Water oh Water

Here is an interesting article concerning water problem in Malaysia.
I like the suggestion that we all should take example from our forefathers, collect and store rainwater for our use.
I grew up in a village, back then we didnt have piped water. So my parent collect rainwater into big drum and tempayan. Those water would be used for drinking and cooking food. As for washing and ablution, we used water from our well. Our land was formerly paya bakau wetland, so the ground water is salty.
Malaysia has high precipitation, but sadly most of the water is wasted down the drain. Collection of rain water could help in reducing our dependence on water companies.

Brace for water shortages

By DEVID RAJAH AND SA’ODAH ELIAS

PETALING JAYA: Many of the 189 river basins nationwide are in dire straits.

This warning from Department of Irrigation and Drainage director-general Datuk Keizrul Abdullah may sound extreme, but that is the reality of today.

Parts of the country, particularly the Klang Valley, he said, would be facing a water crisis as early as next year unless the agencies concerned and the people started taking serious care of rivers.


WASTE EVERYWHERE: A collector scooping up plastic bottles discarded into Sungai Selangor. The boom which stops rubbish from flowing downstream into the nearby Puncak Niaga Water Intake Station has not been cleaned for months.
“On one hand, we have river basins overburdened by problems brought about by over- development. On the other hand, the number of people dependent on these rivers keeps rising because they are attracted to the development.

“That is a recipe for disaster,” he said.

Keizrul described the problem facing the country as “a classic situation where rivers are under pressure from development.”

“We get sedimentation, we get floods, we get pollution, yet we are also taking more water from rivers, so there is less volume and in the process, the pollution gets more concentrated,” he said.

Apart from the Klang Valley, he said, water supply crises were also imminent in Penang and Malacca.

According to him, the situation was compounded by dry weather flow problems and inefficient management of water resources.

“Dry weather flow problems are particular to river basins that are over-developed as they have less ground water storage due to drainage systems that efficiently send rainwater direct into rivers and then literally to waste in the sea,” he said.

The increased water run-off – not only in terms of volume but also speed – contributed to flash floods, high sedimentation and shallow rivers, he added

“Unless this problem is tackled, there may come a time when some of our river basins will not even have enough water to reach the sea during the dry season, let alone provide water for household needs.


RIVERSIDE DUMP: Construction debris dumped along Sungai Selangor is also a source of river pollution.
”Some river basins providing clean water to the people are already reaching their limits,” he said.

Water demand for Selangor and the Federal Territories is now 2,500 million litres per day and the figure will double by 2010.

The authorities, Keizrul said, must come up with more comprehensive programmes to rid water catchment areas of polluting industries, introduce better development guidelines and control, and put in place better water management systems.

“And the people must stop treating our rivers like toilets,” he said.

Given the current situation, Keizrul said, it was high time good river management be given high priority as over 97% of the country’s water supply came from rivers while only 3% was sourced from ground water.

In view of the looming disaster, he said, the people must do their part to complement the Government’s efforts by using water efficiently and not treat rivers as dumping grounds.

“For instance, they can start by collecting and storing rain water like what our forefathers used to do and use this for washing and flushing toilets,” he said.

Keizrul also urged the Government to raise water tariffs so that the increased revenue could be used to set up a river fund to rehabilitate rivers.

“Before people get angry with me by claiming that this will burden the poor, let me also suggest that since water is a necessity, let the first 10,000 litres be free, but the tariff for usage beyond that be double the current rates,” he said.




Tomorrow: Floating landfill at Batang Berjuntai

Tun Mahathir's Solution: Raise Exchange Rate

Title: Tun Mahathir’s Solution: Raise Exchange Rate
I admire Tun Mahathir for suggesting a solution of our petrol price hike. It sounds compelling and easy; let our ringgit rise in value, and there will not be any need to subsidize petrol.
Let examine the facts that ours is an open economy with free floating exchange rate to some extent (managed float, whereby Bank Negara intervene to promote stability). There are several ways of raising the real exchange rate some of which I shall outline here:
1. Increase local investment, or in economic terms, fiscal expansion without monetary expansion. Government shall borrow money in local market and invest in infrastructure, school, hospital etc. As a result, interest rate will rise, and foreigners will be attracted to invest in local money market, as money flows in, real exchange rate will rise.
2. Monetary tightening, as opposed to loose monetary policy at the moment. Bank Negara will increase interest rate well above the world market, and again as a result, foreigners will invest in our higher returns, and real exchange rate will rise.
3. Bank Negara would simply bid up our ringgit and spend our foreign reserve, which can be done under the guise of managing our free floating ringgit.
All of the above methods will result in higher exchange rate, but will result in lower export, because higher exchange rate will render our exports less competitive. Our balance of payment might result in deficit in the future. That is still okay, but our uncompetitive firms might also lose business and close down, which would eventually result in higher unemployment.
Another side effect of the first two is higher interest rate, which will result in lower private investment and cool down the economy in the medium term. Individuals would postpone their investment in housing and durable goods (stuff that you have to borrow money to buy), demand slows down and inflation would be lower. Some people in the export sector might lose jobs, as our exports become less competitive.
As for Bank Negara bidding up our ringgit in the foreign exchange market, that is a risky proposition, currency speculators would have a field day once our intention is known.
One possible way to raise exchange rate that is contrary to our commitment to WTO and AFTA is to erect protectionist trade policies such as a ban on imported cars, textile, electronics goods etc. For example a ban on imported beef would result in higher local prices for beef. This in turn would encourage local farmers to produce more beef. Because we saved money on beef which otherwise would have been imported, the demand for net export would rise, hence exchange rate would rise as well. When exchange rate is higher, some export sector would be uncompetitive and lose business. This would result in unchanged net export position. Resource allocation would shift to protected industries. Instead of moving forward and liberalizing our trade policies, we would be moving backward.

