Categories
Economics Politics & government Society

[1595] Of flawed policy, not flawed implementation

While I am happy with a new path made possible by the recent general election, I am slightly disappointed at the way DAP and PKR are dismissing the outmoded New Economic Policy. Prior to the election and the campaigning period, I was impressed at how the two parties leaders were rejecting the NEP at the policy level. During the campaigning period however, there was a subtle change in reasoning. Suddenly, the NEP is being rejected because of its flawed implementation.[1] While obviously annoyed at the change of approach, I kept mum throughout the contest; there is time for a debate and there is time to bite one’s tongue. When there is an enemy in front of oneself and the situation is pressing, one does not conduct a debate with one’s compatriots on how to outmaneuver the enemy. Instead, one pulls his knife out and march forth. But now with the enemy vanquished, the time for the debate has arisen yet again.

The NEP is an outdated policy because it fails to adapt itself to new reality of freer global market. At one time given the landscape of the 1970s, it was a suitable policy but now, it is clear that the NEP is one barrier the Malaysia must overcome to realize a freer market and achieve greater prosperity. Another reason is that there are better policies out there that seek to eradicate of poverty or more realistically, provide social mobility compared to the NEP. The NEP assumes that only the Malays are poor whereas in fact, the Malays are not economically homogeneous and neither are other ethnic groups in this country. In other words, the NEP is a blunt policy. A better policy with the intention of providing social mobility and equality of opportunities are the ones that are conscious of socio-economic indicators — meritocracy.

The NEP is being exploited exactly because it is a blunt policy. With its flawed or outdated assumption that all Malays are economically backward, the well-off Malays are undeservedly receiving aid despite the fact that they can effort to live comfortably without any kind of affirmative action. Due to the way the policy is designed, benefits meant for the poor are now enjoyed by others. This rationale parallels the thinking that fuels the awfully badly designed fuel subsidy policy in Malaysia.

Observe how the flaw is at the policy level and not at the implementation stage. When the policy is flawed, its innate handicap is merely being executed at the implementation stage.

Rejecting the NEP because of its flawed implementation is a flawed thinking. Economist Mahani Zainal Abidin said several days ago something to the effect that if the implementation of the NEP is flawed, then policy should be retained with only its implementation processes modified to make it more effective. She is absolutely right.

If the NEP is to be rejected, its rationale has to be deeper than mere flawed implementation.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — Demikian penegasan Menteri Besar Selangor, Tan Sri Abdul Khalid Ibrahim mengenai pendiriannya mengenai pelaksanaan Dasar Ekonomi Baru yang dikatakan akan dihapuskan di bawah pentadbiran DAP di Pulau Pinang.

“Apabila tahun 1990-an, kita dapati DEB telah disalahgunakan yang hanya mementingkan segelintir masyarakat Melayu dan segelintir masyarakat Cina dan India yang mempunyai hubungan dengan Umno,” katanya dalam sidang akhbar yang diadakan di Kediaman Rasmi Menteri Besar, di sini, hari ini. [“DEB disalahguna, diselewengkan” – Tan Sri Khalid. HarakahDaily. March 17 2008]

Categories
Economics Politics & government Society

[1588] Mengenai tanah yang lebih subur

Walaupun bertahun sudah berlalu, teringat lagi bagaimana rasanya pertama kali melangkah ke dalam Kolej Melayu. Institusi itu menjanjikan satu masa hadapan yang cerah kepada mereka berpeluang menjejakkan kaki di situ. Peluang bagaimanapun memerlukan satu perubahan pahit yang perlu ditelan. Untuk mencapai bintang-bintang di langit, segala kebebasan dan kemewahan yang dinikmati sebelum ini harus dilupakan. Masalah untuk menyesuaikan diri timbul; perasaan gementar menguasai jasad. Setiap hari baru dimaki hamun, hari yang dahulu dikenang. Apabila tibanya masa untuk meninggalkan Kuala Kangsar, tanpa disedari air mata berlinang di pipi.

Perkara yang sama berlaku apabila diri ini pertama kalinya merentasi Lautan Pasifik yang luas. Sekali lagi perubahan berlaku dan rutin kehidupan dimusnahkan tanpa belas kasihan. Ketakutan menyelubungi tubuh memikirkan apa yang bakal didepani. Amat berbeza daripada Kuala Kangsar, di Amerika adalah satu masyarakat asing tetapi jauh lebih matang dan moden, tatkala dahulu terbiasa dengan satu dunia di bawah tempurung, di mana kita kononnya tuan. Terkeluar dari tempurung, langit biru dan sinaran matahari mencabar pemahaman sempit dan seterusnya memaksa pengarangan falsafah baru untuk menyelesaikan masalah baru. Tetapi diketahui, di sebalik perubahan itu wujud satu peluang tidak terhingga untuk dikecapi. Perubahan itu harus ditempuhi demi kejayaan.

