The Malaysian malaise

 

The Barisan Nasional government uses subsidies as a tool to make people dependent on them – a form of crass populism.  

Aerie Rahman, MMO 

Have you ever been to Brunei? I find it to be an eclectic blend between Kelantan and Putrajaya. From the airport to the city centre, Islamic billboards are many – emphasising the Islamic character of the nation.

Swanky government buildings scream of modernity, like those in Putrajaya. The government edifices appear anachronistic next to the private buildings that seem to be frozen in the 70s.

The same goes for oil rich Arab nations. Artificial cities like Doha and Abu Dhabi emerge from the middle of the desert, akin to some grandiose oasis.

These countries all share a certain commonality in the sense that they are petro-dictatorships. The same could be said about Venezuela, Iran, and Russia which have vast oil reserves. I consider them dysfunctional democracies.

Is oil a poison to democracy?

No taxation without representation

While eating at a KFC outlet in Brunei, I noticed that on the receipt there was no tax charge. Apparently in Brunei nobody pays any tax. In Qatar, citizens who are mostly Arab Qataris lead well-subsidised lives – all due to winning the geographical lottery of oil being situated under their feet.

Nevertheless, because people from petro-dictatorships hardly pay any taxes, their demands (if any) for some sort of democratic representation lacks any moral weight. The dictator can simply point to the benefits trickled down to the people to justify his legitimacy. There is enough largesse for all, even for the excesses of leaders.

When the Arab Spring gained traction, it was impoverished and oil deficient Arab countries that were badly affected. Petro-dictatorships simply poured in more oil money to silence any form of dissent.

If someone petitions to offer to pay taxes for some modicum of representation, he would look foolish. The dictator would just use the petition as toilet paper.

To appease the masses, petro-dictatorships spend tons of cash on infrastructure. The exterior of the nation is beautified to demonstrate that the money is channelled properly. Subsidies are increased in order to bribe the people.

The trade-off for this populism is, unfortunately, democratic institutions and values.

You don’t need money to have representation and accountability. All you need is the will to do so. But money funnelled to bribe citizens and quell dissent – by funding the burgeoned security apparatus – is a recipe for an enduring dictatorship.

The relationship between the ruler and the ruled is highly distorted because of oil.

Despite citizens of petro-dictatorships being able to afford education in Western liberal democracies, these values are not internalised because once back in their home nations they have no space, desire or moral authority to demand for elections.

They will be perceived as ungrateful (tak bersyukur) to the benevolent dictator if they demand for change. Sounds familiar?

A Scandinavian success story

Norway discovered oil in late 1969. Despite being awash in oil money, it did not regress into a petro-dictatorship.

This is primarily because a functioning democracy and an educated class (with full appreciation of democratic values) preceded the oil bonanza. Participation, representation and accountability were present and strong.

An efficient administration, an educated populace and firm democratic institutions ensured that the oil money is spent judiciously. Norway had plenty of educated citizens to help staff and regulate Statoil (the national oil company), a free press, well-funded police and impartial courts to prevent corruption.

A citizenry with strong moral scruples guarantees the minimisation of corruption. Laws are dependent on deterrence. Deterrence is a weak concept because if there is a lack of enforcement, the laws would be effete.

However, an educated citizenry with a strong moral compass leads to the people themselves rejecting corruption when in the position to be corrupted. They themselves know corruption is inherently wrong and would reject it due to it being wrong – not because of the threat of laws.

Norway has the highest petrol prices in Europe. The ruling party of the day doesn’t bribe all of its citizens with generous subsidies. Instead, welfare is targeted – focusing on the needy, not the bourgeoisie.

This is in the true spirit of egalitarianism.

Furthermore, education and healthcare is universal. Tertiary education in public universities is free. Unlike in other oil capitals, you can hardly find towering skyscrapers and flashy shopping malls in Oslo.

Investment in people is prioritised, not infrastructure.

Dial MMM for Machiavellian Mahathir’s mismanagement

Our colonial masters left us with a democracy – but not a citizenry with the full appreciation of democratic values. Egalitarianism was and still is non-existent. Liberty was inundated by oppressive laws. The Election Commission is facing a trust deficit.

Let us not forget that after the May 13 riots, Abdul Razak toyed with the idea of a benevolent dictatorship*. The fact that the thought crossed his mind is unsettling. Thankfully, he was dissuaded by Dr Ismail Abdul Rahman who wanted to restore Parliament as fast as possible.

While I agree that establishment of Petronas is a masterstroke by the Malaysian government, Petronas is no stranger to corruption.

The Barisan Nasional government uses subsidies as a tool to make people dependent on them – a form of crass populism.

Populism inhibits much needed reform within governmental institutions. The judiciary was assaulted, detention without trials was the norm and the mainstream press muzzled during Mahathir’s era. Not much protest was registered until the Reformasi storm in 1998.

Oil has been used to manufacture the rakyat’s consent for such a long time – all to maintain BN’s power.

We are demanded to be thankful of the largesse that the government has conferred to us when it’s supposed to be our oil money, not the party’s.

According to the Economist Intelligence Unit:

“For decades Malaysia has maintained an extensive subsidy scheme, expenditure on which has grown from RM4.8 billion in 2000 to RM44.1 billion in 2012.”

Subsidies are also a form of debased populism because it is involves instant gratification, disregarding the latent harms. It is addictive to have low prices of goods. It’s kind of like smoking – very satisfying now, but it’ll kill you in the future.

BN disregarded the latent costs of subsidies which plunged us into exorbitant public debt.

Only now, upon realising the problem has the Najib administration tried to rectify this with their so called subsidy “rationalisation programme”. So all this while, the subsidies were irrational?

Terhantuk baru nak terngadah

The more palpable effects of petroringgits are with the megaprojects spearheaded by Mahathir. Wastages are pervasive. I consider sleepy Putrajaya a white elephant project as compared to dynamic KL.

Lacklustre Proton is heavily protected by the government – all for some vain national pride. Precious resources for public transportation are diverted to this liability.

Former prime minister Abdullah Badawi himself admitted that if he continued with Mahathir’s projects, Malaysia would be bankrupt. Naturally, Pak Lah did not complain about the democratic deficit that is paralysing Malaysia.

Outrageously, oil money is not utilised for free tertiary education. Indigent students like me graduate into mountains of debt while working in jobs with low salaries.

Top notch infrastructures are viewed with pride, supposedly projecting Malaysia as a “first world country.” But we are no different from some petro-dictatorship.

Oil has only served to grease the wheels of one party rule.

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