Buku Jingga

Alhamdulillah, Pakatan Rakyat berjaya menerbitkan sebuah buku poket yang berbentuk muqaddimah kepada bentuk kerajaan persekutuan yang akan dibentuk sekiranya diberi mandat oleh rakyat.

Buku poket yang diberi nama Buku Jingga ini adalah “sneak preview” kepada dasar-dasar khusus Pakatan Rakyat. Harapan kita penerbitan buku ini akan menutup suara-suara sumbang yang kononnya Pakatan Rakyat tidak mempunyai langkah yang khusus untuk mentadbir negara.

Kandungan Buku Jingga jelas menggugat Barisan Nasional, sehingga Timbalan Perdana Menteri tidak keruan dengan kenyataan-kenyataan yang menghina guru-guru dan Perdana Menteri berjanji akan membidas satu-persatu program reformasi 100 hari yang terkandung di dalam Buku Jingga.

Saya menyeru rakan-rakan di dalam Pakatan Rakyat untuk terus menulis dan menyebarkan kandungan Buku Jingga sementara cetakan besar-besaran dibuat untuk dibawa ke akar umbi.

Saya juga bersedia untuk menghuraikan pertimbangan dan kiraan yang dibuat yang digunapakai Pakatan Rakyat dalam memutuskan program 100 hari itu.

Selamat menyebarkannya ke seluruh negara!

Download versi Bahasa Melayu: Buku Jingga

Download versi Bahasa Inggeris: Buku Jingga – English – Abridged

Subsidy Rationalisation: A Question of Priority and Affordability?

The recent announcement by Dato’ Seri Idris Jala of a new “price adjustment” for petrol, diesel, LPG and sugar was expectedly met with mixed reactions – depending whom you speak to. Although the public relations branding of the subsidy rationalisation exercise seems to be working (judging from the public response so far), the announcement broke a few promises made earlier by the administration.

At the beginning of the year, PEMANDU came very strongly with its commitment to reform the energy sector, in particular the massive RM19 billion subsidy borne by PETRONAS each year to keep the natural gas price to TNB and independent power plants artificially low. There was an understanding that PEMANDU would put a high priority for the rationalisation of this subsidy while it pushes for gradual removal of fuel subsidies.

Dato’ Seri Ismail Sabri Yaakob (Domestic Trade, Cooperative and Consumerism Minister) also famously said that there would not be any new price hike on fuel and essential goods after the first series of price hikes in July 2010.

Both commitments were broken, hence the mixed reactions.

I took a particular interest in the question of subsidy rationalisation since 2007 given my professional background in the oil and gas industry. Continuous dependent on artificially low prices of energy is a bad thing for the economy, especially when our oil resources are depleting and the subsidy is extended to everyone. It distorts the real cost (and therefore the value) of fuels and worse, it promotes wasteful consumption habits.

But the issue should also be viewed from a wider perspective. There is also the moral issue of extending state assistance to the group most burdened with escalating cost of living, more so when the bulk of the nation’s income is derived from its hydrocarbon riches. If governing is about ensuring social and economic justice in a society, then we cannot divorce the philosophical issue of a just distribution of the nation’s wealth to the needy, notwithstanding the urgent need to reduce budgetary deficits.

It is in this respect that I defer from the conventional views that subsidy must be removed at all cost. Fuel subsidy is a luxury to those who can afford a certain lifestyle, but a necessity to the households whose disposable income is too small for them to make any spending adjustment.

40% of our households (roughly amounting to about 8 million people) earn on average RM1,500 per month. The bulk of this wage will go to pay for basic household expenditures such as housing (rent, mortgage), food, school expenses, energy (electricity, fuel) and clothing. It is estimated that 80% of household income for such families will go to these expenses, leaving little room for them to manouvre each time the government announces new price hikes on essential goods.

To these families, a 5 sen hike in fuel, a 20 sen hike in sugar and LPG will make a big difference to them as their disposable income will be affected immediately. For them, there is a moral justification that some form of assistance needs to be extended to lessen their burden.

