Press Statement by DAP
Secretary-General Lim Guan Eng in Petaling Jaya on 12.1.2008:
As BN will definitely increase prices after elections with subsidies
of RM 40 billion annually completely unsustainable, Malaysians must
demand a full commitment from BN to an equal share in Petronas profits
The Star estimated on 10.1.2008 that the
Malaysian government will spend RM 40 billion on subsidies annually
between 2007-8, with RM 35 billion in fuel subsidies and RM 5 billion in
other subsidies such as cooking oil, flour, education, housing and
agriculture. This huge amount of subsidies is unsustainable and the only
reason that fuel, cooking oil and flour prices have not risen is to
allow BN to win votes in the coming general elections.
As BN will definitely increase prices after winning the general
elections, Malaysians must press for a full commitment from BN in the
coming general elections to demand an equal share in the Petronas
profits to reduce Malaysians’ financial burden. BN claims that inflation
rate for 2007 is only 2% when the true picture on the ground in more
than 20%. When prices are increased, especially fuel, true inflation
rate on the ground may go up to more than 40%.
DAP expresses concern that Prime Minister Datuk Seri Abdullah Ahmad
Badawi has still not woken up to the challenges of negative impact of
high oil prices that has reached US$100 per barrel, the NEP and
Malaysia’s declining oil reserves that will turn Malaysia from an oil
exporter to a net oil importer in 2011, will damage future economic
growth and prosperity. The triple shock of high oil prices, the
anti-competition, anti-growth and anti-trade NEP as well as Malaysia’s
declining oil reserves are huge challenges that the BN government has
not even begun to address.
This oil revenue has allowed Malaysia to cushion the negative impact
from mismanagement, wastage of public funds and corruption scandals that
have plagued Malaysian society and would otherwise have crippled
Malaysia’s economy. When Malaysia becomes a net importer or oil by 2011,
one wonders where Malaysia is going to find the tens of billions of
ringgit needed to fill in the gap in the nation’s finances.
Oil contributed RM 53,311 million or 37.6% of the 2007 government’s
revenue of RM 141,790 million. In other words more than three quarters
of oil revenue are used to fund the RM 40 billion subsidies, which is
not sustainable and if continued would lead the country to bankruptcy.
Despite Petronas earning RM 500 billion since it was established in
1974, Malaysians have not benefited from a single cent in sharing in the
oil revenues. These contrasts with an oil importer like Singapore that
can afford to distribute S$ 2,000-2,500 a year to poor and unfortunate
US financial giant, Morgan Stanley had estimated in 2004 that over the
last two decades corruption cost Malaysia US$100 billion (RM 380
billion). With Petronas earning more than RM 500 billion since it was
established in 1974, one can imagine how much was stolen and that only
RM 120 billon or 24% of the RM 500 billion in Petronas profits were
channeled to the people with the remaining 76% or RM 380 billion stolen
by corrupt officials.
In other words for every RM 4 spent on development projects, the value
of work done is only RM 1 with the remaining RM 3 lost to corruption,
waste, inefficiencies and leakages. The actual loss may be higher as the
scandal of repairing Chinese primary schools in Muar showed that RM
30,000 was spent when the value of work done was only RM 3,000/-.
The time has come for Malaysians to demand a general election commitment
from BN to give an equal share in Petronas’ profits. Those earning less
than RM 3,000 per month is given an annual cash grant of RM 3,000 and
families with a combined income of RM 6,000 per month be given RM 6,000
annually. Such a scheme would cost slightly more than RM 30 billion
annually, less than the RM 40 billion subsidies spent. Better the oil
money is spent on the people than be wasted by corruption or white
elephant projects that are not productive except to the contractors.
Lim Guan Eng,