Bankruptcy! it is not impossible

One minister, Idris Jala, who was a successful manager of Shell Malaysia, declared that Malaysia would be a bankrupt country by 2019 if we do not change the ways we subsided things. I commend him for being honest and bold.

Malaysian government estimates that the subsidies cost us more than 70 over billion a year. But the fact is, we cannot term money spent on education as subsidy, nor can we term healthcare expenses subsidy.

As long as taxes are paid and collected, it should be used to develop  a good education system and healthcare , since this is the basic things expected of any government  elected by the people  and  for the people.  Just like people expect to have a good police force to guard their security, a fair judiciary which would be useful to protect the basic rights of every citizen, and an armed forces to protect our sovereignty.

What we should term as subsidy should only be the money used to subsidise certain foodstuff, and petroleum.

Economists will tell you that subsidies are bad because it distorts the market and the economy. I have no doubt that this is true and i have voiced out that these forms of subsidies must be SLOWLY and Gradually be done away with.

One subsidies are slowly being withdrawn  there must be a system to take care of the poor, and even the lower middle groups living in urban areas. Perhaps a system of giving out cash cards for the purchase of basic things for subsistence like necessary foodstuff, basic clothing etc should be considered. Perhaps some of you good in economics can give better ideas.

Another area where we should and must cut our spending is the civil service. We have 1.1 million civil servants, which by any standard is considered a big number. A system to improve civil service productivity must be implemented, and some of the departments and agencies can in fact be merged. Those reaching retirement age must be retired and not have their service extended.

ANother way is of course there must be political will to tackle corruption, which is so rampant now.  I think corruption at least takes away 10- 20% of  our development budget, and if this can be minimised, then we can easily  balance our budget.

This year the budget deficit is about 5.6% , better than more than 7% last year. But we have been having deficit budget for so long that part of our revenue ( and increasing bigger  portion too, I would say) has to be used to service loan payment. Once the loan amount accumulates until we cannot afford to pay, we will be facing technical bankruptcy. We need to urgently address this problem. There must be a strong political will to tackle corruption, and no one big or small must be hauled up to face the law, if he or she is deemed to be corrupted.