Wednesday, December 22, 2010

POLITICAL ECONOMY: Why I am Against Subsidies

I am against subsidies because people should learn that they need to pay for the actual cost of things and get away from the handout, subsidy mentality that is currently so pervasive in Malaysian society.

Once people accept this, we will have less consumerism and materialism in our society because people will learn to live to fulfill their needs, and not their wants. They will learn to live within their means.

Petrol Subsidies
When we have subsidies, money is taken from all tax-payers to subsidize those who consume the goods that are subsidized. It is grossly unfair that tax-payers who use public transport to be subsidizing all those fat cats, Datuks, Tan Sris, and aristocrats in their Mercedes, BMWs, Brabus, Porsches, Roll-Royces, Bentleys and what not. Those who drive luxury cars should be able to afford to maintain them and that includes buying petrol at market prices.

Kalau tak mampu, jangan nak berlagak macam boleh mampu.


Sugar Subsidies
As a nation, we already consume too much sugar. The incidence of dental caries, obesity, diabetes, renal failure is on the rise and constitute a demographic and social time bomb for our country. There is absolutely no nutritional reason why we should drink canned fizzy drinks when all that our bodies need is potable water. One reason why we consume too much sugar is condensed milk. With its high sugar content, condensed milk lasts longer than fresh milk and that is why its use is so prevalent in mamak stalls, in teh tarik, and etc. Reducing subsidies on sugar and implementing a "sin tax" on condensed milk is an idea we should consider to address this issue.

Flour & Rice Subsidies
Together with sugar, salt, milk and salt, flour and rice constitute the Six Deadly White Sins of nutrition. If you need to subsidize, subsidize unpolished brown rice and wholemeal flour (such as attar flour for making chapati). These have the virtue of being nutritious. In Korea, only unpolished rice is sold and as a country, they have the lowest incidence of bowel cancer in the world. This will change the eating habits of Malaysians for the better. People may grumble in the beginning but when they reach 80 and have not been diagnosed with bowel cancer while their white-rice- and white-flour-eating friends have long been buried, they will thank you in their heart.

While milk is recommended for growing children below 18, once people have reached their full height, there is no nutritional reason why we should be drinking milk. Cow's milk is designed by nature to be drunk by calves, not baby or adult humans. There are other sources of calcium for adult females to partake to avoid osteoporosis. Eating prawns together with their shells, as I do, is one of them. The evils of a high sodium diet are well known and need not be elaborated on here.

Conclusion

Tell me why the rest of the tax-payers need to subsidize the top 10% richest people in our country?

"Quando dou comida aos pobres chamam-me de santo. Quando pergunto por que eles são pobres chamam-me de comunista."


What Can Subsidy Money Be Used for Instead?

Wages can only be increased in tandem with an increase in the education level of our workforce.

If you look at low-production-cost countries, they are where they are because they have a large population, with low education levels. These countries produce commodity items with low value-add. They survive on razor-thin margins based on high volumes of production.

On the other end of the spectrum, we have the high-production-cost countries which produce high value-add products. They can produce high value-add products because their workforce are at a higher level of education and can produce Intellectual Property. I'm not just talking about knowledge workers in the IT industry, but about their workforce as a whole. For this, they are paid higher wages. The products they produce costs more as a consequence of this and other higher-cost factors of production.

The way forward for Malaysia, to get out of the poverty trap, is to have a higher educated population. The government should spend more on education and less on military spending. Get rid of the Navy and Marine Police and replace it with a Coast Guard that combines search and rescue missions with border controls (keeping out illegal immigrants and smugglers). Give them fast patrol boats and helicopters and reconnaissance aircraft ~ not submarines that can't dive and ocean-going ships.

There is no bogeyman ~ the war is on poverty and corruption, the enemy within.

I advocate free education for all Malaysians (note I did not include Indon, Rohinga and Filipino illegal immigrants), irrespective of ethnic background, to the level of their ability. If they are good enough to get a place, they are good enough to be given free tuition fees, even up to PhD level.

The questions we face now are:
• What do we do with these illegal immigrants? Do we kick them out? Will their country of origin accept them?
• What do we do with their Malaysian-born children?

It is too easy to say let's kick them out, they are leeches on the rest of us, the "real" Malaysians.

The long-term solution, albeit unpopular and expensive, is to assimilate them and invest in their education, health and welfare as we do for all Malaysians. Human resource is something every government has a moral and civic duty to invest in. When we invest in the education of immigrants, we invest in our future as they are our human resource. When we invest in the healthcare of immigrants, we also invest in our healthcare, because we prevent our whole population from getting communicable diseases.

When we deny immigrants medical treatment for conjunctivitis, tuberculosis, dengue, malaria, influenza, STD, and etc, we are spreading these diseases to the rest of the population.

After all, national borders are an abstract construct and political nicety. It is only an imaginary line drawn on the sands of time.

So, some of the real questions facing us are:
• By what criteria do we decide which illegals to kick out and which to assimilate?
• How are going to pay for the education, health and welfare of those we decide to assimilate?
• How do we do this without opening the floodgates to more illegal immigrants?
• What about legal immigrants? Are we going to discriminate against them because they are of the wrong religion? Are we going to discriminate against foreign wives because they are Shia?

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