Therefore, I always suggest that we should discuss the issue of subsidy rationalisation from the primary question of affordability. Can the nation afford allocating a sum each year to provide subsidies on essential goods meant for the lower income groups most affected by any price hikes? How much does it cost to do this? How much does the cost for this compare to the total income generated from our hydrocarbon resources?

Previously, it was quite difficult to put the numbers together due to the unavailability of information especially the amount of subsidy for each litre of fuel borne by the government. The credit must be given to PEMANDU which had had no qualm to share with the public that the government bears a subsidy of 40 sen per litre of petrol when crude oil price is in between the USD70 to USD80 per barrel range. This allows for an economic model to be built, assuming that refining cost and refinery margin do not change much over a fixed period of time.

Based on the latest public data provided by the International Energy Agency (IEA), 61% of oil products (from crude and refineries) in Malaysia were consumed for transportation purposes in 2008. Industry usage makes up the second highest consumption at 23%.

For transportation, a total consumption of fuel (by private and industry users) translates to an equivalent of 9.8 billion litre of petrol and 5.3 billion litre of diesel annually (both figures are estimates, taking into account different conversion and estimation methods used). This adds up to an estimated amount of RM7.5 billion of total subsidy for transport fuel borne by government each year.

Going back to the question of necessity and afforability, out of the 15 billion litres of fuels (petrol and diesel) consumed for transportation purposes each year, a significant portion of this is consumed by the private sector and the industry. Since an official figure is not available yet, even a hypothetical estimate of 50% split between individual and private/industry consumption will alter the picture quite radically. I dare say that only RM3.8 billion to RM4.5 billion of the fuel subsidy actually goes to individual citizens for their private use. This does not discount the fact that a great many in our society will not qualify for fuel subsidy, if fuel subsidy is extended only to the needy groups.

So in the end, it boils down to the most basic question which I have repeated in the past: can we afford a fuel subsidy of RM3 billion a year (assuming crude oil price in the region of USD70 to USD80 per barrel), if we were to gradually remove the fuel subsidy for the industry and private sectors (having been convinced that it will have a minimal impact on the inflation)?

Once we stack this magical number against all the other figures, I will leave the conclusion to the readers. RM3 billion against RM19 billion in gas subsidy to the power sector (while some of the IPPs continue to reap huge profits) is a small sum. RM3 billion extended to the most hard-pressed section of our society against an estimated RM4 billion in compensation to toll concessionaires should provide a different perspective in the debate on subsidy removal.

One may argue that the RM3 billion subsidy cost will balloon up as the crude oil price soars in the future. But Malaysia is still an oil producing country with the current production of 650,000 barrels of crude oil each day. An increase in crude oil price will also increase the income to the government. This comes in a few forms such as the oil royalty, supplemental payments (depending on the production sharing contacts/PSCs signed), duties, petroleum income tax, corporation tax and dividends from PETRONAS.

A rough calculation (taking into account the structure of PSCs in existence, reimbursement of cost oil and availability of profit oil as dividends) of income stream to the federal treasury from PETRONAS and domestic oil and gas industry shows that for each USD5 per barrel increase in crude price (on annual average), the government will earn an estimated RM4 billion in extra taxes, royalties, duties and dividends annually.

Thus, not only that the annual income from the nation’s hydrocarbon resources (drawn at an average of RM81 billion each year from PETRONAS for the last 5 years) is adequate to pay for the RM3 billion fuel subsidy targeted at the needy groups, any crude oil price hike should yield additional income that can cover the increase in subsidy cost.

The rest is a question of political will.

Will the Prime Minister continue to push for subsidy removal that affects the masses while being non-committal with the massive RM19 billion gas subsidy given to the IPPs?

Will the Prime Minister continue to tolerate PEMANDU’s failure to come up with a practical mechanism to streamline fuel subsidy to the needy groups, as this should have been the prerequisite before any decision to remove fuel subsidy was made?

The public will expect the government to set its priorities right in managing the gradual removal of the subsidies, so that we do not penalise the groups still dependent on subsidies on essential goods to help make ends meet.