Whether the government spend money subsidizing our petrol or we spend a larger chunk of our pay packet, in total sum the country spend the same amount, provided that the total consumption is still the same. Let see this petrol price hike as it is, resource reallocation. We the rakyat have less to spend on other things if we spend more on petrol. If we collectively spend less on chicken, fish and vegetables, while the production of those items stays the same, eventually the real prices of chicken, fish and vegetables would be lower, ceteris paribus.

I would instead suggest to the government to give more help to the poor, needy, disabled and the unemployed. Let’s ask for social welfare payment or at least income top up for the low income group. For example, if a disable person couldn’t work, government should give a living allowance of at least RM800. (I do not know if this is enough living allowance for one person, should it be higher?) As for low income families, government could give a top up for their income, straight to their account.
We should also work toward minimum wage legislation. A worker should get at least RM1200 a month based on 48 hour work week, or RM5.70 per hour. No employer should pay an employee less than that, because that is hardly enough to pay for rent, food and transportation in main urban areas.

Noor Yahaya Hamzah
Email: nooryahaya@yahoo.com
http://nooryahaya.blogspot.com

Minimum Wage and Safety Net

Title: Minimum Wage and Safety Net.
As the effect of removal of fuel subsidy started to bite into the pay packet of the low income group, the call for transparency into Petronas accounting of profit and where the monies goes, gets louder and more vocal. As Malaysian citizens, we all have rights to know the annual report; after all we are all shareholders. Removing fuel subsidy is like imposing tax, which in this case is like consumption tax, the size increases with the amount consumed. The low income groups are the most affected because fuel costs take a sizable chunk of their income.
I do believe that the decision to increase petrol price is correct, and in time, the government should completely remove the subsidy, but the government should do more to help the lower income group most affected.
I support Lim Guan Eng’s call for government to give money to Malaysia’s poor, in the form of cash grant or social welfare payment for the needy, disabled, unemployed and low income group. The current social welfare payment by Jabatan Kebajikan Masyarakat is too low, the poor and disabled had to supplement their income by begging in the streets. This is the time for the government to show their sincerity about the caring society slogan.
I also would suggest to the government to legislate a form of minimum wage law, set at the rate that is enough to pay for comfortable living for our workers. Given the cost of living in the main urban areas, I would suggest that the minimum wage be set at RM1200 for 48 hour week or about RM5.70 per hour which even at that rate it’s hardly enough to pay for rent, food and transportation.
Would employers be able to afford it? Of course they would say no, but corporate profits reported in the past few years suggest that employers can afford it. Its time that the workers get their fair share. Dividends from companies have been increasing for the past few years, so does managers salaries. Given chance, bosses would rather invest in Mercedes ‘mata belalang’ than invest in their workers. Higher wages would encourage employers to invest in higher technology capital intensive business, which lead to higher productivity per worker.

Noor Yahaya Hamzah
http://nooryahaya.blogspot.com
email: nooryahaya@yahoo.com

20 years ago..or near that

Jumpa Kak Julie semalam, dia tunjuk gambar ini, yang di ambil hampir 20 tahun lalu. Circa 1987. Munkin ada kenduri atau tahlil agaknya zaman tu.

Malaysiakini Replies

Included here are the letters that had been on Malaysiakini.com, they may not be in order...



Make an effort to use bicycles
Noor Yahaya Hamzah, New Zealand
Mar 13, 06 4:06pm







In my previous letter, I wrote about the unfairness of subsidising petrol and that I would prefer to receive cash dividends from Petronas as a shareholder. A few letters in response have been highlighting the state of country’s public transport and motorists behaviour towards bicycle users. We must realise here the big picture that as a company, Petronas should maximise its returns on shareholders funds, unfettered with the social obligation of having to subsidise petrol users.
Petronas should be given a free hand to do their job, which is maximising return to shareholders, without any interference from the government or the prime minister. The profit it makes should be returned to all shareholders (all of us, Malaysians) in the form of dividends. I have no beef if some or all of the dividends are given to the government on our behalf to spend on welfare, housing or cash subsidies (social welfare payments, income top-ups) for the poor, the disabled, the pensioners and the low-income group.

