Friday, May 16, 2008


Harris proposes RM 300 hardship allowance


Former Chief Minister Datuk Harris Mohd Salleh said the Government should abolish all subsidies, school fees and medical charges, and, instead introduce a RM300 monthly hardship allowance to every adult Malaysian. He said the hardship allowance is to be a temporary measure to help farmers move forward because when they are assured of receiving RM300 monthly from the Government, they would have the incentive and time to cultivate rice and other food crops. “In other words, farmers will not worry about where to get cash for their daily needs. The proposed hardship allowance is much easier to implement than the subsidies and will also create an equal distribution of wealth as well as inject a circulating cash flow in the rural areas,” said Harris in a statement yesterday. According to him, Malaysia’s economic policy as a whole, particularly the prominent policy on subsidies is bound to fail to sustain and uplift the standard of living of the poor people, and will eventually create an “easy going” and complacent Malaysian because everything is cheap and subsidized. Furthermore, any subsidy, apart from being difficult to manage, would in the long run have the effect of making the poor people depend too much on cheap essential foods and other commodities because of the subsidies. Therefore, it is of paramount importance that these subsidies including whatever school and medical fees imposed be abolished once and for all,” he said. To spur the rural economy, the Government should introduce a monthly RM300 hardship allowance to every adult Malaysian or a total of about RM24 billion only a year, Harris suggested. While stressing that the policy of subsidizing foods and fuel to help the poor had been proven to be not effective in the country, Harris said the poor are getting poorer in terms of present day cost, and the rich are getting richer. He said the Prime Minister Datuk Seri Abdullah Ahmad Badawi himself had even acknowledged that the diesel subsidy does not help the poor, but the middle and upper classes. He quoted the Prime Minister as having said that subsidies on diesel alone had reached RM45 billion a year. It appears that globally, prices of manufactured goods, food and of course oil, have been going up all the time. This upward trend will continue in tandem with the adjustment of oil prices into its proper value. “It must be remembered that most of the products from developing countries have been suppressed by developed countries for centuries. Compare for instance the price of timber, say 30 years ago and today, where the increase is only between 10 and 20 per cent whereas the price of D6C (logging tractor) has increased by more than 800 per cent.. “Therefore, developing countries must accept these increases as these will also eventually adjust the prices of commodities and products of developing countries which will benefit the farmers,” said Harris. The failure of rural economic policies in the developing countries, particularly Malaysia, according to Harris, is also largely due o the shortcomings of Government policies and management. “The famous Mr (Nelson) Mandela’s widely reported words that poverty is ‘our own making’ are very true. “The failure of Malaysia’s policies and programs is also due to the fact that subsidies especially of cheaper imported foods which have resulted in agricultural and other local products fetching prices far below actual labour costs. “This also means that the rural people are subsidizing the middle and upper classes and the international market. Unless and until all rural agricultural produce such as rice, are adjusted to the real international prices, the rural people will be reluctant to toil their land. “It is heartening to note that now the Thai and the Vietnamese rice farmers are getting a fair price for their rice and thus have a comfortable livelihood,” he added. Harris also said that Malaysia spent more than RM3O billion annually on tood imports and the Government had encouraged farmers to grow more and more food crops, but till this day, the trend is the other way round with the production of food crops decreasing while the import of food products continues to increase. He noted one of the reasons for these increases in food imports is the preference by Malaysians to consume imported goods such as the Avian water from France. “Surely Malaysians can produce quantities of mineral water whose quality is at par with imported ones. But why? Something must be wrong somewhere,” Harris said. According to him, there is no reason for Malaysia not being able to reduce the food imports with proper policies and programs. He recounted that successive Prime Ministers had repeatedly said that there were more than four million hectares of abandoned alienated land in Malaysia. “At least 30 per cent of these areas are suitable for rice planting. Thus, if only 20 per cent of these areas were to be cultivated, Malaysia would have the capacity to reduce its rice imports. “The removal of any subsidy which would automatically adjust the price of rice and other commodities to the real market price will provide the inceive to make planting profitable to the farmers,” he suggested. Harris said other important issues which the Government should look into are the minimum basic wage for ordinary workers and the system of piece work contract such as for harvesting oil palm fruits. He said that some plantations are still paying the same rate with little or no increase at all per ton under this system even though the price of Fresh Fruit Bunch (FFB) had increased by more than double. “Many countries around the world have a minimum basic wage and increasing piece—work contracts in which wages are paid according to prevailing market prices. It is high time for the Government to seriously consider this so as to be consistent with its various policies aimed at increasing the incomes of the poor,” Harris added.