Ex-Sabah CM says stimulus package not working
Joe FernandezPublished: May 12, 2009 7:46 AM | Updated: May 12, 2009 8:05 AM
Former Sabah chief minister Harris Salleh has been looking askance at the RM60 billion 2nd stimulus package announced recently by finance minister, and now Prime Minister Najib Abdul Razak.
He's not convinced the package, like the earlier RM7 billion stimulus package – too little, too late – is working at all.
Former Sabah chief minister Harris Salleh has been looking askance at the RM60 billion 2nd stimulus package announced recently by finance minister, and now Prime Minister Najib Abdul Razak.
He’s not convinced the package, like the earlier RM7 billion stimulus package – too little, too late – is working at all.
Sabah, for example, is dependent on its land assets, points out the former chief minister, “and this has not been addressed by the stimulus packages”.
Harris has been studying how the federal government’s recent stimulus packages can better embrace the common people in the rural and urban sectors in the country.
“If one travels along Papar, Beaufort or Penampang, one can see plenty of land but not much has been put to agricultural use,” said Harris who has taken this scenic route himself to see whether there has been any change over the years in the situation.
He estimates that at least a million acres are lying idle in the sun and blames this on government subsidies “which should have been done away with by the stimulus packages”.
Overall, he blames both federal and state government policies for shortcomings in the agricultural sector.
“These subsidies have made people lazy,” charged Harris, pointing out that “because of subsidies for rice, cooking oil and sugar, among others, not many people were too keen to toil on the land as it was cheaper to buy than to grow.
Keeping the rural vote bank BN-friendly
“In the old days, people produced their own sugar from sugar cane, salt, as well as planted such crops like rice and were self-sufficient.”
The former chief minister seems to be echoing the opposition alliance’s allegations during the recent Batang Ai by-election in Sarawak on the subsidy regime.
The opposition had alleged that the subsidies were not only keeping the people unproductive and poor but is linked to the ability of the Barisan Nasional (BN) to keep the rural vote bank solidly with the ruling coalition.
Harris, a successful corporate figure in his own right since losing the state election of 1985, is in favour of scrapping the subsidy regime immediately.
“The argument against subsidies is that when prices are adjusted back to current market prices, then the people will start feeling the pinch of high prices and the higher cost of living. They will start working harder to produce their daily basic agricultural and other necessities,” said Harris.
“The idea is to make the rural areas at least self-sufficient and the rural economy self-sustainable. They should be able to support at least 60 per cent of their daily needs. In Iran, the rural areas are 95 per cent self-sufficient in agricultural output.”
Instead of subsidies, he proposes at the same time that the Federal Government replace the scheme with monthly cash pay-outs of RM300 to each farmer willing to till his land.
This should be for a reasonable period to be worked out and agreed upon, added Harris. “This idea is not new. It has been practised in the United States and Thailand.”
“Cash saved from the subsidy scheme can be used to jumpstart the rural people out of their laziness.”
Scrap the subsidy scheme
Arguing in favour of scrapping the subsidy scheme and its replacement with the RM300 monthly cash payout scheme, he pointed out that the rural people can then start working on their vacant or abandoned land “without having to worry about where their next meal is going to come from”.
“They will grow their own rice and vegetables and make cooking oil from their own coconuts,” said Harris.
“Otherwise, the rural people will continue to live a hand-to-mouth existence and the nation’s wealth will not be re-distributed fairly.”
Harris estimates that the RM300 monthly cash pay-out in the rural areas will cost the federal government RM2 billion a month or RM18 billion for an initial nine-month period.
This, it is expected, will bring back the one million idle acres in Sabah into productive use and “besides will be cheaper than the subsidy scheme”.
Within the local context, Harris feels that monthly cash payouts to the people would more directly get the economy going again until the state and the country can reap the benefits of the global recovery which may be slow in coming.
Harris seems to particularly admire Thailand’s approach in stimulus packages and suggests that Malaysia emulate salient points from its northern neighbour.
Overall, he suggests that the federal government fork out RM300 per month to every adult in the country as well for a nine-month period.
This should be done, he points out, after doing away with the subsidy scheme including for petroleum products. School and medical fees should be scrapped as well, he adds.
How to boost economic activities
“This move is necessary to boost economic activities in the country, especially the rural areas,” said Harris. “People will spend and will keep buying domestic products. This in turn will keep the domestic consumers and factories going.”
“Thailand’s stimulus package is paying 2,000 baht (RM205) every month to everyone and this is a good move that we should emulate.”
Harris points that the United States is another country which has worked out is stimulus very well since “its US$145 billion stimulus package goes directly into the pockets of low and middle income groups, especially the workers”.
Harris makes a distinction between stimulus packages, bailouts and the government taking a stake in failing enterprises.
In contrast, Malaysia’s stimulus packages “would not benefit the low and middle income people as a large chunk of the RM67 billion would be spent for developing infrastructure and helping export-oriented manufacturing industries”.
“The objective of any stimulus package should be for the benefit of low and middle income earners. They are the ones in need and will spend.
This will in turn help to revive the overall economy,” said Harris. “The rural areas in particular need reviving. This is best done by using the money saved from abolishing the subsidy scheme.”
Harris labeled the current RM300 cash subsidy scheme enjoyed by fishermen as a form of discrimination. “What about the people in Tambunan, Nabawan, Pitas, Kota Marudu and other places in Sabah who are much poorer,” asked Harris.