So far, since the formation of Petronas, I have never heard of any dividend payment from it. Correct me if I am wrong. I read about Petronas paying taxes on its profits to the government, but do we realise that it can pay much more in taxes if it doesn’t have to subsidise any of its customers? Do we realise that we are also subsidising citizens of neighbouring countries (the Singaporeans and Thais) who cross the border to fill up their tanks?

Most of us rightly grumble about the petrol price increase, but do we realise that our incomes could have been much higher and comparable with Singapore and other Western countries if we didn’t waste our precious resources on mega-projects to line the pocket of cronies? The duty of the government and the civil servants is to serve the people and do what is in the best interest of its citizens.

It is true that Malaysian cities are poorly planned for public transport users and bicycle users but it’s never too late to start lobbying the town planners and make some changes to our habits. Many Western cities have dedicated cycle lanes parallel to or on the roads, and cycling is very much encouraged. Public transport there is subsidised by the government, the monies are from petrol and road taxes. Concerted efforts have been made to turn people away from their cars towards environmentally friendly public transport and bicycles.

Why don’t we all make an effort to use bicycles for short distances? It’s good for our health and environmentally friendly. Bravo to the letter writer who rightly argued that petrol subsidy is classified as consumption and we should spend more money on education and health, which could be classified as investment in our future.

Not all that rosy for NZ cyclists
Adrian Croucher
Mar 13, 06 4:03pm






Reading RS Murthi's description of cycling to work in Malaysia, it sounds as if the conditions for cyclists there are very similar to those in New Zealand. Although New Zealand has an international image of being 'environmentally enlightened', the reality, particularly in the cities, is unfortunately not what the tourist brochures would have you believe.

Conditions for cyclists in New Zealand cities have steadily worsened over the last 50 years as our cities were redesigned around the private car. The numbers of cyclists on the roads have dropped drastically in the last few decades, with the result that drivers are less and less skilled in sharing the road with them.

While we now have government policy in place at both national and local levels to encourage cycling and try to reverse these unfortunate trends, the amount of funding committed to cycling projects is pitifully low compared with the huge sums still being spent on road building.

There is much to be done, and at the rate things are progressing at the moment, it will take a very long time. The continuing rise of global oil prices may do something to force New Zealand to live up to its 'clean green' image, but only time will tell.

The writer is secretary of the Cycling Advocates Network (CAN), Auckland.
Why cycling to work doesn't work here
RS Murthi
Mar 7, 06 3:36pm







While I'm thankful to New Zealand-based Noor Yahaya Hamzah for highlighting the benefits of cycling to work and riding a human-powered vehicle in general, I must point out that he has not fully grasped the reality of the situation in Malaysia.

Ours is not an environmentally-enlightened society like New Zealand's. And cycling, while it used to be common among the working classes here before the 70s (my father used to ride a bicycle to work for more than 25 years), is now treated as something only fools and the impecunious engage in. That's because, despite the appearance of wide political support for it, especially at trying times like these, there has been no concerted effort to promote cycling as a viable means of transport in Malaysia.

As a proud non-driver who has been relying on bicycles for commuting and recreation for more than a decade, I'm fairly qualified to make some accurate observations about our society's attitude to cycling. First, our society is not bicycle-friendly at all. Cyclists are almost always invisible to motorists on the road, even when they're garbed in flaming rainbow colours. That makes them extremely vulnerable at junctions, on narrow roads and areas where traffic is fast and furious.

I was once knocked down at a junction in Taman Tun Dr Ismail in Kuala Lumpur by a Kancil driver who obviously thought he needed more room for his grand chariot than the lane assigned to him. The first thing he said when he stopped and got out of his car was, "I was only doing 30kph what..." He expressed no concern whatsoever for my broken fingers and bleeding arm. So much for caring motorists.

Then you have to contend with motorcyclists who seem to take perverse pleasure in spooking cyclists sharing their lanes. Never mind the cat-calls and ape-noises - evolution has obviously eluded some segments of motorised society. What's really scary and dangerously distracting is the sudden rev-up trick they like subjecting unsuspecting bicycle riders to. This kind of moronic monkeying is not only a dire threat to life and limb but also serves to recharge your contempt for anyone on a motorcycle.

And why are there no bike lanes in places where you need them most? It's fine having them in pretty public parks with costly vanity clocks that hardly anyone has the time to visit these days, but why can't our often benighted town planners find a way of accommodating the thousands of commuters who'd gladly hop on their bicycles if there was a way for them to get to work without worrying about murderous motorists and noxious fumes?
Subsidies must go but bring in transparency first
John Lee
Mar 7, 06 3:42pm






There has been much humming and hawing over the hike in fuel prices announced last week. Many in the public have denounced yet another price increase, while the government has weakly and ineffectively defended the price hike. What both sides are missing is the bigger picture of why certain goods and services should be subsidised, and others shouldn't.

