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Sunday, 30 November 2008

Security, Food Subsidies, and the behaviour of the Malaysian consumer.

[Salam all, in my article this time I will explain the significant correlation between three issues i.e. securities, food subsidies and the behaviour of the Malaysian consumers - how the development of security issues post-Cold War period would determined how world wide consumer behave including Malaysian consumer thus precipitating a needed change in the way the government in this context - KPDNHEP in dealing with food subsides (flour, sugar) in the future to come.]


1.     During the Cold War period, security issues were looked at merely in the context of military issues, particularly the U.S. vs U.S.S.R. context. But after the collapse of the Berlin Wall and after the whole world saw of how Communism and Socialist economy ravages the Eastern European and Russia economy, security were defined more into a detail perspective. As such came the term called as human security. According to Human Development Report, there are seven specifics elements that constitute human security which are:-


i)                economic security (freedom from poverty);

ii)               food security (access to food);

iii)              health security (protection from disease and provision of health care);

iv)              environmental security (protection from pollution and resource depletion);

v)               personal security (physical safety from torture, war, and criminal attacks);

vi)              community security (survival and cultural identity); and

vii)            Political security (freedom from oppression).

2.     Having stated the seven above elements that constitute human security, I will only touch on two issues which are economic security and food security. Economic health is an extricable part of national security. It is prerequisite to the pursuit of national security – both in internal and external dimensions. It provides the means to neutralize some of the domestic sources of conflict, makes the state less vulnerable to external pressure and penetration, and makes possible the allocation necessary resources to counter internal and external threat.


3.     This is relevant to the developing states such as Malaysia, where a deteriorating or stagnating economy and distortion in income distribution can give rise to exacerbate already existing domestic conflicts and thus threaten the very idea of the state. As such the government of Malaysia after gaining its independence has embark on numerous social projects of providing its citizen with nutritional food, optimal healthcare and economic opportunities to mend oneself from an extreme or an abject poverty.


4.     Among the introduced social projects were 1) the distribution of toilet bowls to the urban and rural peoples of Malaysia, spearheaded by the Ministry of Health aimed to inculcate hygienic habits and to deter/ prevent endemic such as cholera, TB, etc (just to name two); 2) the introduction of food subsides on certain food items such as flour and sugar as a nutritional programmes spearheaded also by the Ministry of Health in cooperation with the Ministry of Industrial and Commerce. These two programmes were launched and planned by the Economic Planning Unit under the auspices of its then Minister Tan Sri Ghazali Shafie after consulting the former Prime Minister Tun Abdul Razak and his Chief Secretary of State in 1970.

5.     To cut short, the New Economic Policy and the National Development Plan had proved to be a success in bringing up the well being of the Malaysian citizens as a whole. From having a 40% (1969) of its citizens in an abject poverty group, the percentage had decrease enormously to 1.4% in 2008. As such, the transition of abject poverty to a relative poverty among the Malaysian citizens can be seen everywhere from individual own property, narrow gap of gini coefficient, and the well being of the Malaysian consumer as a whole. As such, the definition of security were also re-defined into a more complex issues from the rights of a community to the rights of a minority group to the rights of an individual to own an assets, to procure, to compete and to questions issues that matters. One of these issues is food security.


6.     I did mentioned above of how our government had spend millions of ringgit to distribute free toilet bowls and taught the urban and rural citizens of Malaysia on how to use it properly. Before the programmes, most of the Malaysian citizens would resort in a traditional ways in answering nature calls and this had made them vulnerable to endemic diseases. After much success, such programmes has been stopped due to the increase and mounting cost (try to imagine how much toilets bowls would cost the government in the current market) and also the cost of manpower to teach every citizens to use toilet bowls properly. Such things were an alien today and we would also laugh on such idea that the government need to subsidize its people to shit properly. But that is how the situation before. Forgive me to portray such example, but that subsidizing programmes even though how nauseating to you all is the perfect example for me to relate on the issues of food subsidies that the government is spending today.


7.     The toilet bowls subsidies have stopped but the food subsidies are continuing. Even though the abject poverty of the Malaysian people has decreased enormously from 40% to 1.4%, the government out of its ignorance still continued subsidizing its people disregard of its citizens’ per capita income, gini coefficient, or its incidence of poverty. Even though the definitions of poverty have changed from abject/ extreme to a relative poverty, hundreds millions of ringgit are still spent today to cater the food subsidies.


8.     Figures of Real per capita GNP that is considered an important indicator of the standard of living, since income provides the basis that allows people to sustain themselves and their families, while the distribution of income reflects equity and balanced development were not a point of reference for the government in its subsidizing programmes. The real per capita GNP doubled from RM3,120 (RM3,734 in nominal terms) in 1980 to RM6,130 (RM12,051 in nominal terms) in 1997 as a result of the high economic growth. It showed clearly that most of the Malaysian can fend for themselves and do not rely anymore on the government subsidies except that 1.4% of its abject poverty groups. But the amount of government subsidies that were planned still figured for the rest of its 26 million citizens.


9.     We know that with the effect of the globalize world, the market economics have become the norms in virtually every country in the world, including Malaysian which educating its consumers to ask for a better and perfect products. For a market to keep producing perfect products for the consumer, a cost is needed for products innovations and safety test. As such the government will end up bankrupt to keep subsidizing its growing citizens with its growing demands and its growing standards for its consumed food. Even though, millions and millions of Malaysian new consumers and producers were able to buy or sell their goods and services – as an individual or companies – and were able to collaborate with more people in more places on more things with greater ease for less money than ever before, the Malaysian government still subsidizing its people with food that their own people can procure.


10.    Amid the path that the Malaysian consumer is walking with their own version of economic well being – a car, a house, and air conditioner, a cell phone, a microwave, a toaster, a computer, and an i-Pod – the Malaysian government still subsidized its people with food on the table. With the increase of the consumer demand standards asking for better and quality food, try to imagined how much the government had to subsidized its people with the right flour and flour only – not to include sugar, rice or health care/ free hospitals. As such this government would go bankrupt in 2020. So much of the great vision of self-sustaining economy.


11.    Based on the points I stated above, I asked for a review in the government food subsidies that should fend off only for those 1.4% of abject poverty group and not the whole 26 million peoples of Malaysia. The right way to deal with the food subsidies is to float the price of these items based on the current markets and the introduction of food stamps for the 1.4% abject poverty group and this food stamps should be obtain only at the Jabatan Kebajikan Masyarakat. Currently, Jabatan Kebajikan Masyarakat is handling an abject poverty group with its social safety nets such as a personal allowances for those that is living below poverty line (RM 700 a month or USD 1.00 a day). This is the right group that should be getting the food subsidies. As such, the government can decrease the amount of its un-needed spending for the rich, and the rich/ “haves” fend for themselves. At least, the “haves” consumers would feel ashamed of themselves whenever thinking that they are getting free food on their tables’ everyday with the Jabatan Kebajikan Masyarakat food stamps printed on their food receipts.


To be continue…. 

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