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Wednesday, January 4, 2017

No, BR1M is not a panacea

We are pretending to help the people through BR1M when we close both eyes to the inherent unfairness and exploitation in the system.
By TK Chua
The piece, “Of BR1M and Malaysia’s political landscape” by Khairul Azwan Harun was an interesting read. He was thoughtful in his own way.
I do not know whether he realised it or not, the first few paragraphs of his essay more or less summed up Malaysia’s low productivity, low wage and high cost of living conundrum.
He ought to begin asking why there are millions like that “person” he described in his essay – unable to make ends meet despite working full time.
Where did the fruits of development go the last three to four decades? Why despite the enclaves of opulent homes and marques on the road, more and more are being pushed down the economic ladder?
I am a believer of this: people working fulltime, regardless of professions (yes, including garbage collectors, mechanics, and convenient store cashiers), must be able to earn a decent living. Families with two incomes ought to earn better than a decent living. If they do not, our economic system has failed them.
I think Malaysia must try to tackle the very chaotic outcomes of our development model. The problems we face are structural, ranging from unemployable graduates, big and ineffective government, to total lack of decent and affordable housing.
We can’t argue also that GST is to enable the government to pay BR1M. That is oxymoronic. GST has also allowed the government to continue with its profligate way.
No one is disputing that BR1M is able to provide temporary relief. But BR1M can’t solve structural problems. BR1M is like giving Panadol to someone with a brain tumour.
Malaysia must seriously look at economic models that are successful. Piecemeal reference to certain economies is not useful.
Brazil is known for its inequality, despite its “family allowance” programme. Japan’s package was more for stimulus and investment, not really an economic aid. IMF is not a sage, as its dispensation has often given rise to more problems than solutions.
Cash transfers through BR1M are not redistributive justice. Cash transfers can’t significantly and sustainably change the life of the recipients.
If we truly want redistributive justice, the economic system must preserve the value of the ringgit, restrain the cost of living, provide good paying jobs, raise income, and encourage high savings and investments.
Inflation is one of the crudest ways of people being robbed of their savings. Imagine the value of money one put in EPF 30 years ago and the value now.
As for Malaysians becoming too politicised, I think this is inevitable. For too long, the system has not allowed open debates and meaningful reforms to take place.
Even for people who are apolitical, they too are getting fed up with the same nonsense being dished out ad infinitum.
Despite respected growth achieved, we have allowed the system to become too exploitative. Privatised entities, monopolists, business people, government suppliers, contractors and consultants are getting way too much.
Ministers, public officials, and senior government servants are enjoying too many privileges for doing little.
In actual fact, we are pretending to help the people through BR1M when we close both eyes to the inherent unfairness and exploitation in the system.
There is no free lunch in this world. Someone must bear the cost of exploitation and unfairness in the system.
BR1M, no matter how justified in the interim, should never be a permanent feature in our economic management. We can’t transform our economy through BR1M; on the contrary, we are going to dig ourselves a bigger hole.
TK Chua is an FMT reader.

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