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.
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?