Friday, June 06, 2008

Stop selling subsidised Petrol and Diesel to Foreigners.

When leaders are under siege and the political scenario they operate are in a state of turmoil, there is a tendency for them to make the wrong decision.The decision to increase the price of petrol and diesel signifies such a case.
The flawed decision of granting the subsidy scheme for petrol and diesel in the beginning was a bad decision. The decision to increase the price now was made too late and long overdue.Basic economic principles dictate that market forces should be allowed to determine supply and demand.and hence price will prevail at the point where demand equals supply.Any attempt to manipulate price by means of subsidy will create an artificial demand and supply situation.
Subsidy will inevitably create a black market situation and encourage smuggling of the goods for pecunary gains.In this case subsidy depresses the price of the goods vis-a-vis the market price and unscrupulous people will capitalise the situation by selling the subsidised goods to neighbouring countries where it is sold at market price.
Such a scenario is displayed along the coastal boundaries of kelantan, Kedah, Selangor and Malacca where fishermen under their legitimate guise of fishing, transfer their load of subsidised diesel to waiting foreign vessels for a quick monetary profit.Two thousand litres of diesel at a paltry profit of 50cts per litre is sufficient to net $1000 for a day's work.No wonder empty vessels returning home without any fruitful catch is a common occurrence.
Common sense dictate that if the fishermen need subsidy to continue with their profession then its about time they should abandon fishing and seek new pasture in other ventures that are more lucrative.If Thailand and Indonesian fishermen can fish and sustain their venture profitably without any subsidy then why cant our fishermen do the same?Giving them subsidy for them to continue in a not profitable venture is not a viable option in the long run.It would be better for the govt to encourage them to venture into something else without the dependency of a subsidy.

In the case for increasing the price of petrol and diesel, the govt at first made the right decision to ban the sale to foreign vehicles on a 50km radius of the border towns.This option was sensible and most practical since it immediately cease to subsidise the sale of petrol and diesel to foreigners who were capitalising from the difference in the pump price of the neighbouring country.In Thailand the pump price of petrol is $4.00 per litre and at the border town of Rantau Panjang the pump price is $2.70 per litre.With the unending daily queue of foreign cars lining up to fill their cars a modest estimate of one million litres of subsidised diesel sold could translate to $1.3 million loss of daily revenue.In a year the govt will be subsidising an astronomical amount of $468 million and that is just on the border town of one place. How much is lost in total from all other border towns is any body guess.
The question that begs to be answered is why are we selling subsidised petrol and diesel to foreigners?The fact that subsidised petrol and diesel are not reaching the targeted group should be good reason enough to stop the sale of petrol and diesel to foreigners at border towns.Why the flip flop decision to lift the ban of sale to foreigners?
The lack of a proper policy to address this serious leakage of our country's finance is a mismanagement of our country's resources.Previously when the pump price was subsidised at $1.92 per litre our country must have lost billions.Can the policy makers please tell us why we are not addressing this serious financial leakage?


Thursday, June 05, 2008

45% of PSD scholarship go to non-bumis.

I wish to refer to your article dated 29th may regarding the disbursement of PSD scholarships to Bumis and non-bumis.
The public service department pointed out that "there is a fairer distribution of Public service department scholarships for all races for degree studies abroad from this year,with 1100 going to bumiputras and 900 to non-bumiputras". In spite of this the PSD received 3000 appeals from post SPM students who failed to get scholarships for studies abroad.
Perhaps what the public would like to know is on what basis are the students being selected?The 45% for non-bumis and 55% for bumis seem to imply that selection is solely based on a racial quota and not based on meritocracy.
If the selection is based on merits then it is incumbent upon PSD to be transparent and reveal the methodology in which the students for the bumis are selected.The scholastic achievements of all the successful 1100 bumi and 900 non-bumi students should be published in order to dispel any doubts that the bumis are selected based on race rather than on merit.
But the statement by PSD Director-General Tan Sri Ismail Adam that those rejected (3000 students) received low marks for interview and below active curricular records raised more suspicions than adequate justification.His statement seems to imply that the 1100 bumis who were successful received high marks for interview and also high curricular records and on top of that all had 9As and above in order to qualify for the benchmark.
It is rather hard to believe that all the 3000 rejected students had low marks for interviews and low marks for curricular activities whereas the successful 1100 bumis students all had high marks for interview and curricular activities.
Perhaps the PSD should be honest and let the public know whether the selection criteria is solely based on racial quotas for the bumis and for the non bumis the selection is based on merit.

If it is true that the selection by the PSD for the bumis are based on a racial quotas then it certainly explain why many of the unemployed graduates are bumis..It should be apparent by now that simply churning out unemployable below par graduates is not the answer to our human resources problem