Ku Li: Putrajaya should rethink economic policies as income gap widens

By Shannon Teoh - The Malaysian Insider

KUALA LUMPUR, June 19 — Tengku Razaleigh Hamzah believes Putrajaya should rethink its economic polices as the income inequality has widened in Malaysia and is now a problem across all races despite Barisan Nasional’s (BN) claim of promoting a welfare state.

The former finance minister also called for a review of affirmative action policies, saying last night the view that “if ownership was de-racialised or balanced at the top, economic justice would follow is no longer a valid premise for the future.”

“Income inequality in Malaysia has widened (and) is no longer a problem between races; it crosses the racial divide and it is a problem of the majority of Malaysians who feel the pressure of inflation in almost every essential aspects of their lives. This is the most serious challenge we face,” the Gua Musang MP said in a speech in Taiping last night.

Barisan Nasional leaders including Prime Minister Datuk Seri Najib Razak had insisted that the ruling coalition has already implemented a welfare state in response to PAS’s recent shift from an Islamic to a welfare state agenda which aims to redistribute profits earned by GLCs and crony companies to the general public. 

However, the Kelantan prince questioned the management of state finances, stating that if the current administration’s struggles with the budget deficit was a “result of wastage, corruption and extravagance in the use of public funds, then the solution to the problem should not be passed on to the public.”

“What is needed is a re-examination of the management of the country’s finances before... any change in the policy of subsidies be implemented, as the consequences would have a life-changing impact on the livelihood of the people,” said the veteran politician popularly known as Ku Li (picture).

Putrajaya has committed itself to slashing a budget deficit that hit a two-decade peak of 7 per cent in 2009 to 5.4 per cent this year and has made cuts to a subsidy bill that would otherwise double to RM21 billion this year.

The hikes in prices of items such as fuel, electricity and sugar come despite surging inflation which hit a two-year high of 3.2 per cent in April, fuelling public anger ahead of a general election expected within the year.

Opposition politicians have called for a review of the subsidy cuts and want a bi-partisan panel to look into Tenaga Nasional Berhad’s (TNB) power purchase agreements which are said to favour independent power producers (IPPs).

Tengku Razaleigh also picked out “the moral inconsistency” of how national oil company Petronas has recorded “mind-boggling” profits over the years including a RM90.5 billion pre-tax profit this year but yet “the greatest poverty is found in the petroleum producing states of Kelantan, Terengganu, Sarawak, and Sabah.”

“Petronas was set up with the objective of serving the nation’s interest as a priority. The aim of making Petronas a multinational cooperation at the expense of national interest is contrary to the Petroleum Development Act,” said the Kelantan prince, who was instrumental in the founding of Petronas.

He also criticised Malaysia for being the only rice producing country that has privatised rice production and given it to politically-linked Tan Sri Syed Mokhtar Al-Bukhary’s company, Padiberas Nasional Bhd (Bernas), a monopoly over the market.

“The reality today is Thailand and Indonesia are self sufficient in rice and we are 30 per cent dependent on imported rice. But because it is a monopoly, imported rice is cheaper in Singapore than Malaysia.
“Privatisation for the benefit of private individuals to profit from such an essential commodity is a clear abuse of power,” Tengku Razaleigh added.