In the first place, the government should never have so heavily subsidised fuel. This callous easygoing manner of subsidising what is essentially a consumer good would not benefit anyone in the long run. Now that the government is trying to undo its mistake, it is being forced to take fire from the public.

However, the public - as grave as their concerns may be - is not thinking about the long run. Economic theory has already proven that nearly any intervention in the price mechanism causes a "deadweight loss" where both consumers and suppliers lose a certain amount of profit or utility from the good. It can be argued that theory does not always correspond with reality but the simple truth is that with so large a subsidy, it is difficult to see how the present situation can be anything but comfortable for anyone's bottom line.

It is, of course, true that most consumers do not see it that way - lower prices are, after all, a boon for them. In the long run, however, can the wanton consumption of fossil fuels encouraged by government subsidies not harm us? Surely we would gain more were we to export the petroleum currently guzzled by our subsidised national cars, and get back the world market price instead of having to expend taxpayer money on subsidising fuel. To be frank, I believe the government is correct in its aim to eventually remove all petrol subsidies. The government - and hopefully by extension the rakyat - can earn more by selling our natural resources at the world market price than by actually raking in a loss by subsidising those same resources.

That is not to say all subsidies are bad. Many subsidies can be considered an investment in the long run. For instance, widely accessible and high-quality education or health care will benefit the nation as a whole far more than making the drive to work a little cheaper. Joey Chan cites the multiplier effect of the price hike, but surely investing in education will yield a multiplier effect as well - one more good teacher could train 10 more good teachers, who could in turn train more so on and so forth. Education and health care can be viewed as capital goods, those that will yield dividends for the nation in the long run, increasing our production capability. Petroleum is, by and large, a consumer good - nice to have, maybe even necessary but not high-yielding enough to demand backbreaking subsidies from the government.

I am, of course, not that naive to think that the government will spend our money wisely. The appropriate thing to do, if the government was to divert spending from subsidies to some other portion of the budget, would either be to give the public a tax break or make it absolutely crystal clear what the money would be spent on. At least the public knows what its taxes are being used for. The petrol subsidies may not benefit us entirely in the long run, but at least we - and not cronies or politicians - would be the ultimate beneficiaries, even if for only a while.

But the government has not made it clear how it plans to spend the money. Najib has mentioned something about "public transport". Well? Surely the government has a plan on how to allocate the money. And what about the rural majority? While the prices of their necessities increase, how will their loss in real income be offset? It is my frank opinion that the government will not do much to benefit the rakyat with its "earnings" from reducing the subsidies. One expects the money to be shoveled onto the gravy train, for someone's cronies to ride, or used to cover the losses of yet another harebrained scheme which used taxpayer money.

These unpleasant implications do not indict the lifting of the subsidies. I believe any leader who thinks the subsidies should have remained as they are is not looking far ahead into the future. A leader who will have my support is a leader who will use our money to invest in the education of our young, and the well-being of our citizens. Pak Lah, are you that leader? For the sake of Malaysia, I hope you are.

‘Understanding’ won’t put food on table
C Nimitz
Mar 7, 06 3:51pm







I refer to the letter by Paul Ooi of Colorado entitled Oil prices in Malaysia still cheaper. I must say Ooi's comparison of petrol prices in Malaysia and the US is not logical, to say the least. He implies that we Malaysians should not be so agitated over the recent hike in petrol prices because we are paying US$2 per gallon while the Americans, Japanese and Hong Kongites are paying US$2.35, US$3.50 and US$4.50 respectively.
I am totally surprised that it did not occur to a well-traveled person like Ooi that Malaysians make much less than the people in the three places he named. Malaysia has a GDP per capita of US$10,400 while the United States, Japan and Hong Kong have a GDP per capita of US$41,800, US$30,400 and US$36,800 respectively. Now, is Ooi actually saying that someone who makes US$10,000 a year and pays US$2 for each gallon of petrol is better off than a person who makes US$40,000 a year but pays US$2.35 (a mere US$0.35 more) for each gallon of petrol? Doesn't make that much sense, does it?

I'm tired of the usual banner of 'oil prices in Malaysia are still cheaper when compared to others' every time price hikes take place. The government must think we Malaysians are a bunch of donkeys. The fact is, despite the mediocre education the government gives to most of us, we can actually do simple maths. If the government had really done its job all these decades, we would not be plagued by corruption and wastage and would be doing so much better in the income and purchasing power departments. The issue of oil subsidy would not even arise as we can then afford to pay for unsubsidised fuel.

The government also launches into elaborate explanations as to why we need to reduce subsidies for fuel and inject the salvaged money into ‘much needed’ development. But since the past four or five price hikes, our development has remained at that -‘ much needed’. Can anybody honestly say that the public transportation system in our country has improved ever so tremendously so as to finally allow us to depend on it to get to work, to school, to the market, the court, the hospital, for meetings, etc?