A Malay proverb aptly describes this balancing act as “bagaikan menarik rambut dari tepung, rambut yang ditarik tidak putus, gandum tidak rosak”.

This article was published in my column in The Edge (the published version could have been edited slightly)

Membina Gerakan Politik Akar Umbi

Minggu ini minggu di cabang dan Terengganu.

Gerakan politik di peringkat akar umbi, walaupun agak straight-forward tetapi banyak memakan masa dan selalunya menelan belanja.

Ada beberapa objektif utama dalam mengekalkan gerakan akar umbi.

Pertama, untuk membina jentera agar gerak kerja di bawah dapat dijalankan dengan lancar. Bentuk-bentuk kerja yang memerlukan jentera (dari perspektif Pakatan Rakyat) adalah menampal poster, menyusun kerusi, memasang pentas ceramah, mengutip sumbangan selepas ceramah, menjadi pemandu semasa program dan lain-lain. Memang tidak glamour dan nampak berat, tetapi sepatutnya semua yang ingin berkecimpung dalam politik perlu melalui fasa ini.

Saya mula-mula balik ke Kemaman dari luar negara dalam tahun 2003 dengan melakukan kerja-kerja ini. Walaupun sudah menjadi EXCO Pemuda pada masa itu, tetapi setiap kali ceramah, muka-muka yang sama jugalah bersengkang mata sampai ke subuh menampal poster.

Objektif kedua adalah untuk memastikan maklumat sampai. Ada dua cara utama menyampaikan maklumat di peringkat akar umbi, apabila kita tidak dibenarkan mempunyai saluran yang sah dan adil seperti Umno/BN. Pertama melalui ceramah-ceramah, walaupun saya merasakan ia kurang berkesan kerana yang datang adalah penyokong tegar Pakatan Rakyat. Yang kedua adalah melalui ceramah kelompok dan sembang-sembang dengan “key opinion leaders” dalam masyarakat setempat. Mereka ini termasuklah orang lama di pasar ikan, ketua kepada kumpulan nelayan dan lain-lain. Yang ini lebih berkesan tetapi lebih meletihkan kerana hanya boleh dilakukan pada skala kecil dan berulang-ulang kali.

Objektif ketiga adalah untuk menunjukkan kehadiran sesebuah parti di kawasan setempat. Ada banyak cara untuk melakukan ini (contohnya bangunan pejabat, bunting dan poster, pertandingan, sumbangan kewangan dan lain-lain) tetapi dalam keadaan kekurangan, cara yang terbaik adalah dengan menganjurkan ceramah. Tetapi program ceramah pun memerlukan sumber kewangan yang besar jika penceramahnya adalah tokoh besar – kerana kita perlu menyediakan wang saku, penginapan dan lain-lain.

Semua ini tidak termasuk tugas-tugas biasa seperti mengedarkan risalah, menjual organ rasmi parti dan lain-lain.

Makanya, suka atau tidak, senang atau sukar proses ini perlu berlaku. Saya sendiri kadang-kadang ada rasa kecewa ada rasa bangga. Kecewa apabila kita sukar menembusi sesuatu kawasan, sukar untuk mencari sebuah rumah yang sudi menjadi tuan rumah program penerangan berkelompok kita. Bangga kerana anak buah dalam keadaan serba kekurangan dan sukarela tetap menunjukkan kesungguhan untuk menghidupkan parti.

Hujung minggu ini adalah hujung minggu akar umbi.

Ada 3 ceramah kelompok disusun dan kehadiran di beberapa kenduri/majlis awam. Mesyuarat cabang pun kita jalankan membincangkan program-porgram yang akan datang.

Perkara paling baik bila kita turun bersama-sama dengan anak buah di akar umbi adalah kita boleh kenalpasti yang mana berkebolehan, yang mana ada masalah komitmen.

