Opinion: Doing what is right for the future
ABDUL RAZAK BAGINDA
Mar 7, 2006
New Straits Times

March 7 The Prime Minister comes across as a leader who always has the interests of the people at heart. Although prudent, he realised that the oil price hike would be unpopular and took steps to explain the rationale behind the move, writes ABDUL RAZAK BAGINDA.

IT has been said that doing the right thing is better than merely doing what is popular. I believe this to be the hallmark of a responsible government, a government that thinks for the future and not merely for today.

I feel that this is precisely what the Government has tried to do over the issue of the oil price hike. Knowing that raising petrol prices by 30 sen would be unpopular but at the same time recognising it as the right thing to do in the long run appears to be a prudent step for the Prime Minister and his Government.

Ever since Datuk Seri Abdullah Ahmad Badawi became Prime Minister more than two years ago, I have been struck by his sense of "doing the right thing".

He comes across as a leader who always has the interests of the people at heart, not because he wants to be popular and wants to endear himself to the people, but, I believe, while honesty is very natural to him, he also thinks that it is the right thing to do.

On this score alone, I feel Malaysians should view the price increase in its proper perspective and not be carried away by emotion.

I can understand the unhappiness and reservations of many when confronted with the news of the price increase. Some may even have been shocked.

I asked my regular petrol kiosk attendant about the reaction of his customers. He said that people did not say much because they were just too shocked.

My response was to remind him that the Government is still subsidising fuel, although I know that my attempts to explain fell on deaf ears.

Despite this, the top leadership of the country, on the same day and on subsequent days, came out to explain the rationale for the price increase and also told the public of the plan to set up a fund to plough the savings back for the benefit of citizens, in particular, to improve public transportation, which is seen as a perennial problem.

The Government also announced that a Cabinet committee to be chaired by the PM would be set up to monitor the development of public transportation.

Essentially, many burning questions were addressed by the leaders.

Over live television, Deputy Prime Minister Datuk Seri Najib Razak faced the Press and addressed the concerns of the general public.

One question was over the quantum of the oil price increase, as opposed to an incremental increase, as on previous occasions. Surely it is better to pay one price increase and make the necessary adjustments as opposed to several which, in effect, amounts to a higher overall increase.

At the same time as announcing the price increase, the Government promised that there would be no more price hikes this year, even though this runs the risk of a heavy burden in the event of a global oil price surge in the near term.

I hope the people will try to manage the price increase by looking at the wider macro-economic picture.

One of the bigger public concerns over the oil price increase is that there will be a snowball effect — where other prices such as transportation and some ordinary goods will also see increases.

The Government did address this issue and argued that in reality fuel only forms a small factor of the overall cost.

What I gather from this is that an increase in the oil price should only minimally affect the overall price of products.

But what is important is that, should unscrupulous producers increase prices, the Government should ensure the people have some means to voice their complaints and that the government monitoring agency will take swift action.

We, in Malaysia, enjoy a high standard of living, with a relatively manageable cost of living.

Every time I travel abroad, especially to Japan, I feel that the people’s wealth levels are not commensurate with their standard of living — even though they earn a lot more money.

For example, their homes are very small. Little wonder that many Japanese now leave their country and settle in different parts of the world, including Malaysia, where they can enjoy a much better quality of life.

Under Abdullah, there is a noticeable openness in society. There is much more open debate taking place. More voices are heard, and slowly the veil of fear to speak out is eroding.

However, our views often tend to reflect sectarian or sectorial interests and are perhaps not backed by data, whereas the Government’s viewpoint takes a broader and wider perspective, taking cognisance of a multitude of issues.

This is why, on the issue of the petrol price increase, the Government should be congratulated for its boldness, and its willingness to bite the bullet for the benefit of the country’s future.

Malaysia has long kept fuel prices artificially low. It must be remembered that even with the current price increase, fuel prices here are among the lowest in the region, if not the world.

To economists and financial analysts, high subsidies are a reflection of imprudent macro-economic policies and therefore frowned upon.

Also, as subsidies consume a sizeable portion of the Government’s budget, this will hinder development programmes which bring greater benefit to the whole country.

In other words, by maintaining high subsidies which even the well-off enjoy (the rich, with the many cars they have, benefit more than the average member of the public from the oil subsidy, which is obviously grossly unfair), the needy ones will be deprived of other developmental benefits.

For centuries, generations have made sacrifices in the belief that these would benefit the future.

In history, people have perished for the sake of the next generation. The First World War, for instance, saw millions of people killed, seemingly sacrificed for the sake of the future.

Fortunately, in our case, there is no shedding of blood, no real loss, except perhaps to spend prudently, for the benefit of all future Malaysians.

When all is said and done, the price increase is a very small sacrifice to make for the greater good.

The writer is executive director of the Malaysian Strategic Research Centre.

Source: http://www.nst.com.my/Current_News/nst/Tuesday/Columns/20060307074249/Article/index_html