No one cares that oil and food crises are world issues

Sat with our branch members yesterday, discussing among other things food and oil price. Many argued with our chief that the government should be doing more to subsidize petrol. Granted that many may not agree with how our chief operates and that he should step down (which is a separate discussion), let's put the facts on the table:

• Oil price is highly driven by hedge funds and futures market. The rise has been almost 50% in the market since early this year versus a mere 10% oil stock gain.
• Endowment funds from Harvard, Yale and Princeton are also the culprits. However US congress has passed bills to restrict hedge funds from manipulating the price of commodities.
  
• Yes, we cannot compare ourselves with Singapore but we need to compare ourselves with other oil producing nations. Firstly, our production is a minute 600,000 barrels per day and consumption eats 75% of that. Although Indonesia produces more, close to 1.1M barrels per day, they sell the cheap shit at the pumps, RON90. Of course, income per capita needs to be compared too, and that's a separate issue. That's all about the well being of economics and the purchasing power of the Ringgit.
• Yes, because of the higher oil price, Petronas makes more profit. Profit is reinvested into acreage outside the country. Should we negate growth for the sake of distribution? That's a classic socialist stand and we're not going there I hope. Why should every walk of life enjoy the subsidy at the pumps? Surely there are better ways for redistributing wealth. The impact or efficiency of the current distribution method is a topic of a separate issue.
  
• Yes, because Petronas is an efficient money making machine, Government makes more year in year out. Petronas is in no position to decide how royalty and tax money is spent. That's up to the Minister of Finance. Even the former Finance Minister was against the former PM on subsidies and now he is promising another false hope that he would give back the subsidy if he is crowned PM. Any populist could do that.
  
• Government subsidizes not just petrol, but education (which is close to RM7B a year and that's just up to secondary edu), scholarships, funds for universities, natural gas for power consumption and cooking, palm oil for cooking, LRT, feeder buses for LRT. Funny how the people who benefit from scholarships and tertiary education are the same people criticizing the Government (let's generalize the term Government, we may argue about the difference in leadership present and past, etc). They should join the struggle and not just become arm chair critics.
  
• Suddenly everyone is interested about how the Government spends our money. Has anyone checked the Budget every year? Has anyone read the 9th Malaysian Plan? Has anyone researched the mid term report by Finance Minister at Parliament? How much do you think we need to pay the salary and pension for more than 1 million civil servants? What's the cost of purchasing equipment and gear for our cops and soldiers to protect and serve? Without subsidies, how much do you think a medical checkup for flu would cost? I reckon no one cares.
• We also talked about government efficiency. My take: we can't just blame the civil servants. We should stream line operations and make it efficient; need to discard irrelevant ministries and merge overlapping authorities. The US has 15 cabinet secretaries managing 250 million people, surely we don't need 31 to manage 26M. This requires balls made of steel and strong political will. Obviously it would not happen in a fortnight especially with the fact that although UMNO is the backbone of BN, they are not a big majority and still requires co-operation from component parties. That is the dilemma.
  
• On NEP: if people are against the NEP, what is a better economic solution to stimulate growth? Should we invite capitalism to dinner? Should we let the strongest and fittest run over the mom and pop shops? It's the same argument with globalization.
  

Leaders need to decide how to balance between satisfying party members and coalition members, serving the Rakyat and making the right not popular decisions. These are monumental tasks and for people who are afraid of losing power, it will be near impossible. Many leaders wanting to make the right decisions may not get the right kind of support from within the party, therefore reluctant to. People outside the party refuse to dirt themselves by affiliating themselves to a party.

Branch level will commence their meetings on 19th July. Remember that who you choose at Branch level will impact those at division level, consequently national level. Make the right choice. I have yet to decide on my choice; it's all about the lesser of two evils.

Subsidy Mentality 02

Points from YB Dato’ Shahrir Samad, Minister of KDNHEP, during a debate with YB Salahuddin Ayob, Kubang Kerian on RTM tonight:

Money saved from reduction of subsidy in 2006 was used up with rising costs due to increase in petrol price

• Profit made by Petronas (not revenue) has been reinvested into assets around the world to ensure sustainability of fuel source for at least 1-2 decades
• Money saved from subsidy reduction this year to be used to subsidize food
• PM-in-waiting DSAI wants to lower fuel price by subsidizing, contradicting his stance against TDM’s policy to subsidize fuel during the 1997 financial crisis and wanting to oblige to IMF
• We cannot continually deprive Petronas of growth by burdening it with subsidies, they have done their part by paying royalty and tax to the Federal Government
  
  My points:
  
• Petronas must be allowed to use its resources as it finds fit to continually support our economy and be allowed to compete with the major oil companies, the likes of Exxon and Shell
• The danger of this is that the royalty and income tax from Petronas constitute almost half of the revenue earned by the Government. We must be serious and committed to create a robust 2nd and 3rd engine of growth now before we run out of oil!
• Alternative energies must be studied and researched thoroughly. Yes, these are not popular alternatives to fossil fuel due to economies of scale but does that mean we should just sit around and do nothing? The results of the research need to be shared with the public more often, as I know that numerous agencies are working on this. Nuclear perhaps (the most misunderstood and 'political' energy source)?
• The network of LRT must be extended immediately. The National Physical Plan launched earlier in 2004 must be revisited and progress must reported.
• The government needs to start thinking about decentralizing KL and develop a second satellite city, perhaps Seremban? This will enable people outside of KL to enjoy economic growth and stimulate job creations instead of just relying on subsidies. Also, the city plan must include massive integration of public transportation the likes of New York subway system, Singapore's MRT or London's tube. It is too challenging to integrate that in KL.
• Taxi drivers must be allowed to charge more and especially during peak hours.

Then again, whatever the government does will be condemned. The construction of Twin Towers and F1 circuit were known to be wasteful, now they are deemed as icons of Malaysia. TDM was heavily criticized during his premiership, dubbed cruel and undemocratic. Now people 'miss' him being the PM. Can you ever win with the Malaysian people? No wonder we are far behind.