Surviving The Coming Hard Times!

I received the following article in the email. It says that it is written by a Stanley Koh who is "Head of MCA Research Unit". This article is going around the Internet and no one has refuted it thus far. I am a little surprised because the writer is asking people NOT to vote for the Barisan Nasional.

I hope the MCA and / or Stanley Koh can throw some light on this. Do you really mean this? If you clarify, I will be obliged to carry your clarification.

However these are just someone's thoughts. It is not a crime. In fact some of the points are quite sound and valid. It is just that polirtically how does the MCA take such a stand while still within the Barisan Nasional?

My comments are added at some places only.

By Stanley Koh

(MCA - Head Of Research Unit)

It turns out that the government you voted in will not hold your hand to see you through hard times. Instead, it will make sure to add to your suffering because that is the easiest way it can avoid going bankrupt.

Barisan Nasional has apparently decided that the time has come to remove or cut subsidies — the kind of subsidies that poor people depend on, not the kind enjoyed by big corporations and monopolistic suppliers of utilities and infrastructural support.

(My comment : there is some truth in this. UMNO right wing Blogger (arent we all) has pointed this out that subsidies to major corporations including Air Asia run into the hundreds of millions of Ringgit. Even when these corporations make hundreds of millions of Ringgit in profits)

So what is the use of a government that will eagerly shake your hand during election time but will not hesitate to pull the rug from under your feet when it needs to save itself?

Few believe that the removal of subsidies on essential food items and fuels can save the Malaysian government from possible bankruptcy. If it does go bankrupt, it will be because it has failed to cleanse a corrupt system. It is better for Malaysians to be rich and to control a bankrupt government than to be poor and controlled by a corrupt government. Many countries have rich citizens with bankrupt governments.

(My comment : There is terrible wastage in the country. The GLCs are at the forefront of blowing money by the billions. The GLCs have surrendered their brains to the 'con-sultans', do read on. However I dont think the Government is in imminent danger of going bankrupt. Petronas still brings in the money. However we are beginning to hear strange stories about Petronas too. Helicopter charters that cost RM6000 per trip to fly to the oil rigs in the sea is one recent complaint).

You do not need an economist to tell you that RM100 in Malaysia today does not buy as much as it did last year.

In what we may call the Malaysian Misery Index, we can see that food prices have been spiralling upwards for years. For example, fresh tenggiri, which was RM13.23 a kilo in 1997, now costs

RM40 a kilo. A roasted duck cost RM13.47 in 1997, but is now at least RM38. And Malaysians have become used to the doubling in price of some food items during festive seasons.

Most Malaysians do not expect the situation to improve. Food prices will continue to go up and there is little hope that they will come down again.

(My comment : Food prices are going up the world over. Dont blame the Barisan Nasional Government. Even in squeaky clean and super efficient Singapore, the PAP lost 40% of the popular vote because the cost of living is going up. My concern is what are the Government's programs to increase the productivity and new wealth generating capacity of the people so that they can cope better with the rising costs? No Government on earth can stop prices from going up. Dont blame the BN Government entirely).

Two years ago, the BN government announced that it had set up a US$1.25 billion fund to increase food production and that it was targeting 100% self-sufficiency in rice consumption. What has happened to the fund and the target?

(My comment : I have some info on this. In 2008 when the price of rice shot up, there was a plan to plant 30,000 hectares of land in Sarawak with paddy to make us self sufficient in rice. The GLCs engaged 'con-sultans' who told them that the Sarawak idea would not generate a good return on investment. The idea was shelved. The alternative was that the GLC plant paddy in Sulawesi in Indonesia !! I could not believe this idea. Thank God that idea was shelved too. Why not just plant paddy in Thailand, the world's biggest exporter of paddy? Or better still why not just buy the paddy from the Thais? Apa beza if we plant 'our' paddy in Sulawesi? If we want to increase rice production, please ask the rice farmers, including those guys in Sekinchan, 'What do you need to increase your paddy output? That will be a good starting point. Apa susah sangat?)

Double Whammy

When the GST (goods and services tax) is fully implemented in 2011, it will be a double whammy for poor and middle-income households, pensioners, the unemployed and single parents.

Some have argued that imposing GST on Malaysian does not make much economic sense when only 6.8% of the population are taxpayers and a large majority earn low incomes. Furthermore, it is acknowledged that most of us are paying hidden taxes in highway tolls and electricity tariffs.

Indeed, the future looks bleak.

(My Comment : I agree with this point completely. We certainly do not need the GST at this point in time. Yes it is a consumption based tax but is the suffering working man's consumption going to increase anytime soon? No. He still consumes his nasi lemak and his teh tarik and pays RM2.50 for his breakfast. But with the GST, his nasi lemak and teh tarik remains the same but now he will have to pay more. Scrap the GST ok).