Lebih 50 tahun selepas Tanah Melayu bebas daripada tangan penjajah, Malaysia sekarang melalui satu perubahan yang layak dicatat di dalam buku sejarah. Kawan dan lawan semuanya terkejut akan terbukanya satu laluan baru ke arah matlamat agung.

Untuk mencapai kegemilangan, pengorbanan diperlukan. Pintu terbuka dan kelihatan satu denai ke tanah yang jauh lebih subur; kekabut dibersihkan oleh sang angin dan hala tuju kini jelas. Akan tetapi, denai itu mendaki gunung-ganang dan merentasi hutan belukar; usaha dan kecekalan diperlukan.

Untuk yang bercita-cita tinggi dan yang berkeyakinan, halangan itu bukanlah satu masalah. Kepada yang lain, mereka takut untuk mencuba walaupun satu takdir yang jauh lebih hebat daripada apa yang berada di sini menanti di sebalik banjaran. Bagai dipukau dengan dongengan, denai dijauhi. Bukan sahaja mereka takut, malah mereka menghalang yang lain daripada meniti denai itu. Mereka takut jika yang lain berjaya, dongengan itu akan musnah. Bagi mereka, dongengan itu terlampau suci untuk dicabar. Bagi mereka, jika dongengan itu dikapankan, mereka terpaksa mendaki gunung itu. Mereka risau mereka perlu mendaki gunung-ganang itu jika mereka tidak mahu ditinggalkan.

Ribuan tahun menetap di kampung, realiti dunia juga mula dilupakan. Dunia berubah tetapi dia tetap dengan caranya yang kolot dan tegar. Dia tidak mampu memahami perubahan lalu dia menolak realiti baru sebagai tidak relevan. Dengan dunia sebagai tidak relevan, dia meneriak di dalam tempurungnya tentang betapa hebat dia di dalam alam kecilnya. Kesian tetapi yang sedar tidak mampu untuk menunggu mereka yang tidur.

Dunia sekarang jauh berbeza dari dunia 1970-an. Jika dulu kita memperkatakan tentang Vietnam, sekarang kita berbincang tentang Iraq. Jika dahulu kita masih lagi berdebat tentang jenis hak pemilikan harta, kini pasaran bebas telah membuktikan kegagahannya. Pada masa yang sama, telegram memberi laluan kepada internet. Dan jika dahulu rakyat masih mempunyai prasangka buruk terhadap mereka yang berlainan warna kulit, sekarang satu idea mula didokong untuk menyatukan semua tanpa mengira agama dan kaum.

Dasar Ekonomi Baru dibentuk berlatarkan satu suasana yang asing kepada generasi baru. Suasana itu adalah satu situasi di mana ekonomi-ekonomi masih berdiri secara berasingan. Modal dan buruh terkongkong lalu kekayaan dan kesejahteraan boleh dibina di atas sebidang tanah yang dikelilingi tembok tinggi. Apabila Tembok Berlin tersungkur, arus globalisasi mula terpasang. Pasaran mula menjadi bebas, modal dan pakar-pakar mula mencari pulangan terbaik tanpa mengira sempadan.

DEB gagal mengambil kira akan perubahan ini. Tembok yang membolehkan DEB berjaya telah dilanggar dan kemudian diranapkan oleh gelombang globalisasi. Tanpa tembok ini, kaedah DEB tidak berkesan. Sekatan dan diskriminasi yang dikenakan oleh dasar lapuk itu hanya menghalaukan modal dan pakar keluar dari negara kita; DEB adalah antara sebab mengapa Malaysia mengalami kehilangan kepakaran secara berterusan. Jika dasar ini berterusan, Malaysia akan tertinggal berbanding negara-negara yang mengamalkan polisi yang lebih bebas yang mengambil kira keadaan semasa. Kita perlu menarik yang terbaik ke negara kita, bukan menghalau mereka dan kebebasan adalah satu faktor yang berkesan untuk menarik pelbagai sumber yang produktif.

Tambahan lagi, DEB gagal kerana dasar itu tidak mengajar kumpulan yang ingin dibantunya tentang cara untuk bersaing dengan sihat. Apa yang pada mulanya satu usaha untuk mempercepatkan kematangan kini menjadi dadah yang menguatkan ketagihan.

Setelah sekian lama berada bersama DEB, ramai yang sudah ketagih dengannya. Ramai lagi yang bersedia untuk mempertahankan dasar lapuk itu walaupun rekahan mula muncul dan mengacam untuk merobohkan menara yang terbina, seolah-olah DEB itulah segala-gala. Seolah-olah, DEB itulah kebenaran untuk sepanjang zaman seperti konsep kewujudan ketuhanan tanpa permulaan dan pengakhiran.

