By G. Manimaran - The Malaysian Insider
Bahasa Malaysia Editor
KUALA LUMPUR, April 6 — The government must review power and toll concessions, and also introduce a minimum wage, if it wants Malaysia to be a high income nation under the New Economic Model (NEM), an economist said last night.
Bank Islam chief economist Azrul Azwar Ahmad Tajudin urged the Najib administration to make an in-depth review of the toll concession and Independent Power Producers (IPP) contracts, saying both were direct burdens to the people.
“The consumers’ expenses have a big potential ... where it can be generated to contribute to the country’s growth,” he told an NEM forum organised by the Dewan Bahasa Pustaka (DBP) here.
The government last week unveiled the NEM to turn the country into a high-income nation and do away with subsidies and rent-seeking practises while ensuring affirmative action was needs-based.
But Azrul Azwar said there were direct methods to achieve the NEM aims.
“I propose that the government review concessions for the highways and IPPs so that the people won’t be burdened with regular hikes every two to three years,” he said, adding a minimum wage policy would also accelerate the NEM goals.
The economist said both his suggestions would go towards reaching the NEM target of raising the per capita income from US$7,000 (RM22,628) to US$15,000 by 2020.
Statistics show that some 80 per cent of the workforce has only SPM-level certificate which limits income potential and Azrul Azwar said any hikes would adversely impact workers.
“When there is a price hike, workers will feel the rise in cost of living and will be careful in spending money,” he pointed out.
But the Institute of Strategic and International Studies (ISIS) chief executive officer Dr Mahani Zainal Abidin said she could only agree to a minimum wage policy if the employers are given the mandate to sack workers who fail to meet productivity targets.
Mahani also said not all developed countries subscribe to a minimum wage.
“There are countries who do not follow the minimum wage system, including Singapore,” she said, adding there should be a salary hike mechanism agreeable to the government, employers and workers.
“For me, a minimum wage is possible with conditions,” said Mahani, reiterating the need for productivity targets and the employers’ right to dismiss workers who do not meet such targets.
Demands for the government to have minimum wage policies and review the concessions have cropped up over the years since it embarked on a privatisation programme in the 1980s particularly for tolled road projects where rates are adjusted annually and hikes implemented every three years.
In cases where there are no toll rate hikes, the government will have to compensate the toll concessionaires directly.
Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said last month that the first phase of a toll road rate restructuring programme has been completed and the Economic Planning Unit (EPU) is in talks with the toll concessionaires and other quarters over the matter.
Nor Mohamed said the government was looking for the best mechanism to ensure the restructuring exercise will not impact on the low-income groups.
State power utility Tenaga Nasional Berhad (TNB) last year proposed the government to review the power production agreement with the IPPs to ensure it benefits the people.
TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh had said that any savings from a renegotiation of rates with the IPPs would lead to lower tariff rates for the consumers.
Bahasa Malaysia Editor
KUALA LUMPUR, April 6 — The government must review power and toll concessions, and also introduce a minimum wage, if it wants Malaysia to be a high income nation under the New Economic Model (NEM), an economist said last night.
Bank Islam chief economist Azrul Azwar Ahmad Tajudin urged the Najib administration to make an in-depth review of the toll concession and Independent Power Producers (IPP) contracts, saying both were direct burdens to the people.
“The consumers’ expenses have a big potential ... where it can be generated to contribute to the country’s growth,” he told an NEM forum organised by the Dewan Bahasa Pustaka (DBP) here.
The government last week unveiled the NEM to turn the country into a high-income nation and do away with subsidies and rent-seeking practises while ensuring affirmative action was needs-based.
But Azrul Azwar said there were direct methods to achieve the NEM aims.
“I propose that the government review concessions for the highways and IPPs so that the people won’t be burdened with regular hikes every two to three years,” he said, adding a minimum wage policy would also accelerate the NEM goals.
The economist said both his suggestions would go towards reaching the NEM target of raising the per capita income from US$7,000 (RM22,628) to US$15,000 by 2020.
Statistics show that some 80 per cent of the workforce has only SPM-level certificate which limits income potential and Azrul Azwar said any hikes would adversely impact workers.
“When there is a price hike, workers will feel the rise in cost of living and will be careful in spending money,” he pointed out.
But the Institute of Strategic and International Studies (ISIS) chief executive officer Dr Mahani Zainal Abidin said she could only agree to a minimum wage policy if the employers are given the mandate to sack workers who fail to meet productivity targets.
Mahani also said not all developed countries subscribe to a minimum wage.
“There are countries who do not follow the minimum wage system, including Singapore,” she said, adding there should be a salary hike mechanism agreeable to the government, employers and workers.
“For me, a minimum wage is possible with conditions,” said Mahani, reiterating the need for productivity targets and the employers’ right to dismiss workers who do not meet such targets.
Demands for the government to have minimum wage policies and review the concessions have cropped up over the years since it embarked on a privatisation programme in the 1980s particularly for tolled road projects where rates are adjusted annually and hikes implemented every three years.
In cases where there are no toll rate hikes, the government will have to compensate the toll concessionaires directly.
Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said last month that the first phase of a toll road rate restructuring programme has been completed and the Economic Planning Unit (EPU) is in talks with the toll concessionaires and other quarters over the matter.
Nor Mohamed said the government was looking for the best mechanism to ensure the restructuring exercise will not impact on the low-income groups.
State power utility Tenaga Nasional Berhad (TNB) last year proposed the government to review the power production agreement with the IPPs to ensure it benefits the people.
TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh had said that any savings from a renegotiation of rates with the IPPs would lead to lower tariff rates for the consumers.
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