Subsidies do help have-nots

Malaysia fought and won in the last financial crisis not solely because of our Ringgit-US Dollar peg, but also because of our resistance to the temptation of taking loans from the International Monetary Fund (IMF) to shore up our economy on terms totally unacceptable to us.

One may recall that before the country could get any IMF assistance, one of the most difficult IMF medicines to swallow was the condition to reduce Government subsidy on petrol, food, etc.

Today we are better off without any loan from IMF and we all manage to survive.

But it is rather sad that today all our erstwhile heroic deeds are forgotten. In fact we are actually falling into the trap of the IMF and the powers of the West who do not want to see economies like ours emerge to compete with them.

It is hard to figure out why we are now self-imposing reduction of Government subsidies, albeit progressively in some cases.

First, we had increased twice petrol prices in one year on the grounds that the Government can no longer afford to take care of the "huge" subsidy needed.

Then come the latest which is more mind boggling - the reduction of subsidy, effective from next year, on medicines provided in Government hospitals (NST Dec. 4 2004)

That there is abuse by a handful of patients of the system because the charge on the medicines is pittance is not sufficient reason to make sweeping changes to the system to punish the innocent majority.

In the pipeline is the withdrawal of subsidy on diesel (NST Dec. 5 2004).

One wonders what is next on the chopping block. No more free education at lower levels and increase charges on higher level of education?

Subsidising social-economic needs is a good way of addressing imbalance between the "have" and the "have-nots". In the West, as the gap between the two is not big, they can afford to have any kind of economic policies to suit their fancy.

Not in our case. The gaps between the rich and the poor are visibly getting wider as we boldly march into the era of Vision 2020 to be a developed nation. So it is long way to go for Malaysia to justify doing away with Government subsidies for correction of economic imbalances that invariably exists in the complicated Malaysian context.

Let's face it. The geopolitics of every country is different. Let us not simply copy the West blindly and get into a "no-subsidy" frenzy now. 2008