Now, Malaysia has a rising debt of RM362 billion, which is 52 percent of the country’s GDP. To date, Malaysia is one of the most heavily subsided nations in the world, with almost RM12, 900 per household. It is said that if the Malaysian government’s debt increases by 12 percent every year, the county could go bankrupt by 2019 when it equals to the GDP.
Cutting some of the subsidies, I believe, can prevent Malaysia to go into bankruptcy. Furthermore, if the subsidy itself is channeled to the wrong beneficiaries, it will just be a waste of government resources. Government should better use the resources in investing in infrastructure technology rather than helping the rich. Subsidies allocated for the poor are only RM1.7 billion and only RM0.2 billion out of RM74 billion is allocated to farmers and fishermen. The rest goes to all consumers in medical services, petrol, sugar, and cooking oil and so on, as well as students in education, and last but not least, companies in gas subsidy.
It is a fact that Malaysians are big consumers of fuel, about 450 litres per day, which puts Malaysia even far more ahead than larger countries like China. This high consumption rate is largely due to the relatively cheaper fuel price, which also leads to naming Malaysia as one of the fastest growing nations in terms of carbon emissions. Cutting subsidy from fuel will save almost RM45bil over five years. Even, our neighboring country, for example, Cambodia, which the average income of the people is not higher than Malaysia, the price of their petrol is higher than ours. The increasing fuel price can actually encourage Malaysians to take public transport, which helps to reduce carbon emission. Same goes to electricity, which will save another RM35bil. Together, they account for nearly 80% of the proposed subsidy cuts over 5 years of RM103bil and it can help to reduce the wastage of resources. The subsidy for sugar, cooking oil and natural gas for companies also should be cut for the same reason.
However, subsidy for social services like education and health services, welfare aid for the poor and allowance for the fishermen should not be cut.
Education is the base of everything. With education, we can produce productive labors, leaders and thus this will lead to the stability of the politic as well as the economic. Therefore, government should show full support in education. Children in rural areas will definitely not be able to continue studies at public institutions without the government’s aid. Furthermore, the loans provided by the National Higher Education Fund Corporation really helps a lot in easing parents’ education. If aids are not provided, some parents might think rather than spending money on education and waiting for them to graduate, it is better to engage them in the family businesses right now or any hands on skill. To emphasize the importance of education, first of all, government should take the initiative. Same goes to health services, as no one can choose not to fall sick.
About subsidy for fishermen, I think government should enhance that. On 2008, fishery department statistics show that the number of fishermen has declined over the past decade and about 20% of the total 110, 000 workforce estimated to be involved in fishing are foreign nationals. Fisheries also, not only being identified as a strategic sector to increase domestic food production, but also as a source of export to East Asian markets. If Malaysia has the resources to support domestic and overseas consumption, Government should then give subsidy to encourage more and more people involve in fisheries sector and help them to add value in the fish products. For example, process fishes in the form of junk food and export it out.
But, subsidy should be implemented gradually, so that it would not cause too much pain to the consumers and it should not cause inflation either.