Economy, Featured, General, Govt, Mind, Philosophy, Politics

Najib’s Durian Economics

Back in July this year, Ali my colleague, when he found out that durians today cost more than RM100 a kilogram exclaimed, “Dulu durian selonggok baru 10 ringgit hingga 15 ringgit. Apa sudah jadi?

(Durians used to cost RM10 – RM15 a pile. What had happened?)

Little did he realise that two months after his innocent question, someone no less than Prime Minister Najib Razak himself would answer his conundrum.

The Prime Minister during the 2017 National Farmers and Fishermen’s Day gathering proudly declared that he was responsible for the durian price hike. “Buah durian satu ketika dahulu… seringgit sebiji, tapi hari ini, harga melebihi seratus ringgit sekilo. Sayalah yang bertanggungjawab…

(Durians used to be sold for RM1 a fruit but today, the price is more than RM100 a kilogram. I am responsible for this…)

Put your finger on this story for a while, I will come back to it later.

BN’s dangerous self-patting attitude towards its own achievement

Najib’s government is going on an overdrive to tell us that the economy is doing well.

The proof? In the numbers, of course: 5.7% GDP in the first half of 2017, revision of national economic growth and credit standing by different international bodies, an improved ranking in the World Economic Forum Global Competitiveness Report 2017, and the list goes on.

Three years ago, one former Economy Minister said that households in Malaysia were earning more than RM5,900 a month. In fact, a year before that, he even told Parliament that our country is in full employment, based on textbook Keynesian.

The government is deeply committed to a self-congratulatory and self-patting attitude regarding the state of our country.

The corollary to such attitude is clear: Not only the government is rendered blind towards the real condition of Malaysians, it becomes amused and sometimes even outright indignant when there are people who still protest, who still dislike the government, who still criticise the regime, or simple when there are people who are still poor and struggling.

Case in point, a top Finance Ministry official, the Secretary General of Treasury, once even rumoured to be the next central bank governor, Irwan Serigar, recently in a speech said that, there is no excuse for Malaysians to be poor, and if we are poor, we have only ourselves to be blamed.

Barring that he went against civil service ethics by going on a tirade against “those who confused the people”, an oft-repeated line by ruling politicians against the opposition; such blame game is dangerous. It is symptomatic of a government who thinks that it can do no wrong and is clearly indifferent towards the vulnerability of ordinary Malaysians facing economic challenges.

This of course is not new.

The Prime Minister himself in Mac 2016, when addressing Parliament said that the pressure from high cost of living is not due to government policy such as the introduction of GST, but rather it is because Malaysians generally have low level of education that limits our income.

When the government believes it can do no wrong, any problems will then be shifted to the people who are in actual fact, victims of the problems in the first place.

But is everything really ok?

Yes, the government presented statistics, and made big announcements. But, oddly enough, all of us know deep in our guts these numbers do not reflect what is happening on the streets.

For example, although the government claimed that we are only 15% away from becoming a high income nation, half of the workers in Malaysia are still earning below RM1,703 a month. The number is even more tragic in the rural area, 50% earns just slightly above the minimum wage at RM1,256.  

Even Najib’s logic of “low income due to low level of education” cannot hold water: half of our workers with tertiary education receive less than RM3,200 a month!

In August 2017, the Human Resources Minister, when answering my question in Parliament, said that in the last four years, the average salary offered by new jobs created was only between RM1,000 – RM5,000.

Even according to the various definitions, these at best are in the category of low to lower-middle income jobs.

We are not even talking about unemployment and underemployment yet.

So, who is getting all the wealth?

After returning from the United States, Najib boasted his 30 minutes “Make America Great Again” moment when he visited President Donald Trump on 12 September 2017 and promised to “strengthen the US economy”. While I do not want to ridicule our Malaysian investment in USA, there is clearly a huge problem with Najib’s economic thinking here:

Within the next five years, Najib told Trump, Malaysia will purchase 50 planes of the 737 MAX 10 type and eight 787 Dreamliners. “The deal will be worth beyond USD10 billion”.

The thing is, Najib’s government can buy new planes, even doubling the existing purchase order, spending beyond RM42 billion in USA, yet, Najib himself cut spending of our public varsities by 20% (RM1.5 billion) and public healthcare by 16% (RM0.24 billion) in this year’s budget. Both add up to less than 5% of what he spent buying planes.

What sort of logic is this?

Who is getting all the wealth?

After the 2017 Malaysia Day eve flood in Penang, Federal Action Council chairman, Zainal Abidin Osman, who is also the Penang UMNO Chairman claimed that the federal government had spent RM2.58 billion for flood mitigation in the state since the Ninth Malaysia Plan. However, official record from the Drainage and Irrigation Department shows that only RM443 million was spent by the federal government.

Where has the money gone?

I have also shown that in Najib’s 2017 Budget speech, despite him seeking to ask permission from Parliament to spend RM260 billion, he chose to deliver an entertaining political ceramah with dubious budgetary announcements where “goodies” mentioned were not found in the actual Budget documents.

The government continues to make big announcements but the money ended up not being spent for the people.

Who is really benefiting from Barisan Nasional’s (BN) economic agenda?