Okay, so we understand the pressing economic need to put our money in development, money which will otherwise be wasted away in fuel subsidies. Understanding, however, does not put food on our tables. Despite our comprehension of the economics of fuel subsidies, we still cannot make ends meet. I'm not against the idea of development. It's just that for the past 18 months or so, petrol prices have increased about 40%, diesel prices about 100% and I have not had 1% of increase in my pay. How, pray tell, am I supposed to cope with this increase in the cost of living? The saying goes that by the time you can make ends meet, they move the ends. In my case, I was not even close to making the ends meet, and they have already moved the ends.

For the benefit of Ooi, I present the typical monthly expenses of a middle-income earner in Kuala Lumpur:

Salary: RM2,600 (after EPF and tax deductions)

Minus:

Housing: RM300
Car loan: RM500
Study loan: RM200
Phone and Internet: RM150
Insurance: RM180
Petrol (lives a distance away from KL to take advantage of lower house rent) - new price: RM600
Toll: RM180

Salary left for food: RM490

No savings, no entertainment budget, no new clothing, not much to give the family. And when the time is up for car insurance and road tax, credit card debt is incurred. Please don't tell this person to take public transport. First of all, public transport does not reach where he is living. Secondly, I really would not dare to ask him to rely on the public transport to get to work and meetings on time. If he is a lawyer, then he definitely does not want to take public transport unless he doesn’t mind his cases being struck out by the court due to his late appearance.

If that is the life of a middle-income earner, my heart really goes out to the low-income earner.

I do not think Malaysians are being unreasonable about the hike in fuel prices. Trying to make ends meet and making sure the family has enough food is not unreasonable. Feeling desperate and angry when price hikes takes away the ability to buy enough food for the family is not unreasonable. Unreasonable is when one complains about having to buy less Gucci shoes. Unreasonable is when one tells his countrymen to change their already marginalised lifestyles when he himself is driven around in luxury cars while living in mansions and having his petrol paid for by the rakyat's taxmoney. Unreasonable is when one tells people earning less than RM1,000 a month to tighten their already tight belts when he himself dines on the finest food in the finest ambience.

Coming back to Ooi, since he had so selflessly offered advice to spendthrift and inconsiderate petrol-gulping Malaysians to change their lifestyle, allow me to reciprocate his kindness. My advice to Ooi is to come back to Malaysia, make Malaysian ringgit and pay US$2 for a gallon of petrol. Ooi can also practise what he preaches about reviewing 'our petrol consumption patterns'. In saying this, Ooi joins Noor Yahaya Hamzah of New Zealand in admonishing Malaysians over their reluctance to walk or ride a bicycle instead of taking the car.
Notice how these people are always those who live outside Malaysia? They give their patronising advice from their comfortable homes in First World countries with First World incomes and comfortable climate. It would not be so easy to mete out such generous advice if you were living in a Third World developing nation with your Third World income and sweltering heat.
Oil hike: Govt right, start using bicycles
Noor Yahaya Hamzah, New Zealand
Mar 3, 06 3:27pm







I am writing this from the other side of the world so a petrol price rise in Malaysia does not mean that much to me. But I appreciate that an increase in petrol price might have a flow on effect in secondary price rises in other goods that use transport to reach their market, like most essential goods and food items.

I don’t buy much petrol, maybe on average NZ$20-NZ$30 a week. You see, for the past two years since the price of petrol started rising in (over here it was NZ80 cents [RM1.50 back then] a litre five years ago, now NZ$1.49 [RM3.70 now], I have been using my old trusty bicycle.

I only use my car to transport the kids and whenever I need to transport stuff like groceries from the supermarket. Now, I am not suggesting that everyone should bike to work, it would take an hour if you live 15km away, but if it just 5-6kms, it would be good for your body. You can do away with your weekly gym session! If public transport is available and possible, why not use it? Over here, secondhand bicycle prices have been rising steadily for the past two years. A sure sign that people are starting to use alternative forms of transport and save the world’s energy resources, in this case oil, at the same time.

I applaud the government move to face the reality that higher oil prices, and hence higher petrol prices, are here to stay. Over a year ago, I wrote suggesting the government do away with the petrol subsidy and let petrol prices at the pump reflect world prices. The subsidy benefits the rich instead of the poor for after all, small cars and motorbikes don’t use much petrol while big cars driven by the rich do. I also suggested the money saved, estimated to be RM4.1billion, be used to improve public transport in the country. It is heartening to see that there might be somebody in the policy department read my letter here in malaysiakini and took it onboard.
No doubt that a petrol price hike is inflationary, and it will eat a huge chunk of the ordinary Malaysian’s pay packet if they keep on using their car just to go to work or to the neighbourhood nasi lemak stall a couple of miles from home. But if everyone changed their habits, used public transport or a bicycle for short distances, the decision to raise the petrol prices would result in billions of ringgit saved from wastage.