Kita sebagai masyarakat perlu prihatin terhadap perubahan. Tanda-tanda di sekitar kita perlu diambil kira; tumbuhan yang dulu menghijau kini layu dan kuning; bumi yang kaya dahulu kini kering kontang. Untuk mengelakkan kejatuhan tamadun, satu penghijrahan diperlukan. Kita perlu mengatasi ketagihan kerana ketagihan membawa kepada kejatuhan. Ayuh kita bergegas ke tanah yang lebih subur sebelum terlambat.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

p/s — satu versi tulisan ini telah diterbitkan di Bolehland.

Categories
Economics Politics & government

[1561] Of deficit reduction through increased spending!

BN’s manifesto says that it promises to reduce fiscal deficit:

In its election manifesto, Prime Minister Abdullah Ahmad Badawi’s coalition also pledged to create two million new jobs, encourage one million new businesses and rein in the fiscal deficit over the next five years. [Malaysia PM woos non-Malays in election manifesto. Reuters. February 25 2008]

I wonder, I wo-wo-wo-wo-wonder, how is he going to do that with his planned increase in public spending for IDR, NCER, ECER, SCORE, SDC, OMG, WTF, LOL, ROTF, ZZZ, etc, etc…

Will it be through private finance initiative? Or based on hope that the economy will improve tremendously? Or through multiplier effect brought upon by projects implemented? Or taxation? Or what?

Categories
Economics

[1550] Of a weakness of universal healthcare program

While it broke the then political noise level some weeks back, discussion on welfare state never took off in a satisfying manner. PAS was the one that rolled the ball but apart from rhetoric and how Islam advocates a welfare state, actual details have been sparse and it is unclear how much thought has gone into the proposal. That notwithstanding, an idea of a welfare state almost always involves an establishment of a universal health care program to at least provide subsidized health care to all citizens. While the goal of universal health care is noble, it is not necessarily the perfect or even a desirable policy, with all things being constant.

Again, the goal of the policy is admirable. It is really hurtful to witness sick individuals unable to gain access to drugs or health facilities because he cannot afford it. Kantian categorical imperative may work to force us to provide the needy individuals with help. Universal health care policy provides us with just the tool we need to answer our conscience and absolve our guilt by doing supposedly the greatest good for the greatest number of people. Categorical imperative or not, validly utilitarian or not, it is wise for us to take a step back and consider a weakness of universal health care program — by implication, welfare state as well — before we jump off the ledge into a possibly 10 feet deep dry pool.

Universal health care does little to encourage healthy behavior. The rationale behind this relates to one essential lesson in economics: people respond to incentive, perverse or otherwise. Smoking is a clear example of this.

There is a number of health risks associated with excessive smoking of tobacco. With a universal healthcare system in place, smokers do not have to overly worry about treatment cost. This takes away the disincentive to smoke. Indeed, smokers do suffer when their health is adversely affected but they do not terribly suffer due to availability of modern and effective subsidized or even free treatments. Pain is a strong incentive to stop smoking and universal health care takes away that incentive.

In many cases, it may already be too late for those that have finally paid the price. The younger generations on the other hand have the opportunity to learn from others’ past mistakes. The availability of a free health care system however fails to emphasize the adverse effects of smoking and so, offers limited lessons to learn from. When the young observe that their elders do not suffer too much from smoking, they recalibrate the weight between gratification from smoking against its associated future increased health risks. These rational individuals do so because the welfare state policy encourages them to favor enjoyment derived from smoking and discount the associated health risks.

Such system is often funded by public resources. Riddles of high maintenance cost await a system that happily provides free treatments but falls terribly short in preventive measures.

In purchasing typical health insurance, one of few questions that affect premium calculation revolves around tobacco: do you smoke? If the answer is yes, the premium would go many notches up to match uncertainty — or really, increased certainty — linked with smoking. In a system which the risk cannot be compensated, it will struggle to keep up with demand in the long run and somebody will have to pay for it. When the giant collapses, I pray that I will not be there.

A compulsory health insurance scheme may partially solve that problem but that involves coercion. As a libertarian, I do not favor it. Besides, not everybody requires the kind of insurance offered by that scheme.

Admittedly, scenarios involving tobacco smokers in a universal healthcare system is somewhat specialized. There are individuals that suffer diseases right from birth and their behavior may not be adversely affected by a universal health care. Yet, there are other cases that run parallel with smoking such as over-consumption of sugar or cholesterol and crucially, those cases illustrate how skewed cost and benefit created by a universal health care system adversely affect judgment and only to eventually undermine the system itself.

Lesson?

A universal healthcare system, much like other welfare state policies, does not target the root cause of the problem. In hope to achieve immediate good rather hastily, it distorts incentives and causes greater problem in the future. Is that the kind of system worth investing in?

Categories
Economics

[1548] Of superlatives for Exxon and GM

By recording USD40.6 billion profit, Exxon achieved the best ever result for the whole history of the US. GM on the other hand recorded the largest ever loss in the history of the US by losing USD38.7 billion.

Hmm…