Saturday, September 8, 2012

The Cycle of Goodness (the COG)

Give away more money to the people, that boosts up domestic demand, enhances trade and business, government collects more tax, and therefore has more money to give away to the people. That seems to be the long and short of the Cycle of Godness, the COG, that can spin faster to make the country a high income nation.
Sounds good and simple. Yet, many poor and developing countries could not initiate that cycle. Why?

The common answer is: government has no money to give to the people. Yet, the government as we often observe has money to aggrandize itself, supports and is supported by wealthy people living in western-style luxury and comfort, establishes grand embassies with opulent residence and transport facilities..etc..etc..Foreign assistance and aid often flow in enormous quantity, yet fail to reach the needy...
The rich become richer, the poor poorer, was and is still the buzzword. Many development thinkers think that it's not so mush a question of whether there is money to give to the people as the question of HOW government distributes the goodies. Do they reach the rock-bottom, ground level, where the poor scrounge for a living? Giving cash directly to the poor was considered a bad policy. It must be given through appropriate and formal agencies and government organizations. What happened is that the agencies and organizations become rich and colossal monsters devouring the massive allocations (trust funds) they receive. ( Some say even international organizations designed to help the unfortunate people of the world had become such monsters!)

Nonetheless, the COG concept supports giving funds directly to the poor and unfortunate. Malaysia's BRIM 1, 2 and 3 illustrates the point. So do many other "durian runtuhs" programs. Earlier leaders had been very reluctant to give direct handouts including hefty pay rise for the public servants. Result: healthy growth but minimal. Now, PM Najib had reversed the order. The economy seems to be responding in a very positive way.

But, prices of things and the cost of living are also shooting up. Cost of building materials and residential homes and business premises had skyrocketed. Has the government machinery controlling these items been streamlined and charged with new obligations to see that housing developers and real estate dealers are not squeezing consumers and clients to death? Look at the number of "Bank Lelong" notices plastered all around the country. Low cost houses ( link houses and terrace homes)are now crossing the half million ringgit mark. What's the government doing about this or is the policy now: buy if you can afford, otherwise go back to the village?


abdulhalimshah said...

On my visit to Uzbekistan in 1991, the country was just being detached from the apron strings of the USSR, but the new bureaucracy was just a shadow of their former masters. Upon talking to the lower rung officials, they still thought that the former Communist regime was better in the sense that there were very few who had no roof over their heads as the State provided every family a decent accommodation and free housing. I could not see even a beggar on the streets. But I do not know what is the situation now. Probably there are homeless people too, just like in our Federal capital. This is the bane of capitalism, where the dirt poor are left to fend for themselves,despite the existence of the Welfare Dept. who just could not manage to take the dastardly poor into their old-folks home.

norzah said...

Thank you for the comment, Akhi Halim. Missed you for quite a while.
The poor have always been sidelined in many cases where government does not give them a special attention. The bulk of development funds normally goes to those who are able to grab the offer quickly and are able to use the opportunities given by government. The poor often could not even get their hands on the lucrative offer since they are naive and not as resourceful as the people with money to work for them.

So what the poor can get are the direct handouts like BRIM. But how far can RM500 go?