We would reasonably expect that after the price rise, people would economise and buy less petrol (in litres) so the amount of subsidy would also be less. For example, if the original amount of petrol consumed was 10 million litres, with the price rise, the amount consumed can be expected to be less, say 8 million litres. A huge amount of savings is already made.

For this theory to hold, the quantum of the price rise has to be big enough so that consumers would be forced to change their habits. If the price rises only by 2-3 sen every six months, this might not hit consumers’ pocket too much and they wouldn’t change their habits. So the government’s decision to raise the petrol price by 30 sen is correct. Hopefully, Malaysians would use public transport and bicycles for a change.

As for the flow on secondary effect on prices of goods and services that need to be transported to reach their market, my experience here tells me that the prices of food and other goods and services should not increase, except for bus fares. Firms in the transport industry learn to improve their efficiency (less frequent but larger deliveries) or introduce surcharges for fuel components like airfare ticket these days. Over time, Malaysians will realise sooner or later that their expectations that prices are rising are baseless.

What about the huge profits from Petronas? I would rather receive it in the form of a cash dividend (as Malaysians, we all have a share in this government company) rather let the profit be guzzled by Mercedes-driving countrymen/women who demand that their petrol be subsidised.

As I said previously, small cars or motorbikes don t use much petrol, big cars do. Yes, we read about their complaints but I suspect most of them are middle-class, 2-3 car households and live in double-storey houses in the suburbs being well-educated enough to be able to write eloquent letters to the editor. They’re not bicycle-riding ones like me!

Dear Prime Minister

Contrary to popular opinion, I support your Cabinet decision to raise the price of petrol and diesel. If I were in your position, and have influence in making the decision, I would lobby for complete removal of petrol and diesel subsidy.
Removing subsidy is like imposing tax to the affected group, in this case the affected group is 95% (or thereabout) of the country. The effect of this is like imposing consumption tax, some people pay more, and some people pay less, depending on their consumption of the product. If we calculate the amount petrol consumed as a percentage of income, the lower income group has the highest increase, even though the higher income group has the highest amount of petrol consumed.

May I suggest these measures to help the lower income group?

Minimum wage legislation.
This might take up to six month to study, write and put it through the parliament and passed into law.
This will spur the country forward to make more capital investment and increase per capita productivity, since employers would not employ employees to do low value jobs. It will also help employees on low income; higher income will ease their burden.

Social welfare payment (dole).
Social welfare payment for the poor, disabled old folks and pensioners, since their income are normally low and most of them cannot make end meet. Those people who are unemployed and have children to feed should also be included in this category. I would not elaborate further on this, since this should be included in our caring society concept adopted some time ago.

May I also suggest that the social welfare payment for main urban areas be set at RM1200 for two person household, (single person rate could be set at RM600) with increasing amount depending on the number of dependent in the household, e.g. RM100 for every additional child under 15 years old.
As for the minimum wage rate, I would suggest the rate is set at RM1200 for 48 hour week. That gives hourly rate of about RM5.70.

Petrol Subsidy and Petronas

Title: Petrol subsidy and Petronas.
In my previous letter, I wrote about the unfairness of subsidizing petrol and that I would prefer to receive cash dividend from Petronas as a shareholder. A few letters in response have been highlighting the state of country’s public transport and motorists’ behaviour towards bicycle users. We must realize here the big picture that as a company, Petronas should maximize its returns on shareholders funds, unfettered with social obligation of having to subsidize the petrol users. Petronas management should be given free hand to do their job, which is maximizing return to the shareholders, without any interference from the government, or the Prime Minister. The profit it makes should be returned to shareholders (all of us, Malaysians) in the form of dividends. I have no scruples if some or all of the dividends are given to the government on our behalf to spend on welfare, housing or cash subsidy (social welfare payment, income top-up) of the poor, disabled, pensioners and low income group. So far, since the formation of Petronas, I have never heard of any dividend payment. Correct me if I am wrong.
I read about Petronas paying taxes on its profits to the government, but do we realize that it could have paid much more in taxes if it doesn’t have to subsidize any of its customers? Do we realize that we are also subsidizing citizens of neighbouring countries (Singaporeans and Thais) who cross the border to fill up their tanks?
Most of us would rightly grumble about petrol price increase, but do we realize that our income could have been much higher and comparable with Singapore and other Western countries if we didn’t waste our precious resources on megaprojects to line up the pocket of cronies? The duty of the government and the civil servants is to serve the people and do what is in the best interest of its citizens.
It is true that Malaysian cities is poorly planned for public transport users and cycle users, but it’s never too late to start lobbying the town planners and make some changes to our habits. Many Western cities have dedicated cycle lanes parallel or on the roads, and cycles are very much encouraged. Public transport are subsidized by the government, the monies are from petrol taxes and road user taxes. Concerted efforts have been made to turn people away from their cars towards environmentally friendly public transport and bicycle. Why don’t we all make an effort to use bicycle for short distances? Its good for our health and environmentally friendly.
Bravo to the letter writer who rightly argued that petrol subsidy is classified as consumption and we should spend more money on education and health which could be classified as investment in our future.