Dalam keadaan serba kekurangan, saya diingatkan kepada zaman-zaman lalu bila mana orang takut untuk menyebut ADIL. Saya masih ingat semasa saya ingin menubuhkan Keadilan Antarabangsa Eropah di UK dahulu, puas kita berjumpa dari seorang ke seorang untuk memujuk mereka menyertai, kerana kita faham pegangan politik mereka. Tetapi penyokong kuat kita pun kadang-kadang gementar untuk tampil ke hadapan.

Akhirnya, hanya 2-3 orang yang berani ke depan.

Tetapi tugas kita Allah dah tetapkan untuk menyumbang dalam keadaan tertentu. Pada masa itu, tugas insan-insan kerdil adalah untuk bertahan sementara parti berkembang bila Dato’ Seri Anwar Ibrahim dibebaskan.

Seperti juga sekarang, tugas kita adalah membina parti sementara Pakatan Rakyat semakin mendapat tempat di mata rakyat. Sedih atau kecewa, senang atau susah adalah perkara biasa.

Tidak ada yang glamour atau senang apabila fokus kita adalah membina kekuatan akar umbi. Tetapi kekuatan sesebuah organisasi politik adalah akar umbi, jadi sebaiknya kita jangan lari dari amanah itu.

Konvensyen Pakatan Rakyat Kedua

Konvensyen Pakatan Rakyat berjalan dengan baik dan berakhir dengan sempurna.

Apa yang paling menarik mengenai konvensyen kali ini ialah tumpuan kepada menterjemahkan Dasar Bersama kepada beberapa langkah khusus yang menggambarkan kerajaan persekutuan di bawah Pakatan Rakyat. Selama ini, Pakatan Rakyat dituduh (selalunya oleh media perdana dan pencacai mereka) kononnya tidak mempunyai kerangka cadangan dasar dan program yang jelas untuk rakyat.

Saya sebenarnya kurang bersetuju dengan pandangan itu kerana ia tidak adil kepada Pakatan Rakyat.

Sekiranya kita meneliti Dasar Bersama yang mengikat parti-parti Pakatan Rakyat, pendirian, pendekatan dan program yang dicadangkan dan dimeterai bersama adalah cukup komprehensif. Sesiapa yang menghadam dokumen itu akan benar-benar faham arah tujuan negara Malaysia di bawah Pakatan Rakyat.

Kelemahan di peringkat Pakatan Rakyat adalah masalah mesej yang tidak sampai kepada rakyat – sama ada kerana tidak cukup “follow through” atau kekangan kewangan apabila dokumen itu tidak dicetak besar-besaran untuk difahami rakyat.

Sebab itu, kesilapan yang sama tidak boleh diulangi kali ini.

Buku Jingga iaitu buku poket yang mengandungi rancangan-rancangan konkrit Pakatan Rakyat sebagai kerajaan perlu dicetak secara besar-besaran dan diedarkan ke seluruh negara.

Hujah yang dihurai di dalam Buku Jingga yang menjelaskan fakta-fakta kenapa Malaysia sedang dilanda krisis dan perlu diubah sekarang, perlu juga dijelaskan di dalam ceramah secara bersepadu di seluruh Malaysia.

Memang tugasnya besar, belanjanya besar.

Tetapi jika program-program kita sampai ke pengetahuan rakyat, mudah untuk kita meyakinkan mereka. Tema Buku Jingga yang menumpukan kepada bebanan kehidupan rakyat dan jalan penyelesaian yang kita tawarkan, sukar untuk dijawab oleh lawan.

Majoriti rakyat akan mengundi kepada perkara-perkara berikut:

1) Penghapusan tol

2) Kenaikan gaji RM500 kepada guru-guru

3) Ambil alih semula perkhidmatan air yang diswastakan agar tarif air rendah dan program air percuma seperti yang dilaksanakan di Selangor diluaskan ke seluruh Malaysia

4) Hentikan subsidi korporat terutama jumlah RM19 bilion yang diberi kepada biawak hidup ekonomi Malaysia (iaitu syarikat-syarikat IPP seperti YTL, Genting, Malakoff) dan mengalihkannya kepada subsidi rakyat

5) Internet wi fi percuma kepada semua rakyat di semua kawasan bandar dan separa bandar

6) Mengembalikan peranan Felda sebagai pembuka tanah rancangan untuk rakyat, dengan mengubah fungsi Felda Plantations dari syarikat ladang ala swasta dan mengembalikan ladang-ladangnya kepada generasi kedua dan ketiga Felda

Tawaran-tawaran ini sukar dicabar oleh lawan.

