Monday, December 14, 2009

Malaysia an oil-cursed economy: Razaleigh

Dec 13, 2009

Kuala Lumpur - Petronas founder and veteran Umno leader Tengku Razaleigh Hamzah said yesterday that Malaysia had become an 'oil-cursed' economy because its political leaders had squandered oil revenues and shown no accountability.

The billions of dollars in wealth generated by national oil company Petroliam Nasional (Petronas) had 'became a fund for the whims and fancy of whoever ran the country, without any accountability', he said in a hard-hitting speech.

Tengku Razaleigh was the president of Petronas when it was set up in 1974 and later became Malaysia's finance minister. The prince from Kelantan is an Umno MP and has become a critical voice in the party. His speech was posted in full on the website of Malaysiakini online news.

Speaking at a youth meeting, he traced the formation of Petronas and what the funds generated from oil and gas deposits were intended for. He said: 'We saw our oil reserves as an unearned bounty that would provide the money for modernisation and technology. We saw our oil within a developmental perspective.

'Our struggle then was to make the leap from an economy based on commodities and low-cost assembly and manufacture to a more diverse economy based on high-income jobs.'

Although Malaysia's economy expanded fast, Tengku Razaleigh said, the oil wealth became 'a narcotic that provides economic quick fixes and hollow symbols such as the Petronas Towers'.

He added: 'Instead of being our ace up the sleeve, however, our oil wealth became in effect a swag of money used to fund the government's operational expenditure, to bail out failing companies, buy arms, build grandiose cities amidst cleared palm oil estates.

'Instead of helping eradicate poverty in the poorest states, our oil wealth came to be channelled into the overseas bank accounts of our political and politically linked class.'

 Johor MP opposes cap on fuel sale
Plan to limit foreign vehicles to just 20 litres 'tough to implement'

Johor Baru - Senior Johor politician Shahrir Samad said he disagreed with a government plan to limit foreign-registered vehicles to buying 20 litres of fuel near border areas, as it would be tough to implement.

An easier way to prevent foreigners from enjoying Malaysia's fuel subsidy would be for the government to give annual fuel rebates to local vehicle owners, or to ask Malaysians to show their identity cards when buying fuel near the border, he said.

Datuk Shahrir, MP for Johor Baru and a former domestic trade minister, added that if the problem was caused by rampant fuel-buying and smuggling at the Thai-Malaysia border, the government should address this directly.

He was responding to the announcement by Domestic Trade, Cooperative and Consumerism Minister Ismail Sabri Yaakob last Thursday that foreign-registered vehicles would soon be allowed to buy only 20 litres of fuel at stations within 50km of the Malaysian border.

The new ruling is aimed at preventing foreigners from benefiting from subsidised fuel and at curbing smuggling, especially at the Thai border.

The minister said the enforcement authorities at checkpoints would be directed to ensure that foreign vehicles left the country with no more than 20 litres of fuel in their tanks.

He said the new ruling would be implemented 'in the near future' but did not give a date.

Malaysia heavily subsidises petrol and diesel to keep pump prices about 30 sen (12 Singapore cents) below the market rate. It spent more than RM40 billion last year in fuel subsidies.

RON 95 petrol is priced at RM1.80 in Malaysia, RM4.01 in Thailand, RM4.31 in Singapore, Mr Ismail said. Malaysia also shares its border with Indonesia and Brunei on Borneo island.

Mr Shahrir said that giving an annual RM625 rebate for local vehicle owners would be an easier way to tackle the issue. It was done once, last year, when he was the domestic trade minister.

'If the problem is the smuggling of diesel in the north (at the Thai-Malaysia border), then we must come up with solutions to specifically address the problem,' he said.

He said it would be difficult for petrol stations at border areas to adhere to the ruling as most stations were self-service.

There are some 300 petrol stations within 50km of the Thai and Singapore borders with Malaysia.

'Who is going to monitor the sale of petrol to foreign-registered cars? What about Malaysians using Singapore-registered cars to travel between both countries?' he asked.

He said that having separate pumps for foreign cars was also not practical because of cost factors.

The Star/Asia News Network

No comments: