The Malaysian Way

Electricity tariff has been raised by an average of 7%. Not everyone will be affected.

On the plus side, those who use less than RM77 a month will probably not be affected. However, those who are in this category please do not be too happy;  they will be affected indirectly.

Those who use more than RM77 a month will be affected directly.

Who are those using more than RM77? Majority of these will be middle class households in cities and towns.

If you have a fridge, 2 air-conditioners, a washing machine, do some ironing and use lights at night, you will probably be in this category. Most of us staying in KL or other towns will probably be in this category. It is no more a luxury to have air-conditioners , as our weather has become hotter compared to the 60s and 70s. Fridge and washing machines have become necessities too due to the modern lifestyle.

If you run   a small business, you will probably be affected too.

When businesses are affected, cost of doing business will go up, and this rise in overhead will be translated into higher prices of goods and services.

When that happens, even the poor and those who use less than RM77 will be affected.

For those who have millions and millions, a 7% rise in electricity and a few percent rise in prices will be small matter to them.

It is the middle class, those who earn a few thousand dollars a month, who will feel the effect of this rise in electricity tariff.

Perhaps we have no choice since oil and gas prices have soared. But as I have mentioned in an article recently, if we can plug the leakages and wastages, we will probably have more reserve to spare and we would not have to raise the tariff so much.

While many of us are scratching our heads to find ways to minimise expenses and tighten our belts further, the IPPs will be laughing their way to the banks, earning profits that is way beyond normal business practices.

Malaysians are practically dishing out money from their pockets to pay these IPPs. I would probably be less bitter– and I think many of you will feel the same– if not for the fact that I am tightening my belt to enable these companies to laugh all the way to the bank.

This is the Malaysian Way of doing business. No wonder so many would like to be near to the very top leaders, to become the so-called cronies!

I will probably be lighting candles tonight!


recommended  reading:

When belts cannot be tightened anymore


22 Comments (+add yours?)

  1. Kenny
    May 31, 2011 @ 10:25:11

    First of all, don’t believe the official statistic that 75% of users use less than RM77 electricity a month. If you have an air-conditioner in the house you will certainly not be in this category. I have personally not met anybody who use less than RM100 a month in urban and semi-urban areas. The claim of 75% not affected by this increase is highly suspect.

    Squeezing the middle class hard will lead to social discontent and political repercussion. The poor are excluded from price increase (but they will be affected indirectly), the rich can afford it but the middle class who are already struggling with cost of living always get squeezed. In this price increase the hardcore poor are also hit as the free electricity for those who use less than RM20 a month is withdrawn.

    By the way, the IPPs will not be affected by the increase in gas price. They have a “pass through” agreement with TNB whereby any gas increase is passed to TNB. This means guaranteed profits and high returns. This is the Umno way of doing business. For the rest of the commercial world, guaranteed profits and low risk means low returns.


  2. Kenny
    May 31, 2011 @ 10:28:38

    By the way, malaysiakini reports that IPP profits have reached 22% which is an astounding figure in the power generation industry.


  3. CYC
    May 31, 2011 @ 10:35:38

    I see the tide rising and tornado emerging! Its coming and u shall witness a regime change if GE13 drag on for another year or so. The people’s discontent and inability to stomach the rising cost of living will kill BN.


  4. TooMuch
    May 31, 2011 @ 12:13:42

    The whole problem is the hole problem. This is what Doc meant with the leakages, wastages, commissions that that bunch of manipulative crooks continue to siphon and drop into this bottomless “hole of greed”, compounding the misery for the average Malaysian with waves and waves of cost of living hikes.

    The middle income are probably the largest group of Tax Payers with the least relief and hard hit. How much more can be expected of this group of Malaysian tighten their belts without shit hitting the fence!


  5. Phua Kai Lit
    May 31, 2011 @ 12:14:43

    Anyone still belives in the inflation rate as declared by the Govt?


  6. monsterball
    May 31, 2011 @ 13:01:47

    Leave it to the Govt. to say what they want.
    The increase will effect 75% is more logical…but we all know how the Govt will twist and confuse all.
    Every poor hawkers I talked too…say life is getting tougher and tougher to make ends meet…and all worried how to save as much as they can for their young children future educations.
    I recalled…Mahathir said Malaysians are a pampered not know how to save money…just spent and enjoy.
    Then he stole RM1.2 billion to save his son.
    Diam told Malaysians…
    spend ..spend ..spend. Make the money go round and round”….totally opposite Mahathir’s advise….because Mahathir know how to advise others …yet he stole..cheat and lied.
    That is why….Diam and Mahathir cannot see eye to eye…for one is a crook that is smart to make Malaysians do the right things…and the other talk alot…treat Malaysians like suckers.
    75% not affected? You believe that?
    To me…this is to fool urban Malaysians for more votes.


  7. klm
    May 31, 2011 @ 16:35:29

    People I talked to, my vet, warehouse operators etc, all are cutting back back on stocks because of the increase in prices and sluggish demands. Remember the theory on velocity of money. Well money are flowing much slower these days. This means the amount of money in the market is smaller and hence the economy is smaller. How come I do not see that in the economic numbers?


  8. Kenny
    May 31, 2011 @ 20:42:33

    The official inflation rate is still 2.3%. Just comparing the price of hawker food last year and this year it has already gone up by 10% so the official inflation figures are meaningless. Maybe it will go up again after this electricity hike.


  9. KeyStone
    Jun 01, 2011 @ 04:23:07

    Now we all know what Privatization is all about! Isnt it brilliant!
    Electricity tariff increase will raise prices across the board as everything in ‘modern’ life uses energy, not kayu api anymore. The ordinary people will see their buying power reduced further. This may be unavoidable as oil and gas prices keep staying high.

    But the IPP part is rubbing salt into the wound.


  10. monsterball
    Jun 01, 2011 @ 07:24:27

    Anwar said there are Professors kangkong…carrying UMNO B balls non stop for 20 years of his obsevation.
    Suddenly…I have the urge to eat kangkong sambal balachan with a fried egg. Eat too much kangkong…no good for legs.
    I guess thousands will need to cut down eating costly vegetables and expensive fishes kangkong and cheap fishes only..more often now.
    Anyway…Mahathir said Malaysians are a pampered lot..long time ago when he was PM…don’t know how to save and budget…and after that..he took RM1.2 billion from EPF …our hard earn save his own son.
    How cruel and cunning he is…and still is.


  11. Phua Kai Lit
    Jun 01, 2011 @ 07:55:53

    The privatization cancer spreading around the globe (and giving enormous opportunities for corrupt Third World politicians and rent-seeking capitalists to “piratise”) is the final outcome of the effort of rightwing, pro-freemarket intellectuals such as Friedrich Von Hayek and Milton Friedman to combat the the rise of Keynesianism, the Welfare State and social democracy in the West after World War Two.


  12. Phua Kai Lit
    Jun 01, 2011 @ 08:53:17

    Amazing people, the Japanese and their
    sense of social solidarity!

    What about us Malaysians, can we do the same?
    e.g. register and vote, engage in other forms of
    (non-violent) political activity to bring about positive change, mobilise against the Lynas project which is going to turn Kuantan into a permanent dump site for toxic wastes?


  13. Dr Hsu
    Jun 01, 2011 @ 09:29:55

    Prof Phua
    Thanks for the story.
    For the benefits of the readers,
    I will post the article here. You can also see the video at the site Prof Phua has posted:

    A group of more than 200 Japanese pensioners are volunteering to tackle the nuclear crisis at the Fukushima power station.

    The Skilled Veterans Corps, as they call themselves, is made up of retired engineers and other professionals, all over the age of 60.

    They say they should be facing the dangers of radiation, not the young.

    It was while watching the television news that Yasuteru Yamada decided it was time for his generation to stand up.

    No longer could he be just an observer of the struggle to stabilise the Fukushima nuclear plant.

    The retired engineer is reporting back for duty at the age of 72, and he is organising a team of pensioners to go with him.

    For weeks now Mr Yamada has been getting back in touch with old friends, sending out e-mails and even messages on Twitter.

    Volunteering to take the place of younger workers at the power station is not brave, Mr Yamada says, but logical.
    Mr Yamada has been getting back in touch with old friends, sending out emails and even messages on Twitter Mr Yamada has been getting back in touch with old friends via e-mail and even messages on Twitter

    “I am 72 and on average I probably have 13 to 15 years left to live,” he says.

    “Even if I were exposed to radiation, cancer could take 20 or 30 years or longer to develop. Therefore us older ones have less chance of getting cancer.”

    Mr Yamada is lobbying the government hard for his volunteers to be allowed into the power station. The government has expressed gratitude for the offer but is cautious.

    Certainly a couple of MPs are supporting Mr Yamada.

    “At this moment I can say that I am talking with many key government and Tepco people. But I am sorry I can’t say any more at this moment. It is on the way but it is a very, very sensitive issue politically,” he said.
    Continue reading the main story
    “Start Quote

    We are not kamikaze… They were going to die – but we are going to come back ”

    Yasuteru Yamada

    Certainly it is likely more workers will be needed.

    The plant is still spewing radiation, nearly three months after an earthquake and tsunami knocked out its cooling systems, triggering explosions.

    Its operator, Tepco, has now confirmed three of the reactors probably suffered meltdowns.

    The plan is to bring the plant to a cold shutdown by January, although some experts believe that is over optimistic.

    To cope with the disaster Japan has raised the radiation exposure limit for emergency workers from 100 millisieverts to 250 millisieverts.

    But Tepco announced this week two workers at Fukushima might have already been exposed to more.

    Many of Mr Yamada’s veterans are retired engineers like him.
    Michio Ito Michio Ito is keen to swap his apron for a radiation suit

    Others are former power station workers, experts in factory design – and even a singer and two cooks – Mr Yamada says they will be useful to keep his team amused and fed.

    Michio Ito used to be a primary school teacher but is spending his retirement helping out in a cafe that offers work experience to people with learning difficulties.

    He is keen to swap his apron for a radiation suit.

    “I don’t think I’m particularly special,” he says. “Most Japanese have this feeling in their heart. The question is whether you step forward, or you stay behind and watch.

    “To take that step you need a lot of guts, but I hope it will be a great experience. Most Japanese want to help out any way they can.”

    Mr Yamada has already tried on his old overalls for size.

    He says he is as fit as ever – with a lifetime of experience to bring to the task.

    And he laughs off suggestions his proposed team is comparable to the kamikaze pilots who flew suicide missions in World War II.

    “We are not kamikaze. The kamikaze were something strange, no risk management there. They were going to die. But we are going to come back. We have to work but never die.”


  14. Dr Hsu
    Jun 01, 2011 @ 10:16:03

    The government should not have increased the electricity tariff without first exhausting other avenues. It could have engaged the IPPs , and find a solution on the unfair practices that are currently in place.

    If the IPPs do not agree, there are ways for the government to act to ask them to contribute to ‘national duty’.

    Why punish the poor and the middle class in towns and cities at the risk of losing their support?

    Fighting inflation should be treated as priority and ‘war’, not winning General Election. PM should have shouted ” defend against price hike”, not ” defend putrajaya”.

    They have got the priority all wrong! These bunch of politicians….Sigh!


  15. CYC
    Jun 01, 2011 @ 10:50:38

    If the govt can impose wind fall tax on oil palm industry, why can’t they impose some kind additional tax on IPP to recoup some sinful gain of IPP? Or they actual did that but the money gone private purse?

    Just look at Indonesia, how could they maintain their interest rate for the past 24 months and kept inflation rate steady as before ? They subsidised fuel price and essential goods, their exchange rate improves. Subsidy is not a bad thing as long as the benefits flow back into the economy loop and not leaks into somebody’s private purse. The argument of subsidy being a bad thing is simply half-baked theory.

    Malaysia is slowly losing its attractiveness as preferred place of foreign investors as our last forte of having a fair and complete legal system collapsing systematically for the past decades. Similarly, our command of English also deteriorated tremendously.


  16. CYC
    Jun 01, 2011 @ 11:25:33

    The stupid SUPP minister Peter Chin said govt has no right to reveal IPP agreement. Then how could they had right to make a “classified” documents? Don’t use your mouth to fart, Mr minister.

    Just watch how this hike in electricity tariff will cause a spiral effect on our cost of living and how many Malaysians will be under nourished if this trend continues.


  17. Dr Hsu
    Jun 01, 2011 @ 12:22:10

    In fact i have voiced out this to the leaders before.

    Negotiate again with the IPPs, and if they do not or are not willing to find solution to the lopsided agreements, government impose a stiff tax on them…

    Sometimes, you need a stick when they refuse the carrots.


  18. A true Malaysian
    Jun 01, 2011 @ 15:46:16

    The people behind the IPPs are all filthy rich. These people can afford not to work further and their wealth can last many generations.

    If these ‘privileged’ Malaysians can have the attitude like the Japanese in BBC’s report, Malaysia can be a great country overnight. But, no, they will not be contented, ‘greed’ is the driving force for them to ‘not even strive’ on, their IPPs are like ‘golden goose’ and ‘money tree’.

    The only way is to change government.


  19. A true Malaysian
    Jun 01, 2011 @ 17:14:26

    Now we see the effect of appointing ministers etc, etc on ‘quota’ instead of merit basis. Their statements make me think whether they are dumb or I too smart.

    Perhaps only the dumb one can be in Cabinet, but amongst the dumbs there can be smarter one or dumber one, like the movie, Dumb & Dumber.

    Dumber & Dumber makes us laugh, de-stressed ourselves, but a Cabinet like that makes us poorer, sick, cry, stressed…

    Prof Phua is right, let’s mobilise…..


  20. CYC
    Jun 01, 2011 @ 17:38:13

    No point voicing to”leaders” as they are not our leaders. Better let the mass know what is their right and what were the bad things/cheating done without their knowledge. That is more meaningful.

    Back to Lynas rare earth project in Kuantan, why majority are silent on the stupid/selfish act of the Australians. Of course the Malaysian govt is wrong, but what about the Aussies ? They should be kicked out of our soil but most of you choose not to offend them simply because your children are in Australia to pursue their education or …..? Shame on your selfish act for those who think along this line.


  21. KK
    Jun 02, 2011 @ 15:32:33

    We have the grand Mamak to thank for all these lop-sided agreements .

    Another example is the broad daylight HIGHWAY robbers in the form of concessionaires of tolled highways.


  22. sosong
    Jun 05, 2011 @ 22:47:25

    Govt cannot reveal contract w IPPs, top secret?? then govt can never convince rakyat on their reasons for the increase in electricity tariff !
    Anyway, Malaysians should consider energy saving measures, like use less air cond. use more energy efficient air cond. or energy saving LED lights, generate some electricirty from solar panels, use solar water heater, etc.
    High cost of electricity or fuel, will be fact of life soon for everyone!


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