Of boycotting and buying

Question Time By P.GUNASEGARAM (The Star)

EARLIER this week, the former Prime Minister (yes, him, there is only one former Prime Minister now) said that we should boycott everything from the US more or less because of its support for Israel which was (and is) attacking Palestinian Gaza via a series of vicious bombings.

Then the Domestic Trade and Consumer Affairs Minister said that Malaysians should be encouraged to be Malaysians by buying Malaysian – goods and services, that is – because the global meltdown was expected to dampen demand for these.

While at first glance these noble exhortations – or at least nobly motivated ones – seem the right thing to do, their practice is far more difficult, and at the end of the day they are merely symbolic and may even do more harm than good.

Let’s take the proposed boycott of US goods first. The US is a very large economy, the largest in the world. Products originating from the US go into all kinds of things and facilities. Is it a complete boycott of everything US that we are looking to?

If we are, it is a mammoth task. It will hurt our economy and us much more than it will hurt the US and its ally Israel. Take computers. That will mean we can’t buy a Dell or a Mac, for instance, but does that mean we can buy a Taiwanese-made Acer?

Hang on there! What does the Acer run on? Is it an Intel or an AMD chip that is at the heart of the machine? Almost all computers other than Macs use Intel or AMD chips – and what do you know, they are both American. That means we basically stop using computers, right? And we don’t buy Dell, even if it is made in Malaysia and provides employment for Malaysians?

Let’s take another example. Perhaps we should stop using Microsoft programmes – Windows for instance, and Word and Excel. But what’s the alternative? Lotus? Sun? Well, they are also American. Perhaps we should go back to typewriters and calculators – or better still, to spite the Americans, use pirated software.

And is our former PM going to give up CNN altogether and watch and listen to only BBC? But then Britain has not been that helpful either and we may want to boycott their products as well. Then he will have to give up BBC, too, which leaves him with Al Jazeera.

Do we stop using American consultancies? Kenichi Ohmae, a former partner at US consultancy McKinsey was the man said to have proposed the Multimedia Super Corridor – a brilliant plan poorly executed. Do we now require that our government-linked companies use only non-US consultancies?

So, the boycott, made partly at the urging of our former prime minister will be useless, except as a symbolic gesture, because it will not help us. The victims might be the cola companies – poor Coca and Pepsi – because there are easy substitutes.

And if we boycott them only, what would be the point? Besides, it would be hypocritical, because we won’t boycott when it hurts our interests. It would be better not to waste our time on such proposals. Even the US does not boycott Chinese goods although it disagrees with Chinese policies and actions over a broad range of things.

On to the issue of buying Malaysian. An examination of our export composition will indicate that over 70% of exports are electronic and electrical items; commodities including palm oil, crude oil and petroleum products; and timber and related products.

Just how much of these products are Malaysians going to use? Will you and I go out and buy more chips, especially when they are not the variety that comes from potatoes? How much more cooking oil can we use? Or rubber wood furniture?

The Domestic Trade and Consumer Affairs Minister should focus more on real issues.

For instance, both the Australian and New Zealand currencies have dropped by as much as a third against the ringgit, but why is it that we don’t see a significant drop in the prices of dairy, meat and vegetable products from these countries? And don’t tell me existing stocks have to be exhausted, because they should have been a long time ago.

With oil prices having come off so sharply from the peaks, why are those whose costs must have fallen substantially now not passing these on to consumers? Should we be freeing up import licences if current importers are too slow in reducing prices?

One of the few benefits that a consumer gets during a slowdown/downturn is that prices fall because of declining demand. The minister should be focused on ensuring the consumer receives this benefit instead of urging Malaysians to buy Malaysian to keep the prices of Malaysian products up. Our prices must drop along with those of the world!

In tough times like these it behoves our leaders, both past and present, to remind themselves of the basics of economics, and indeed common sense, before making untenable pronouncements. Let’s not cut our nose to spite our face.

P. Gunasegaram is managing editor of The Star. He says boycott the worst in value – Malaysian or otherwise – and buy the best.