The whipping boy named subsidy

In 2019, if deficits are not managed (spending more than we earn) we will be bankrupt. Jala says that. He's basing this scenario on the growth of our debt and our economic growth rate. Of course he is assuming, the great people of Malaysia and its government do nothing.

It can always do something. It can also adopt the bloodbath budgetary measures. Cut the civil service by 30% from 1.2 million civil servants to 700,000. That would have to mean the 700,000 have to be retooled and re-skilled. Two, higher quality material are absorbed into the civil service. Demand the civil service not be a dumping ground for employment.

No economy can go bankrupt. It can always print money!

But that is not the point. If in 2019 we are a bankrupt nation, in 2020 we are supposed to become a developed nation with average per capita of USD 15,000. Right now, our average per capita is RM23, 000. By 2020, we earn RM 49,000.

Now that will be a record of sorts, Malaysia will become the envy of many nations. IN 2020 MALAYSIA WILL BECOME THE FIRST DEVELOPED COUNTRY WHICH IS BANKRUPT AT THE SAME TIME. Now that is oxymoron embodied.

We haven't been paying attention to managing our assets- liquid and non liquid. Consider the sad case of FELDA. Now, the joker who is presently UMNO's Ketua Penerangan was PM Najib's special officer looking out for FELDA. He hasn't been looking at FELDA carefully.

If he had, he would have noticed the following. Just after the 2004 elections, everyone was elated that DPM Najib as he was then was entrusted to look after FELDA. FELDA was the brainchild of Tun Razak who was influenced by ideas of Socialism when studying in UK. He was influenced by Sidney and Beatrice Webb. He started FELDA in 1956. He and Taib Andak.

At the time when PM Najib took over FELDA, FELDA had 75 oil palm mills, assets of RM 7 Billion and a cash hoard of RM 4.5 Billion.

Plenty of money bwana!

Najib's looking after FELDA was some sort of déjà vu. From father to son. Where else would the gravy drop if not onto the rice? Surely not every drop of gravy spills onto the floor, no?

What has happened since then? The huge cash hoard of RM 4.5 Billion is now only RM 200 Million. So we want to know what happen to RM 4.3 billion. Don't tell me the amount went to the hotels FELDA built here and there and the restaurants FELDA puts up here and there. If this is not explained properly, then those in charge of FELDA can be accused of grand theft. With the record price of CPO for the past few years, FELDA should have cash reserves of RM 6 Billion! 

RM 200 million left is a paltry sum. And FELDA settlers are being misled into believing the assets of FELDA are being looked after diligently. How has the money been spent? It just doesn't mean that with that kind of money, you are allowed to turn a blind eye building an MRSM school which normally costs around RM 40 million for RM 120 million. That's RM80 million cost overruns per scheme. How many schemes does FELDA have? If each scheme adopts the same 'costing', the wastage would run into Billions.

The chairman of Pemandu should be driving us in the right direction instead of deceiving us to believe that our huge deficits are attributed chiefly to this government paying subsidies. The greater leakages bleeding our revenue and earnings are the billions unaccounted for. The internal bleedings in FELDA is a very clear example of how an asset, poorly managed leads to humongous losses and therefore a stronger cause for deficit spending.

Even as the questions regarding the servicing of our submarines (whose constructions are perhaps not finalized yet) remain unanswered, we are told that our government is purchasing special ships for our Navy costing RM 2.2 Billion! But please remember, whether they can sail on our waters. Our density here may differ from the shipyards where the vessels are being built.

That makes a mockery of what the Pemandu people are saying. Instead of austerity drives, we are going to do the opposite. You either ship in or ship out.

But perhaps the right mantra is spend, baby spend!

But enough of all this foreboding and depressing talk about subsidies. Let's listen to a joke about economists. They are dangerous people.

Three economists and three mathematicians were going for a trip by train. Before the journey, the mathematicians bought 3 tickets but economists only bought one. The mathematicians were glad their stupid colleagues were going to pay a fine. However, when the conductor was approaching their compartment, all three economists went to the nearest toilet. The conductor, noticing that somebody was in the toilet, knocked on the door. In reply he saw a hand with one ticket. He checked it and the economists saved 2/3 of the ticket price.

The next day, the mathematicians decided to use the same strategy - they bought only one ticket, but economists did not buy tickets at all! When the mathematicians saw the conductor, they hid in the toilet, and when they heard knocking they handed in the ticket. They did not get it back.

Why? The economists took it and went to the other toilet.