And when money is actually being spent at all, there is an unequal distribution of development among the states in Malaysia. Kuala Lumpur as the national capital has a Gross Domestic Product (GDP) per capita (2014) of RM80,000 while the rest of the 13 states have a GDP per capita half or less than half of KL. States like Kelantan (RM10,677), Kedah (RM16,316), Perlis (RM18,519) and Sabah (RM18,603) have GDP per capita lower than RM20,000.

Money is spent on developing the capital city at the expense of other states in Malaysia. One good example is, almost two decades after LRT was built in Klang Valley and now with the new MRT, we still do not see such large scale public transport improvement in other states in Malaysia. States like Kelantan, Sabah and Sarawak do not even have proper highways to connect their vast territories.

Who is really benefiting from BN’s economic model?

The problem is clear, even if there is economic growth, it does not equal distribution of wealth.

Someone is getting the money, but not ordinary Malaysians.

The price of durian is now skyhigh, someone is reaping a sweet profit, but ordinary Malaysians can no longer afford this very native fruit which is a local favourite.

Crony capitalism + Corruption = Wealth for the rich, bill for the poor

In 2015, the government set up Mara Digital Mall on the pretext of helping Bumiputeras to compete with Low Yat, the famous KL ICT mall. It was even touted as “Low Yat 2.0”.

Barely 2 years later, the Mara Digital Mall is showing signs of trouble. The main reason: it was reported that vendors in Mara Digital Mall are forced to purchase their products from a sole supplier, WGN Scan Sdn Bhd. This not only caused their price to be 10-12% higher than other places but because WGN could not keep up with the demand, supply chain management is very poor thus causing inconvenience to customers.

This particular example typified the kind of economic model implemented by the ruling regime: one which enriches rent-seeking cronies, even at the expense of the majority of Malaysians.

Whether under the pretext of improving the market (RM100/kilogram durians) or helping Bumiputeras (Mara Digital Mall), or even improving efficiency (rationalising and digitalising the immigration process for example), well-connected businessmen and major corporations are the ultimate beneficiaries, not the people in general, it doesn’t matter if you are Malay, Chinese, Indians, Ibans or Kadazans, much less the smaller ethnic groups in the country.

In other words, only a select few actually reaped profit from the government’s economic policy.

The Economist May 2016 Crony Capitalism Index ranked Malaysia as number 2 in the world, after Russia.

This, coupled with an entrenched culture of corruption created a situation where the rich and well-connected are assisted by the state to thrive in the economy while the ensuing bill is being passed on to the poor.

Case in point, after years of plundering and mismanagement, and at the heel of the Mother of All Scandals, 1MDB, BN federal Ministers have gone public telling us that implementing Goods and Services Tax (GST) is good for us.

The infamous Ahmad Mazlan even went to the extent to say that implementing GST will help to lower prices in the market.

It is already more than two years since GST was implemented on 1 April 2015. By the end of the first year in April 2016, inflation was at 2.1%. Two years later in April 2017, inflation rate is at 4.4%. This is twice more than what Najib himself had predicted in his 2017 Budget speech last year.

One of the biggest increase today is the price of food and beverages at 4.1%.

Evidently there is a real increase in the cost of living for all Malaysians.

GST is essentially the government passing on the cost of corruption and years of inefficiency in fiscal management to the people.

With subsidy cut masquerading as rationalisation, cost of corruption being passed on to the people as new taxation, selective mega projects and investments which continue to generate ever bigger gaps between the rich and the poor instead of bridging this gap, the problem is obvious: crony capitalism and corruption resulted in a situation where Malaysians in general are not able to enjoy the wealth of our country, despite the glossy picture BN painted about the abundant prosperity.

Cheap kangkung, one ringgit chicken and expensive durian

In 2014, Najib told Malaysians that we should be thankful the price of kangkung has gone down. Soon after that he demonstrated how he was able to buy a whole chicken for RM1 and went on to advise the people to shop wisely instead of complaining about price hikes.

Being a fan of the French psychoanalyst Jacques Lacan, the Prime Minister’s marketing charade amuses me because it fitted into Lacan’s three order of The Symbolic, the Imaginary and the Real.  

The price of kangkung represented the Symbolic, what is symptomatic of the situation ordinary Malaysians are facing today, the so-called stagflation, high debt, crisis of confidence and credibility in our economy all generated a level of hardship for ordinary people signified by us having to eat kangkung only.

The RM1 chicken, is of course, the Imaginary, the fictional situation which our federal government perhaps even genuinely believes in and tells us to believe as well – that everything is fine, the glossy PowerPoint presentations, the numbers and the statistics all these are really the case and thus there should be no excuses for Malaysians to be poor! The narcissism here is obvious: not so much of the government lying to us, but a government believing in its own lies.

Three years later today, when Najib proudly declared that he was responsible to bring up the price of durians so high that Malaysians can no longer afford them; he completed the Lacanian loop, by finally introducing the Real. This is the backstory, when the facade of the Symbolic poor people eating kangkung and the Imaginary political correctness where government helps the poor is gone, this is what we get: An economy which benefits the elite and elite only.

This is Najib’s Durian Economics, where the rich(ness) is zealously protected, if necessary, even by the brute force of the state.

Steven Sim is the Member of Parliament for Bukit Mertajam.

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