“Rent-seekers have never had it so good since the mid-1980s. For instance, soaring property prices brought fabulous riches to developers who could rely on swift approvals for projects,” said the Gua Musang MP, who is popularly known as Ku Li, at the launching of Anas Alam Faizli’s book “Rich Malaysia, Poor Malaysians” on Friday.
..thanks to the wrongful implementation of the New Economic Policy (NEP)..its implementation went haywire and wrong because of the practice of patronage that had led, in the first place, to cronyism and rent-seeking that we had just spoken about.
..What is sinful and cannot be forgiven is the ease with which the power that be had been dishing out subsidies to such entities as the national power supplier, the independent power producers and some other non-power outfits. As has been pointed out by Anas, since 1997 this subsidy has amounted to RM136.5 billion.
The sad part is that while these power producers continue to enjoy subsidised fuel price, petroleum subsidy to the consumers – which purportedly cost the government RM14 billion in 2011 – was partly discontinued recently.
It is glaringly obvious that the government has been treating Petronas as a cash cow. Anas continues to point out that over 37 years from 1974 – 2011, the government had been paid some RM529 billion in dividends, taxes, petroleum proceeds and export duties from the national oil company.
The reliance on Petronas to help outfits with strong linkages to the government out of financial trouble has been going on from as far back as 1985. In that year it rescued Bank Bumiputera with a RM2.5 billion bailout and again in 1991 when it coughed up another RM1 billion. In 1997, Petronas had to rescue the financially ailing Konsortium Perkapalan Berhad for RM2 billion. The national oil company was also made to underwrite the construction of the Twin Towers in the heart of the KL golden triangle for RM6 billion and the building of the extravagant Putrajaya for RM22 billion.
In all, more than a half trillion ringgit have been spent. This amount could have been used more productively to fund a national pension programme for Malaysians as has been done by a certain Scandinavian country.
This extravagance that had been forced on to Petronas has also deprived the company from the much needed cash build-up for reinvestment which would ensure its business sustainability.
Given the finite nature of hydrocarbon as a resource, it is important for Petronas to look further afield at investments in businesses outside of oil and gas. Looked at from this perspective, it is all the more critical for the corporation to have a strong cash reserve for reinvestment purposes.
..Petronas .. But sadly, it is being abused and treated as the piggy bank whenever the government needs cash in a hurry.
.The truth is that there had been consistent political interference and this had affected Petronas, even though it is a professionally well run corporation. There is a blurring of lines demarcating the party in power and government, and by extension, the party supremo and the head of government. Cynics would contend that it was done on purpose to facilitate the development of politics of patronage. This, in turn, led to the growth of crony capitalism.
source: The Star