Bankruptcy in 9 years?
By Hakim Joe
The government is telling me that the country will be bankrupt in 9 years unless subsidies are slashed. Does this mean that there will be no more favoring the Bumiputeras as well? No more wasteful projects and no more bailouts?
No…the government tells me that terminating fuel subsidies is more than sufficient to keep this nation afloat. We can still go on with the crooked scenic bridge if we wanted to or keep bailing out GLCs but retaining the fuel subsidies in a petroleum producing country is definitely a big no-no.
Well, what about the purchase of the goddamned submarine that cannot dive and the helicopters with the reverse signals and side mirrors? What about the bill for the full page advert of the fat imposter who wants to be the Permaisuri Agong and the handouts in the Hulu Selangor and Sibu by-elections? What about Bakun Dam and PKFZ?
According to TDM, Petronas earned hundreds of billions of Ringgit at the time when petroleum subsidies were given to all Malaysians. He should know better since he had carte blanche to the Petronas dollars whilst he was still the Malaysian dictator. Now our present PM tells me that this situation is no longer valid. The country is so poor that they are willing to barter the KTM land for two plots of commercial lots in uptown Singapore.
What do all these spell for the common Malaysian trying hard to earn a decent wage? It means that you will be totally and comprehensively fucked (excusé le French).
One, with our miserable public transportation, it will mean that Malaysians will stay as one of the major users of petroleum in the world, unless something drastic is done to improve it. Fuel consumption is high. The perpetual traffic jams will see to that. Perhaps the use of bicycles as an alternative mode of transportation? Not unless they clear all the kopi-o license drivers from the road and patch up those ravine-sized potholes.
Two, all commodities are tied to fuel prices. One can produce semi-cheap vegetables from the not-so-cold-anymore Cameron Highlands but they require transportation down to where the consumers are. Ditto everything and last time I heard, these modes of transportation require fuel. Add that to the price of these commodities and there you have it.
Three, when the price of world petroleum goes up, Petronas earns more. When this occurs, the government collects more in taxes from Petronas. The PM’s personal Petronas kitty is henceforth also enlarged. With fuel subsidies, it doesn’t mean a thing to the petrol users in Malaysia. Without subsidies, you pay more for fuel as the pump prices mimic the international fuel prices.
With less cash to spend on non-essentials, the national economy shrinks. With inflated prices on just about everything, the inflation rate rises. When that happens, the value of the Ringgit falls against all currencies and interest rates will go up. Market confidence will however go the opposite direction and the quality of life as a Malaysian deteriorates.
Companies will tighten their belts and in come the rounds of instant dismissals and voluntary retirement packages. When jobs are scarce, money is scarce. When money is scarce, the crime rate goes up. When the crime rate goes up, foreign investment takes a dive. When foreign investments dry up, the value of the Ringgit falls. International trade will therefore be lessened. All in all, the shit will hit the fan.
The question begging to be asked is not why the subsidies must be taken away but how we got ourselves into such a miserable situation. Malaysia used to possess one of the most vibrant economies in Southeast Asia. Now they tell us that situation is ancient history and that we are facing bankruptcy within 9 years, not that the time really matters because we are heading there anyway. This round will be the removal of fuel subsidies, what will they take away during the next round of cuts? Will the imposition of VAT be on the cards soon? Will taxation become the chief income earner for the government?
Until corruption is thoroughly checked, whatever income the nation makes will never be sufficient to nurture the appetites of the corrupted. Until checks and balances are stringently imposed, the public will forever be the first to suffer from it.
And then we have a former dictator saying that the construction of his crooked but scenic bridge is still viable…..