Cabaran kita sekarang adalah memastikan mesej ini sampai secara konsisten kepada rakyat.

Step-Changing The Economy: Education, Education, Education?

This is the final article in a 3-part series published in The Edge on addressing the key constraints of our economy

It is a common observation by most that Malaysia suffers from three acute constraints in step-changing the economy towards a high-income nation.

The first constraint is the relatively lower level of capitals available for enterprises to expand, indicated by a stagnated level of private investments for the last decade and compounded by a severe drop in foreign direct investments. Secondly, the nation has not made a big leap in transforming from a technology user to a technology creator.

My views on these two constraints have been shared in the last two articles.

Fortunately (or unfortunately, depending on which perspective we take later), both constraints have its root in the one issue that arguably has had the biggest influence on the direction of our country and its economy – our education system. The make-up of our society is predominantly influenced by the education system. By extension, the ability of our workforce to drive the big step-change into a high income economy will depend on what kind of educational upbringing they have had so far; to prepare them for the demands of a high income economy on its workforce.

What are these demands? These are well-known and have been articulated well in various economic planning documents for Malaysia released in the last one decade (to the credits of the civil servants who prepared them). A workforce that is productive and creative can subsequently innovate. Innovation (new products, new service, new thinking) drives the economy to a much higher income level.

That is easy enough to establish. What has proven to be the most difficult for our country is to make the upgrade from a workforce designed and trained to man manufacturing facilities (and paid relatively cheaply at that!) to the one which design the manufacturing facilities. Making that journey has proven to be the biggest bottleneck for the last thirty years.

So where should the journey begin?
Fortunately, most of the bottlenecks in the efforts to make this upgrade can be traced back to the education system. An education system that is rigid and too obsessed with structured model of success carries an inherent risk of stifling creativity and innovation. An education system with only one model of answers that restricts the exploration of reasons and ideas beyond the ones approved by the authority can also kill off the creativity altogether. So, if we fix the education system we can say we have progressed well in the journey.

Unfortunately, fixing an education system that has evolved over a century and as diverse as ours, will prove to be a difficult task. What more when the framework of our education system is very much intertwined with the socio-economic and political structure of the country – undoing the make-up, approach and design of the education system is by itself a near revolution because it is akin to undoing the socio-economic and political power structure that has dominated this country for so long.

So I will not attempt to comment on the humungous task of redrawing the education system as this short article will not do justice to the gravity of the task. It is a philosophical question and challenge which will continue to haunt and define our society for many years to come.

However, there are a few radical thoughts on education system that may have a profound impact on the development of our workforce; that can be implemented without the redesigning of the education system framework of the country. I will attempt to explain three such thoughts here.

First thought concerns the school environment that is imprinted in the minds of our future workforce during their formative school years. In general, our school has not been able to become a place where a student’s potential is realised. Interestingly enough, I feel it has failed to do so not because it lacks resources (as often is simplistically argued, each time we discuss the failings of our education system); but because we only cultivate one model of success. In the process, we fail to inspire our younglings and eventually they choose to conform to expectation, even if it does not bring the best out of them.

I came across a case of one Malay student at a top boarding school, who did not do too well comparatively in his SPM. He never liked science stream but had to do science because the whole school was supposed to do science subjects. Not surprisingly, he struggled along the way and his result was not good enough for a scholarship post his SPM. Naturally the system expected him to go to a matriculation as a step to enter into a local university; but he had a different plan in mind.