The current global economic crisis, reiterated Harris, must be seen as an opportunity to redress the vicious cycle of low productivity and dependency on the government in the rural areas.
“The economic crisis is also an opportunity for Malaysia to use the stimulus packages to help the low income and middle income people to increase their economic activities and boost the economy.”
He’s not convinced the package, like the earlier RM7 billion stimulus package – too little, too late – is working at all.Sabah, for example, is dependent on its land assets, points out the former chief minister, “and this has not been addressed by the stimulus packages”.
Harris has been studying how the federal government’s recent stimulus packages can better embrace the common people in the rural and urban sectors in the country.
“If one travels along Papar, Beaufort or Penampang, one can see plenty of land but not much has been put to agricultural use,” said Harris who has taken this scenic route himself to see whether there has been any change over the years in the situation.
He estimates that at least a million acres are lying idle in the sun and blames this on government subsidies “which should have been done away with by the stimulus packages”.
Overall, he blames both federal and state government policies for shortcomings in the agricultural sector.
“These subsidies have made people lazy,” charged Harris, pointing out that “because of subsidies for rice, cooking oil and sugar, among others, not many people were too keen to toil on the land as it was cheaper to buy than to grow.
Keeping the rural vote bank BN-friendly
“In the old days, people produced their own sugar from sugar cane, salt, as well as planted such crops like rice and were self-sufficient.”
The former chief minister seems to be echoing the opposition alliance’s allegations during the recent Batang Ai by-election in Sarawak on the subsidy regime.
The opposition had alleged that the subsidies were not only keeping the people unproductive and poor but is linked to the ability of the Barisan Nasional (BN) to keep the rural vote bank solidly with the ruling coalition.
Harris, a successful corporate figure in his own right since losing the state election of 1985, is in favour of scrapping the subsidy regime immediately.
“The argument against subsidies is that when prices are adjusted back to current market prices, then the people will start feeling the pinch of high prices and the higher cost of living. They will start working harder to produce their daily basic agricultural and other necessities,” said Harris.“The idea is to make the rural areas at least self-sufficient and the rural economy self-sustainable. They should be able to support at least 60 per cent of their daily needs. In Iran, the rural areas are 95 per cent self-sufficient in agricultural output.”
Instead of subsidies, he proposes at the same time that the Federal Government replace the scheme with monthly cash pay-outs of RM300 to each farmer willing to till his land.
This should be for a reasonable period to be worked out and agreed upon, added Harris. “This idea is not new. It has been practised in the United States and Thailand.”
“Cash saved from the subsidy scheme can be used to jumpstart the rural people out of their laziness.”
Scrap the subsidy scheme
Arguing in favour of scrapping the subsidy scheme and its replacement with the RM300 monthly cash payout scheme, he pointed out that the rural people can then start working on their vacant or abandoned land “without having to worry about where their next meal is going to come from”.
“They will grow their own rice and vegetables and make cooking oil from their own coconuts,” said Harris.
“Otherwise, the rural people will continue to live a hand-to-mouth existence and the nation’s wealth will not be re-distributed fairly.”
Harris estimates that the RM300 monthly cash pay-out in the rural areas will cost the federal government RM2 billion a month or RM18 billion for an initial nine-month period.
This, it is expected, will bring back the one million idle acres in Sabah into productive use and “besides will be cheaper than the subsidy scheme”.
Within the local context, Harris feels that monthly cash payouts to the people would more directly get the economy going again until the state and the country can reap the benefits of the global recovery which may be slow in coming.
Harris seems to particularly admire Thailand’s approach in stimulus packages and suggests that Malaysia emulate salient points from its northern neighbour.
Overall, he suggests that the federal government fork out RM300 per month to every adult in the country as well for a nine-month period.
This should be done, he points out, after doing away with the subsidy scheme including for petroleum products. School and medical fees should be scrapped as well, he adds.
How to boost economic activities
“This move is necessary to boost economic activities in the country, especially the rural areas,” said Harris. “People will spend and will keep buying domestic products. This in turn will keep the domestic consumers and factories going.”
“Thailand’s stimulus package is paying 2,000 baht (RM205) every month to everyone and this is a good move that we should emulate.”
Harris points that the United States is another country which has worked out is stimulus very well since “its US$145 billion stimulus package goes directly into the pockets of low and middle income groups, especially the workers”.
Harris makes a distinction between stimulus packages, bailouts and the government taking a stake in failing enterprises.
In contrast, Malaysia’s stimulus packages “would not benefit the low and middle income people as a large chunk of the RM67 billion would be spent for developing infrastructure and helping export-oriented manufacturing industries”.
“The objective of any stimulus package should be for the benefit of low and middle income earners. They are the ones in need and will spend.
This will in turn help to revive the overall economy,” said Harris. “The rural areas in particular need reviving. This is best done by using the money saved from abolishing the subsidy scheme.”
Harris labeled the current RM300 cash subsidy scheme enjoyed by fishermen as a form of discrimination. “What about the people in Tambunan, Nabawan, Pitas, Kota Marudu and other places in Sabah who are much poorer,” asked Harris.
The current global economic crisis, reiterated Harris, must be seen as an opportunity to redress the vicious cycle of low productivity and dependency on the government in the rural areas.
“The economic crisis is also an opportunity for Malaysia to use the stimulus packages to help the low income and middle income people to increase their economic activities and boost the economy.”
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