Yet, quite a number of us are gullible enough to think that the government will protect consumers. Are we not being stupid? Isn't it better to be wiser and brace for tougher times ahead?

Instead of believing the promises of a government that has a dismal performance record, we should believe the law of inflation, which says, “Whatever goes up will go up some more.”

Ronald Reagan once described inflation as a violent mugger, a threatening armed robber and a deadly hit man. In the Malaysian context, that is an apt description not of inflation, but of the BN government’s behaviour and policies.

So how do we fight the inflation of food prices?

Economists generally agree that the average Malaysian household spends about 75% of its income on food. Food price hikes will therefore have an adverse impact upon disposable income and force us to make a lifestyle change.

To Fight Inflation

Here are some of the things we can do:

·Stop eating at expensive restaurants.

·Boycott traders, hypermarkets and hawker stalls that charge unreasonable prices.

·Shop intelligently for value and do not be too impressed by branding.

·Work out a budget before buying. Look out for special sales.

·Prevent wastage by not buying more than you can eat.

·Tell friends and acquaintances about shops that charge excessively.

·Avoid buying expensive beverages or foodstuff and find alternatives for nutritional value.

·Boycott chained markets and fast-food joints. They are monopolised by a few large companies and can therefore raise prices at whim.

Perhaps economist Milton Friedman was right when he said, “If you put the federal government in charge of the Sahara desert, in five years there will be a shortage of sand.”

Malaysians do not take the official Consumer Price Index (CPI) seriously. They know it does not accurately reflect price rises in essential foodstuffs.

Many suspect that the government uses it as an instrument to deceive the public into thinking that things are hunky-dory when they are not. The government develops statistics so that the inflation-weary public would direct its hostility towards businesses, and not blame official mismanagement.

(My comment : I agree. The Government must stop making a complete fool of itself by saying that the CPI has only gone up 3.5% when chicken price alone has gone up 30% from RM6 per kilo to RM8 per kilo. The Government does not capture basic food items in the CPI ?? They use some weird measure that captures 500 items like tractor tyres, car batteries, spent plutonium etc that has little or no connection with reality. Please fire the 'con-sultans' and talk to the people.)

The average household consumption expenditure over the last 20 years has increased by 181.8%. In 1973, it was RM412. By 1993-94, it had gone up to RM1,161. In 1999, it touched RM1,631.

According to Professor Lim Teck Ghee, real household income has been growing, but at the snail-pace rate of 0.9% per year. More than half of the population are in the low-income category.

Today, a family of five spends 50% to 60% of household income on food compared with 20% in 1998 and 15% in 1988.

Not long ago, there was official acknowledgement that 95% of families are finding it hard to cope with the rise in food prices.

In fact, the biggest failure of the Ninth Malaysia Plan is that it did not help Malaysians improve their quality of living. Inflation, whether it is imported or locally generated, raises the cost of living and lowers the quality of living.

'Why Not Change The Government?’

In 2006, when Najib Tun Razak was Deputy Prime Minister, he asked Malaysians to change their lifestyle in the face of the rising cost of living.

A blogger by the name of Chong wrote in response: “Perhaps, the Prime Minister should have done some simple calculations himself. People like us basically have no lifestyle, just merely surviving with our earnings. So how are we going to change (our lifestyle)?

“Inflation has gone up 4.5% (and above) and the government is pushing the cost of living higher by increasing electricity tariffs, but our income remains the same.”

Others felt it would be easier to change the government than to change a non-existent lifestyle.

“Instead of listening to Najib asking us to change,” one critic remarked, “Why not we change the government at the next general election?”

To me, that makes a lot of sense. Any government that is willing to build air-conditioned toilets around a city at more than RM100,000 each has no business planning a national economy.

When such a government decides to cut subsidies, many of us will wonder whether the so-called “savings” will instead go towards more majestic arches, fanciful lamp-posts, refurbishments of VIP residences, luxurious government bungalows and fruitless overseas trips by ministers.

Any government that stands accused of having wasted RM320 billion in 20 years — through corruption, wastage and mismanagement — definitely does not deserve to be re-elected.

(My comment : I beg to differ. Even squeaky clean Singapore cannot control high food prices, high house prices. I want my Government to change things and amend things but I dont want to change the Government. I dont think PAS or PKR or DAP can pull this country forward. If you vote for the Pakatan, you may as well go and join the Obedient Wives Club and learn to salt eggs. That is what you will be eating. All said and done, we all eat well. That RM1.30 nasi lemak has rice, eggs, ikan bilis and even chicken in it. Malaysians dont realise this but even the layman still eats meat three times a day. Dont believe me come to Jalan Masjid India and see the ordinary folks gorging themselves. I believe we can eat even more. We will have to pay for it though but we must have the capacity to pay. Prices are NOT coming down. Even if you migrate to Australia prices are NOT coming down)