He chose to do STPM instead and had had a difficult time explaining to the school, teachers and relatives why he chose that route, as many people will only consider STPM as a last resort. Luckily, he scored well in his STPM after he switched to economics; offered a JPA scholarship and now reads economics at one of Australia’s top universities.

It may be a remote case that does not repeat too often; but it exemplified the mentality of conformance that restricts ideas and reduces the boldness of our future workforce to experiment. This conforming, “one model of success” school environment is detrimental to our economy because we need to cultivate a sense of inquisitiveness and risk from the very beginning. Otherwise, our future workforce will continue to fall back to what is being given to them – they won’t be creative because it is outside conformance, let alone being innovative because that can be too upsetting. In the end – from the offices of civil servants to our factory shop-floor, we are a nation of “yang menurut perintah” and “this is how it has been done forever”.

In this respect, I welcome the plan to put more emphasis on school-based assessments and move away from the rigidity of national exams at all levels. However, this is only a tool and will compound the situation (if school heads begin to cut corners to produce better school-based assessments linked to their promotion) unless there is a radical change in our school environment so that we encourage differences, exploration of ideas and some risk taking among our school children. Hopefully they will retain these traits as they grow up – they can do wonders with these traits at work!

The other thought that has tickled me over some time concerns the policy to send top scorers after SPM/STPM overseas for a degree. This must have consumed billions of ringgit in national budget each year; so considerable financial resources that could have gone into our local higher institute of learning ended up as a significant foreign exchange earner for other countries. If the equivalent financial resources are diverted to the local institutions, there can be a significant improvement especially in terms of facilities.

But even the impact of few billions gone is minute compared to the impact of not having the top 3,000 brains each year going into our universities. This is where (I think) there is a taboo when discussing the performance of our local institutions and someone should be bold enough to call a spade a spade, even at the risk of hurting the sentiments.

The fact of the matter is this country has annually sent thousands of its top students overseas, thus depriving the local institutions the necessary infusion of good students as a catalyst for competition and standards among the peers. This is a policy that dates back to pre-Merdeka days and is considered sacred for (strangely) both Bumiputras and non-Bumiputras. Thus, it is not easy to argue against the continuance of the policy.

Yet, the impact of this deprivation comes in many folds.

The local institutions have to grapple with various questions on standards and competitions, as they have to work within a certain sets of constraints to meet their deliverables. The top students going overseas may not necessarily fulfil their potential and achieve the maximum benefit from their overseas stint, because many chose to stick in small circle of Malaysians. This argument can be strengthened further by the fact that the number of Malaysian scholarship recipients admitted into the world top universities is still relatively small.

Even worse, those who did benefit greatly from the overseas experience will realise that the world is their oyster. Many choose not to return and I dare say it is one of the contributors to the brain drain we are facing. By the time they have settled down overseas with good home and good pay, it is very difficult to lure them back (unless you can match the pay, but then how many companies or organisations can do that).
We should question whether there is a case to continue sending top students for a degree overseas since we have the means to cater for their placement at local institutions, unlike the yesteryears when we just do not have enough places locally. Should we not restructure our national scholarship system so that only post-graduate students are sponsored to go to top universities and research centres world-wide – after all this will have a more profound impact on our economy, than producing overseas first degree holders?

Thirdly, if we were to redirect our top students leaving the school system each to local institutions, the latter has to drastically improve its standing to do justice to these students. The ways and changes required to effect this have been discussed greatly elsewhere (and I am running out of space for the column!) so I will not discuss it here.

I won’t fault you if you feel cheated that we end up talking about schools and universities instead of economics and numbers. My belief is we can forget about the high income economy unless we go back to the basics and address the major stumbling block towards that journey.

Cliché as it may sound, the remedy to the economic malaise we are facing may not be economics at all – we can benefit greatly by going back to the New Labour’s cliché of “Education, Education, Education” in 1997 that put them in power for the longest time and presided over the longest boom. We should learn a thing or two from that.

Ahli Parlimen Pandan dan Naib Presiden/Setiausaha Agung Parti Keadilan Rakyat || Member of Parliament for Pandan, Vice President/Secretary General of Justice Party