Noor Yahaya Hamzah
http://nooryahaya.blogspot.com
nooryahaya@yahoo.com

It took over a year..

Over a year ago I wrote this to www.malaysiakini.com, it was published in the Dina Zaman's section.
Title: Malaysia; a car driven economy.
The plane landed at Changi Airport just after 9pm. I changed some money into Sing dollar, just enough for the taxi ride across the causeway to JB. It wasn’t that expensive from the airport to Eunos, where the causeway bus and taxi stand was, but it was already late, just after 10pm and no bus to JB. So I took a taxi to catch up with the midnight bus from JB to KL. It was Sing $40 for the taxi ride from Eunos to the (what its name) bus stand a few miles outside JB. My first impression is that it’s beyond reason to build a bus stand miles outside the city centre, unless it is connected to the city centre with a commuter train or shuttle bus service. From JB to KL only took me 4½ hours and RM15 by bus.
KL in the early hours was a jumble of unfinished highways and viaducts. It gets worse as the day progresses – bumper to bumper traffic jam and honking irate drivers from morning till night. Obviously the new highways and viaducts are to cope with the numbers of cars on the road. It becomes obvious later that the Malaysian economy is driven by cars – fuelled by subsidised cheap petrol and no-deposit 7 to 9-year financing. Car ownership is at all time high, so great is the nation’s love affair with car that the other alternative – public transport, is stifled and fighting for survival. The evidence is all over the country – Intrakota and Park May, bus companies have been bleeding losses for a number of years and on the verge of bankruptcy. A few month ago, a finance company seized Intrakota’s buses for non-payment of loans.
Bus companies in this country has always been controlled and kept at a low rate. Bus companies have been subsidizing the commuters on behalf of the government for aeons. Just look around the city and countryside. Buses in the city are at least 10 years old; the situation gets worse in the countryside, where 20 year old buses are common. In financial terms, money is not being ploughed back into the business to replace depreciated capital, debt servicing and dividend payment to shareholders take precedence.
The number of cars on the road fuel economic growth in several areas from highway building to component manufacturing and car servicing. Every six month Malaysian Car Industry Association would release the latest car sales figures. The number of cars sold reflects the state of economy for the past six month. Financing car is cheap and does not make sense; you can buy a small compact hatch for no-deposit and monthly repayment of RM300 or less stretched over 7 to 9 years, using the car as collateral. So in a few years time, the value of the car is worth much less than what you owe the finance company. If you are smart enough to ditch the car (give it back to the finance company, after all the ownership paper says it is still theirs), the finance company would face losses.
Left to its own devices, this car driven economy could present problem in the future. Fuel subsidy cost is gobbling significant amount of cash, RM4.9 billions at the last press statement by Datuk Mustapha Mohamed. That RM4.9 billions in fuel subsidy could go a long way to pay for the country’s development expenditure, instead of subsidizing rich, middle class, 3-4 car family. Well intentioned but missed the target by a wide margin.
Worse, some of the subsidy goes to Singaporeans who crossed the Causeway every chance they get to fill up their tanks. How we love to poke at Singaporeans, yet we subsidize them with cheap fuel, rice, sugar, chicken etc.
More Malaysians thought that car is a form of investment which holds its value, when in reality it diminishes its value with time (depreciate). Traffic congestion in the cities started to waste everyone’s time, a major stumbling block to increase productivity. In fact it probably started to reduce productivity and increasing the cost of doing business.
How I would handle it differently?
Remove fuel subsidy to start with, then use some of the savings to subsidize public transport companies and individuals – train, bus, and taxi on passenger-mile basis, e.g. one passenger for 1 km RM1 subsidy, so short distance travel by public transport could be free. This will simultaneously reduce congestion in the city, (higher fuel cost is a disincentive to drive to work) and improving public transport by attracting more investments.
Then I wrote this:
The futility of price controls
Noor Yahaya Hamzah
Jun 29, 05 1:01pm



I have always advocated the removal of subsidies (particularly petrol and diesel subsidies), the free floating of the ringgit, the deregulation of the financial markets and stopping the inflow of cheap foreign labour into the country as well as advocating for minimum wage and a safety net.

Lately, the government has taken the step to reduce costs associated with ballooning fuel subsidies cost with petrol and diesel price increases which will save the government approximately RM2.2 billion.

But with this savings for the government comes pain for the masses in the form of price increases in everything that needs transport. Lorry charges, taxi and bus fares as well as prices of food and vegetables will climb.

