Tuesday, March 14, 2006

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)


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!


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