Summertime, and the living is easy....
Malaysia is a lucky country as it has bountiful natural resources from rubber, palm oil, oil & gas, timber, etc... Maybe its the fact that things are so easy, that we have been lazy and have not been efficient and effective in using our natural resources. I tend to liken Malaysia to Australia - back in the 60s-70s, Australia was a very resource rich country (and still is). When a country can just dig up stuff and sell for tons of money, its easy. Surprisingly, Australia has managed to transform itself from a resource reliant country to one which has a pretty good work ethic, all in a matter of 10-15 years. Now, you find companies such as Macquarie Bank, Toll Corp, BHP ... going at it with international players, and winning.
The funny thing is, maybe not so funny, countries that lack natural resources have to dig deep to perform in the business world. Places such as Japan, Hong Kong, Singapore and even Taiwan are good examples. When Country A produces oil for next to nothing, and Country B produces lots of cow/beef at a very low cost, it will be very hard for say Singapore to jump in and participate in the business transaction. Hence a resource lacking country would have to add value to business transactions in order to partake in the economic world or else Singapore would not get a slice of the action. Examples the resource lacking country could do: buy the beef from Country B, add-value to it, either pre-cook it a certain way; or cure it then can it; or buy in bulk from many producers so that you have a solid inventory management and distribution system to other countries; or devise ways to lend money to Country A and B to expand; or help develop accounting systems for both countries... you get the drift. When you have nothing, you have to work real hard in order for people to play with you and give you some money.
Not just the people, the governments also become lazy. Sometimes I wish we had less natural resources in Malaysia, so that the country can wake up faster. Whe things are plentiful and easy to get, it is easy to get complacent and wastage happens frequently. There is also a lack of urgency to implement technology or do value-added stuff as profits are there and nobody is getting fired. Summertime, and the living is easy... and senior management will not be so vigilant in their controls and oversight also.
The fuel oil situation is a prime example. We get so used to a fuel oil subsidy for so long, we think we are eternally entitled to it. If we tell neighbouring countries we used to pay just RM1.50 (US$0.43) per liter and now we have to pay RM1.94 (US$0.52) per liter of fuel, they'd be envious. Ask the average Malaysian or even politician in the country if they know how much oil reserve life we have left in Malaysia.... probably 9 out of 10 cannot even guess to the nearest 5 years. We only have crude and oil condensate reserves of 4.8 billion barrels , which is about a reserve life of 20 years. Of course, we could make more discoveries in the future, but that is uncertain. In fact, Malaysia could turn to be net importer of fuel oil by 2015. As for gas, we are much better here as we have a reserve life of 33 years - and judging from our geography, we are more likely to discover bigger and more extensive gas wells in the future.
Petronas, to be fair to them, is easily the best run GLC, and is probably the top ten Asian companies in terms of management ability, strategy and execution ability. Knowing the limited reserves within our shores, the company has ventured well and beyond to capture more reserves. By utilising the profits, Petronas now has almost 60 energy ventures in 26 countries. Petronas has ventured into difficult areas such as Sudan, Egypt, Chad, Niger, Turkmenistan... to look for oilfields and LNG work.
We cannot undo the good work Petronas has done for the country... PLEASE, no more getting Petronas to build the Formula 1 strip and then fund a F1 team, or the world's tallest building (although the KLCC is pretty good and make economic sense actually), or to build Putrajaya, etc... Many of us heave a big sigh of relief that Badawi has no mega-project which uses funds from Petronas - that in itself is a fact we need to applaud!
Malaysia as a country has so much potential, we have the abundance of natural resources. We have among the better brains, just go to any major universities in the world and see how Malaysians (or Asians in general) perform. We speak English and in many cases Mandarin/Tamil, enabling us to be effective in two of the more important economies in the world for now and the next 10-20 years at least. Where we are now is okay, but we could so very easily jump up the economic and development ladder.
Yes, the removal of subsidies will hurt, but everyone needs to do away with that eventually for Malaysia to compete well and fairly. Even the subsidised natural gas to independent power producers have to go. These subsidies cannot go all at once. A masterplan has to be drawn up with a proper timeline. If subsidy for fuel and natural gas is reduced by 10% every year from 2008 onwards till zero - I think companies and the public can adjust accordingly. The additional revenue to the government budget will be needed to improve salaries and amenities, boost value-added services, lower taxes, etc... Its about time we extract the maximum benefits from our natural resources. Meritocracy has to come into play in more areas of the economy. Do not have sections of the economy to be always on crutches. I don't want to see in the next 5 years, Malaysians having to use 3 ringgit to get 1 Sing dollar. .... how to go to the bloody new Singapore casinos then??!!