Monday, 08-Sep-2003 2:01 PM

Taking advantage of hindsight

Last week, the local Malay media carried a statement by one-time National Justice Party Deputy President, Dr Chandra Muzaffar, that Anwar Ibrahim had erred in his economic policies and that Malaysia would be bankrupt by now if Malaysian Prime Minister Dr Mahathir Mohamad had not intervened.

One question that comes to mind is; what makes Dr Chandra think that Malaysia is not already on the brink of bankruptcy? Another question that one needs to ask, even if Malaysia is far from bankrupt; which is a point that can be argued; would Malaysia be better off now if Dr Mahathir had not been allowed a free rein?

It is like arguing that one is a millionaire, therefore one must be smart because of it. It is easy to be a millionaire when one already had millions to start off with. However, if someone had else been running things, would he or she be a billionaire now instead of a mere millionaire?

When the 1997 Asian Economic Crisis first erupted, Dr Chandra did not have any solutions to offer. Then, he thought Malaysia’s economic woes were due to Dr Mahathir’s bad policies. Today, on hindsight, he says Dr Mahathir was right and Anwar was wrong. It’s easy being an “expert” on hindsight. Anyone can be an “expert” taking the advantage of hindsight. It is having foresight that is difficult.

British Prime Minister Margaret Thatcher faced this same dilemma some time ago. Britain was then facing an economic crisis and there were many experts who opposed her way of handling the British economy. Instead of adopting the many conflicting recommendations, she just chose to do nothing. Eventually, over time, the economy corrected itself with no help from the government.

This just goes to show, even if you do nothing, given time, things eventually come back to normal.

Malaysia may be back to normal. But this does not mean this was because of Dr Mahathir’s wise policies. Even when Mrs Thatcher left things alone things still came back to normal. The only thing one does not know is, how much faster would Britain have come back to normal if the government had intervened? Would it have happened earlier? And what level of normalcy are we talking about? “Normal” could be back to where you were whereas things could instead have been further ahead with better policies.

We are basically talking about levels here. You may have been broke before and now are in debt. If you can clear your debt and get back to just being broke, then, in comparison, you are “back to normal”. But why should you be broke in the first place? Should you not maybe be rich instead? And being broke may be “normal” to you but may not be to someone else.

Let us look at just one source of revenue for the country, petroleum. Petronas, the national oil corporation, has been earning revenue from oil and gas since 1978. That is 25 years. How much has Petronas earned in these 25 years?

Terengganu State earns a mere 5% in oil royalty and it comes to about RM1 billion a year. This means Petronas earns about RM20 billion a year. And Terengganu supplies about half the oil with East Malaysia supplying the other half. This means, in total, it is about RM40 billion a year.

Let us discount this by 50% to make up for production and price fluctuations. Over the 22 years that Dr Mahathir has been Prime Minister, Petronas has earned no less RM440 billion; RM500 billion since Petronas has been in existence. And we have discounted this by 50% mind you, if not we would be talking about RM1,000 billion.

Now, where has all this money gone? Can we account for it? Petronas answers only to the Prime Minister. It need not table its accounts in Parliament and need not answer any questions Parliament may pose it. The Prime Minister, and the Prime Minister alone, decides how the hundreds of billions of Ringgit are spent.

Yes, we may be back to normal. We may be back to where we were prior to the 1997 Asian Economic Crisis. But, if the economy and the Petronas billions had been better managed, should we not instead be better than just back to normal?

I know of one Chinese tycoon who took over his father’s sprawling business empire. His father was a rags-to-riches man who started life, literally, as a ragman. He bought and sold old bottles. When he died, his son took over and maintained the business.

Many other Chinese businessmen, however, criticised him. They said the business should be a multi-billion business instead of just maintained at what it is. If someone else had taken over, they said, if would be many times bigger by now. To these other Chinese tycoons, the son had failed, though he was still rich, because he should by now be many times richer than his father in the 25 or 30 years he had taken over the business.

Success, therefore, is relative. Even a tycoon can be regarded as a failure if there is no marked improvement in his wealth over the decades since he has been in charge. He need not go broke. Just staying rich is the mark of a failure if his wealth remains the same.

In short, you go backwards if you run on the spot, even if you don’t move backwards, if everyone else moves forward.

We are shown Putrajaya, the Petronas Twin Towers, the bridges and highways, and the many monuments and showpieces, and we are told this is a sign that we have made it. We are not told, though, where else the RM500 billion or more has gone in the 22 years since Dr Mahathir has been running the country.

Whether Malaysia is better now than before is not based on how many new monuments we possess but should be based on the quality of life of its people. Malaysia’s poverty level is still pegged at RM510 per household. Each Malaysian household has 5.1 people according to official government statistics – we take this as three children per household. This means, this comes to about RM100 per family member per month.

It costs RM230 per month to put one child through school. This comes to RM690 for three children. It costs another RM450 per month for house rental, water, electricity, telephone, etc., even in the rural areas. It costs another RM500 per month for basic groceries and toiletries. If the family owns a car, then the cost goes up. What about clothes and other necessities?

All told, a family of five needs RM2,500 per month just to survive. And this does not include holidays, sending money home to the old folks in the village, or supporting siblings in university.

Basic salaries are between RM600 to RM800 per month for the lower paid factory workers, clerks, teachers, policemen, etc. With overtime, allowances and “side income”, etc., if both husband and wife work, they bring in a combined salary of less than RM2,000 per month.

And 75% of Malaysians are in this working class with only 25% in the executive or managerial class earning more than RM3,000 per month. This means, 75% of Malaysian workers are earning less money than it costs them to live.

We still have not reached the level where 100% of households have water, electricity or telephones. Many families still depend on a motorcycle as its means of transportation so seeing three of four people on one motorcycle is not uncommon though downright dangerous.

Yes, Malaysia has done well, as the pro-Mahathir proponent might say. But, after 22 years of Dr Mahathir’s rule and 46 years of independence, has life really improved? If the poverty level was to re-pegged to the REAL level of RM2,500 instead of the fallacy level of RM510, 75% of Malaysians would be regarded as poor.

If we were to check what it was in 1957, the year Malaysia gained independence, we might find that Malaysians have in fact become poorer rather than richer. And this means Dr Mahathir has failed rather than succeeded as many try to make us believe.

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