The Fuel of Discontent

I find it continually curious how Malaysian and American politics relate. The price of fuel in Malaysia goes up by some 30 percent, and the main differences are that we call it petrol and they call it gas.... Also, we for some reason never take polls on federal approval ratings - and yet have 100-day report cards on the new opposition-led state governments.

Americans have a more... shall we say standardized way of looking at price increases. The Republicans are known to be for tax cuts (more so for the rich, which they argue keeps money out of foreign bank accounts) and Democrats are said to be more for federalism, "big government", using increased taxes for federal projects. Malaysians don't really have that sort of distinction, but if they were asked, they'd probably opt for lower prices all round.

This is not because of a more conservative bent, though on the social front that tends to be the case. The argument that a decrease of subsidies underlines the fact that the government is still helping (rather than a cancellation of subsidies or a tax on the same substance) never seems to hold much water - or in this case, gasoline - because the people's perspective is never linguistically based. You can call it what you want, but the point is that the government of yesterday protected us more than the government of today.

A related myth is that we shouldn't forget the help that the government continues to provide - subsidies on flour and rice seem to be favourite targets. Sorry, but there are two flaws in this plan - first of all when the government helps the people it's not extra credit, it's what they were hired to do, and to do well. The second is where you think the money for subsidies comes from - the pockets of individual members of Parliament? It comes from our own pockets, our taxes, our natural resources. We don't elect people to give us their own money, we elect people to manage our money. Let's not forgot that we are actually an oil-producing country.

The idea of big or small government on which Americans tend to place some limelight is not as boxed and labeled in Malaysia. But the bottom line is the same - it doesn't matter whether it's big or small, it matters instead whether it's effective or not. The primary principle is no different than putting money in a fixed deposit or in any investment portfolio. Yes, there's an element of security. But the main idea is that the interest rate is higher than it would be if I used it myself. Otherwise I'd change banks. Or keep in it in my own pocket.

The government can place the price of fuel at whatever price it feels fit - even add a tax as the Americans do. Whether people will be happy is entirely dependent on whether you spend that investment in a way that is more effective in terms of economies of scale than it would be in the hands of individuals. If somehow the government managed to use the additional funds in a way that the overall effect of costs and conditions of living outweigh the burden of fuel price increases, the people will accept, the people will believe. If prices go up and there doesn't seem to be anything on the other side of the scale, people these days tend to notice. When we disagree with a 30 percent increase, it's not that we disagree with big government - we disagree with an inefficient one.

That's why I think the Malaysian equivalent of a simultaneous stimulus package makes absolutely no sense. No sense whatsoever. We are given either a rebate or a decrease in road tax depending on the vehicle you drive. But both of these don't begin to offset the fuel price increases - which means that the original amount of fuel increase was probably around 25 percent, and 5 more was tagged onto it so you could have a rebate or a decrease in road tax. It's just like stores increasing prices and then giving you a lesser discount - you end up paying more, and the store gets to put the item "for sale".

The ripple effects have already appeared with prices of everything - transportation and food being topmost - increasing. If anything it is shocking that the penchant for hot air is not limited to politicians but is shown with adept skill by the commercial sector. Quoting the new price of lorry transportation charges at 14 sen a kilometer, the focus of Johor Lorry Operators Association Leow Hock Tiap is that the Road Transport Act has a maximum of 15 sen. It's called diversion - away from the fact that the increase of charges between 40 to 60 percent is far above the increase in fuel charges. Even if the increase was equivalent to the increase in diesel rates it would still be a scam, because the price of fuel is not the only contributor to transportation costs. What it is is taking advantage during a vulnerable situation, hoping that the focus of discontent at the government will obscure their own shenanigans.

The people who take public transport are screwed the most. The government increases fuel prices by 30 percent. Buses will probably increase prices by at least 30 percent - though technically the amount should be less. And finally, since they take public transport, they don't get a rebate, unless they own a car which they choose not to use in order to take the bus. Which may be the way we are all headed.

Plus, what do you wanna bet (as Malaysians tend to say), that the price of your lunch will go up in a similar fashion? If it goes up 30 percent, the only way to justify such an increase is if you're literally drinking oil. This for me is the greatest tragedy of the entire affair: while the government's inability to continue to preserve a quality of life causes them to take dollars from your right pocket, instead of standing by in solidarity as a fellow citizen, your neighborhood food seller uses the hoo-ha to take cents from your left.