The government has been trying its best to talking down the prices with the prime minister calling on traders not to increase prices

But price controls defy economic logic. If a product (e.g. a kilo of sugar) cost RM1.30 to produce, how could a trader sell it for RM1.20? If forced to so, the trader will have to make his profit somewhere else, ie, he must sell something else that returns more than average profit to make up for the losses of the controlled product.

Ask any average Malaysian if he or she knows any good that is under a controlled price or subsidised to a certain extent. Almost every essential product including cooking oil, sugar, rice, chicken, beef to name a few, are under price controls.

Losses and lower than average profit in any sector of the economy signals to the operators in that sector to cut their losses and move their capital investment elsewhere. This is what will happen in some sectors of the economy which face government-imposed price controls.

I can suggest a better way for the government to help low-income earners, that is increase their income sufficiently to afford a decent living. Social welfare payments for those who are unable to earn a living and income top-ups directly from the government for low-income earners in the private sector would be more useful because they target directly the intended group.

A minimum wage law could also be enacted so that errant employers would not be able to exploit workers with impunity. The current system of subsidies, tariffs and price controls is flawed as subsidies benefit the rich more than the poor.

Tariffs make the prices of goods higher (and deliver fat profit to the protected industries) while price controls promote shortages and under-investment in the affected sectors. Let’s free the market.
So when I found out that Govt has just increased price of petrol by 30 sen, with the savings from subsidy been earmarked for improvement in public transport, I said.. YES.

Petrol Price Hike

Title: Petrol Price Hike.

I am writing this from the other side of the world, petrol price rise in Malaysia does not mean that much to me. While I appreciate that an increase in petrol price might have flow on effect in secondary price rises in other goods that uses transport to reach its market, like most essential goods and food items, I don’t buy much petrol, maybe on average $20-$30 a week. You see, for the past 2 years since the price of petrol started rising in the world market (over here it was NZD80 cents (RM1.50 back then) a litre 5 years ago, now NZD1.49 (RM3.70 now) I have been using my old trusty bicycle. I only used my car to transport the kids sometimes and whenever I need to transport stuff like groceries from supermarket. Now I am not suggesting that everyone should bike to work, it would take an hour if you live 15km away, but if it just 5-6kms, it would be good for your body. You can do away with your weekly gym session! If public transport is available and possible, why not use it? Over here, secondhand bicycle prices have been rising steadily for the past 2 years. Sure sign that people start using alternative form of transport, and saving the world energy resources, in this case oil, at the same time.
I applaud the government move to face the reality that higher oil prices, and hence higher petrol price is here to stay. Over a year ago I wrote to www.malaysiakini.com.my and www.malaysia-today.net suggesting that the government do away with petrol subsidy and let petrol prices at the pump reflect world price. That the subsidy benefits the rich instead of the poor, after all, small car and motorbike don’t use much petrol, but big cars like Mercedes and Perdana driven by the rich does. I also suggested the money saved, estimated to be RM4.1billion, be used to improve public transport in the country. It is heartening to see that there might be somebody in the policy department read my piece in an online publication and take it onboard.
No doubt that petrol price hike is inflationary, and it will eat a huge chunk of ordinary Malaysian’s pay packet, if they keep on using their car just to go to work or neighbourhood nasi lemak stall a couple of miles from home. But if everyone changed their habit, use public transport or bicycle for short distances, the decision to raise the petrol price would result in billions of ringgit saved from wastage. We would reasonably expect that after the price rise, people would economize and buy less petrol (in litre), so the amount of subsidy would also be less. For example if original amount of petrol consumed was 10million litres, with the price rise, the amount consumed can be expected to be less, say 8million litres, then a huge amount of saving is already made. For this theory to hold, the amount of price rise has to be big enough so that consumers would change their habit. If the price rises only by 2-3 sen every month, this might not hit consumers’ pocket too much that they wouldn’t change their habit. So the government decision to raise the petrol price by 30sen is correct. Hopefully Malaysian would use public transport and/or bicycle for a change.
Now considering the flow on secondary effect of prices of good and services that need to be transported to reach their market – food, household goods etc. My experience here, tells me that prices of food and other goods and services doesn’t increase, except bus fares. Firms in transport industry learn to improve their efficiency (less frequent but larger deliveries) or introduces surcharge for fuel component, like airfare ticket these days, there is a fuel surcharge in addition to fare price. Over time, Malaysians will realize sooner or later that their expectations that the price food and other goods will also rise is baseless.
What about The huge profits from Petronas? I would rather receive it in the form of cash dividend (as Malaysians we all have a share in this government company) rather let the profit be guzzled by Mercedes driving countrymen/women who demanded their petrol be subsidized. As I said previously, small car or motorbike don’t use much petrol, big cars do. Yes we read about their complaints, I suspect most of the are middle class, 2-3 car households and live in 2 storey house in the suburbs and well educated to be able to write eloquently in letter-to-editor columns, not bicycle riding like me.

Email: nooryahaya@yahoo.com