e. the public, are now subsidizing the money-earners and wealth-spinners of the nation which are supposed to help the public. And these private sector people boast of high salary and huge bonus every year - salaries and alliances which the government cannot match.

So, are we not reviving the subsidy mentality not only among the lower income and less progressive people but also among government-related institutions, companies and business bodies in the country? There is certainly a case for the former. But do we have a case for the latter whose executives live in palatial homes, drive luxury cars and be regarded as corporate executives?


kaykuala said...

Akhi Norzah,
As a principle a subsidy is inappropriate as it runs against market forces. As such if given it breeds the evils of black market tendencies,abuses of controls and distribution and profiteering that lead to rise in price(case in point,the recent tyre coupons abused by tyre sellers who raised price of tyres)

These negative consequences would come into play as what can go wrong will go wrong.
Political expediency demands a subsidy culture to still be on, so it is! The ills will show as and when!


norzah said...

As a rule subsidy should be given to the very needy and those going for it must suffer the taint of ignominy that goes with its request. Like the BRIM offer, at first some people felt ashamed to apply for it but when the "malu' factor disappeared, people with an income of <RM3000 also applied and succeeded in getting it. The diesel subsidy and all others given by government tend to be misused to enrich the profiteers. And subsidies can take many forms to justify the draining of the public

That's the kind of subsidy that can be construed of as a political expedience, Akhi Hank, which I think is draining the wealth of the nation. While no one in his right mind would object to giving financial assistance and subsidy to the needy, they should not take the form that allow them to be sidelined by the 'fund manipulators'. Otherwise the country's debt will increase by leaps and bounds.

Al-Manar said...

With or without subsidy mentality the laziness among the kanpong folks, followed by their children is noticeably seen pushing this group backwards. It worries me to see the attitude of children coming to my tuition centre.

norzah said...

Thank you for confirming that the "laziness" syndrome among rural folks still exists as exhibited by the children who come to your tuition center, Akhi Al-Manar. With the subsidy mentality I'm sure that this attitude will either be enhanced or rekindled.
Is government's sudden resort to giving outright cash aid and financial assistance to the low income group - and most alarmingly to the supposedly rich corporate sector which got into trouble through affluent and unscrupulous spending - appropriate in curbing such subsidy oriented attitude?
Is the wealth created through raising the cost of development projects to cater for "pay-offs" to the project initiators ( often initiated in the name of political expedience), a healthy way of raising the income of the nation? Is the productivity of the nation actually enhanced by the money politics?
These are some of the issues we must face squarely if we are going too become a truly developed nation.