Politically Correctness And Bad Economics

Prime Minister Datuk Seri Abdullah Ahmad Badawi calmly accepted the fact of loosing five state regimes in the general elections. He said: “I've heard the people's voices.”

As he has heard it, he should respond to it and take actions. Not to increase fuel prices for the moment should be one of the changes made after he has “heard the voices”. But how long could it be?

International crude oil prices keep surging to near US$100 a barrel and if it keeps on rising, I suppose fuel prices in the country will be as well increased soon.

"Ultimately, no confidence will result in a tsunami that strikes with an earthshaking power."

Malaysia is an oil producing country. The people are used to rely on fuel subsidy (it is said that last year's subsidy was up to RM25 billion). Any reduction or elimination of the fuel subsidy will definitely get angry reactions from the people.

The government kept telling us that the upsurge of oil prices which led to inflation was a global issue that was not under its control. However, isn't it the responsibility of a good government to convince the people and at the same time, come out with a solution to control inflation?

In fact, the idea is very simple. Since Petronas is a state-owned organisation and it has gained profit of over RM40 billion last year, why can't it just appropriate some of its profit to subsidise the people? Besides, Petronas was so generous to invest over billions of money to help privatised companies like Bumiputera Commerce Bank, MAS, Indah Water and Light Rail Transit (LRT) system.

As the people see various unreasonable phenomena and numerous scandals occurring while they are facing with heavy life pressures, naturally, they will have complaints and worries about some “economic myths” in their minds. Unfortunately, when the people were suffering financial pressures, the government told us that our inflation rate was merely 2%, how could the people believe that?

When the people do not believe what the government has told them, discontentment will start emerging and eventually, the people will have no confidence in the government. Ultimately, no confidence will result in a tsunami that strikes with an earthshaking power.

Frankly, it is not easy to be the government. Because the government cannot ignore the public opinion but it is not absolutely correct to blindly follow the people's will to counter inflation by keep providing subsidies. Maybe we can say this would be a correct political decision but a bad economic one. It would be a severe task to find a balance between the two. (By LIM MUN FAH/ Translated by SOONG PHUI JEE/ Sin Chew Daily)

( The opinions expressed by the writer do not necessarily reflect those of MySinchew )
MySinchew 2008.03.27

 

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