Wednesday, May 18, 2011

Scrapping Fuel Subsidy A Painful Reality

The full text of my interview is reproduced herebelow:

‘Scrapping fuel subsidy a painful reality’

by Raymond Tan. Posted on May 18, 2011, Wednesday

SIBU: Hotel manager Tony Hii, a holder in Bachelor in Economics, agreed with the prime minister that diesel subsidy is like opium.

He said Malaysians had indeed been “addicted” to cheap commodity prices for too long, and this had been made possible at the expense of nation building.

He said people around the globe were paying much higher prices, and Malaysians had to learn to break free from this “addiction” for the country to grow.

“It might be painful, and the people might fume, but we have to take the lessons like in Indonesia, where the people and the government have recently gone through the same painful process to break free.”

He said Malaysians had been relying on subsidies, not only in fuel, but also in commodities like sugar and others.

“When we keep enjoying the low prices, the government has to keep on pumping in more and more money in the wake of the global price hike.

“So, instead of channeling the money to build the nation, the government is sacrificing it for the enjoyment of the people.”

Hii said whenever the government tried to lessen the burden in slashing the subsidies, the people would fume.

“This is not how the economies in Singapore, Hong Kong and many other countries are working.

“Even Indonesia has awakened from this, and when the government announced the lifting of the oil subsidies three years

ago, the people also protested.”

He said in the end, the Indonesians had to face the reality and get used to it.

Hii was aware Malaysians had been giving the excuse that ours was an oil-producing country, and the people were entitled to enjoy the right to cheap oil.

“The truth is, we might be the net exporter of oil now, enjoying the revenue from it, but, if we do not make discoveries of new oil sites, our oil might run out in another three years; by then, we shall be the net importer of oil.”

He said this was what the Indonesians were experiencing, and the government had no other alternative but to announce the cut in oil subsidies to save the country.

He said it was the correct approach to lift the subsidies so that the people and the government shared the burden, like in so many rich and poor nations.

“But, this should be done on the condition that the Malaysian government will use the money wisely saved from the subsidy cut, like channeling it to eradicate poverty, build more infrastructure to improve the living standard, etc.”

He said Idris Jala had recently made the shocking statement about Malaysia going bankrupt in another decade if we did not cut back on subsidies.

“Idris was speaking the truth. No country can afford going on with the subsidies in the wake of the global price hikes.”

He said in oil importing countries like Japan and Germany, the government was instead teaching their people about oil efficiency.

“More countries are doing that not only for economics handling, but also for saving Planet Earth from global warming and for creating a cleaner and greener environment.”

He said many countries had turned to alternative power like in building wind and solar power sources of energy to minimise oil consumption.

He said Malaysia should follow suit; many drivers on the road were just too wasteful on petrol, and this had happened because Malaysia’s oil was cheap.

“Indeed, food and oil prices are rising. The people, or for that matter, the world must learn to live with it, with the government taking the leading role.”

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