In order to win the Malaysian elections, both the ruling party and opposition have resorted to highly populist manifestos to win the votes.
Here’s a Malaysian opposition candidate promising the people free education all the way to university, cheap patrol, money for those over 60 and many other goodies.
Najib himself had already implemented free outpatient healthcare for the elderly, free health screening and welfare programs for the poor. To get re-elected, it was reported he had to ‘copy’ parts of the opposition manifesto so that he would not lose out in the ‘goodies for votes’ game.
All this highlight one often mentioned problem with democracy. In order to get elected, politicians make all sorts of promises that cost the country billions. Once they start handing out goodies, the country start to have budget deficits, borrow from international lenders and end up like Greece and Spain. This however is just one side of the story – that dire outcomes are linked to giving too much to the people is just one interpretation of the story…convenient interpretation for those who are against social safety nets. Spain’s problems are caused by the govt bailing out banks after its property bubble not welfare. Greece’s problem is messier – it ran a bloated govt sector and the govt cheated on the budget accounting with the help of Goldman Sachs.
So what is going to happen to Malaysia if the opposition wins and start its free education program. Will it go bust? According to the politician in the video, under the steady hand of the opposition, the state of Penang tripled the reserves in 5 years by running the place more efficiently and getting rid of corruption….all of the opposition controlled states have healthy finances.
In Singapore, for some reason, Singaporeans think of free education as a bad idea. But free education has existed in many countries like Germany for a very long time. Without going through the maths, we have been led to believe that something given out free is just not sustainable and will strain the govt finances. The strange thing about Singapore is the govt happily provide free university education through scholarships to many foreigners but insists on reducing the subsidy for own citizens by hiking tuition fees every few years.
But lets go through the maths to see how much is needed to make university education completely free in Singapore. Every year about 30% of a cohort enter university – roughly 12,000 students. On average they pay something like $8K in tuition fees [Link]and each university course is 3-4 years. So making university education completely free will cost the govt roughly 12,000 x 8000 x 3,5 = $336M more in its budget. The total amount is about 2-3% of our defense budget or 0.6% of our total budget. To put things in perspective the 2012 increase in defense budget was by $504M [Link]to $12.24B – there is no urgency to increase our defense budget which is already far in excess of what is needed to defend Singapore but they chose to do it over something else for the citizens. What I’m getting at is the issue of free university education has little to do with financial prudence and more to do with ideology – they refuse to do it not because the money is not there but they prefer to do something else with the money.
The Malaysian stoy is far more complex and intriguing. Under the Najib administration, Malaysia has a debt to GDP of 52% – making it the most indebted nation in South East Asia. All these promises the opposition has made to the people on the surface appear to be populist and designed to win votes. However, there is another dimension to this. The spending is only possible if they can get rid of corruption and unlock the billions lost in govt contracts and crony capitalism. In other words, the promises made can only be fulfilled if the opposition runs a clean govt and stay away from practices that has hindered progress in Malaysia.
Here is Anwar explaining his vision with great clarity and charisma.
For Malaysians it a choice between maintaining the status quo which they are familiar with or taking a chance with a new govt. The power structure in the ruling party makes it hard to rid itself of corruption because corruption and cronyism has become entrenched. Taking a chance with the PR coalition involve risking your future with an new govt without experience. The opposition has chalked up a decent track record in 5 states that they won in the 2008 elections and shown that they can get things done. For the Malaysia voter, the only way ahead and the only way to get real progress is to dismantle the existing power structure which is riddled with corruption …but that cannot be done without taking some risk with a new govt….
Lucky Tan
* Lucky Tan is an avid online blogger since 2005. He likes to study the thoughts of Singapore leaders and the laws of Singapore. He blogs at http://singaporemind.blogspot.com.