Singapore registered nearly S$10 billion dollars (roughly RM30 billion) of surplus in 2017. In its latest budget forecast, the government gave every citizen over 21 years a one-time S$300 bonus this year.
On the other hand, the Malaysia government registered a budget deficit of nearly RM40 billion in 2017, but it is still very generously dishing out subsidies to poor households. BR1M alone costs nearly RM7 billion.
The contrast between the two countries highlights what Singapore is doing right, and by comparison, what the Malaysian government is doing wrong.
First of all, Singapore’s bonus is funded by surplus while Malaysian subsidies are funded by debt. Singapore can afford to pay a bonus, Malaysia can ill-afford mounting debt, the payback of which will eventually be borne by the children of those who received the subsidies.
Secondly, Singapore’s bonus is a one-time gift, conditioned on the government’s performance, not a perpetual handout.
If the government works to develop the country and grow the economic pie, instead of exploiting it as a tax base to fund unsustainable subsidies, all citizens will still own a piece of this country.
If the government continues with a policy of racial discrimination, someday they may find themselves sold to a foreign power to pay for their debt and they become squatters in their own country.
However, not all debts are created equal. If the debt is used to finance infrastructure building like schools, hospitals, building roads, bridges, flood mitigation systems, street lamps, or improving human resources etc. then the debt can yield much more benefits than the interest payments.
But if the debt is used to fund consumption, like paying for Astro satellite television services, then the debt is unproductive and a burden.
The path where Malaysia is heading is deeply troubling and disturbing. It is rolling back decades of civil liberties, squeezing the space of freedom, expression (and thoughts) and at the same time ramping up religious intolerance towards the minorities.
Unfortunately, those who receive subsidies do not see the big picture. For all they care, the subsidies they receive came from rich people and by their reckoning, the rich have the obligation to pay and the poor deserve the benefits.
It is a tall order convincing the poor they don’t deserve to be poor. Just look at Venezuela. It is on a death spiral. The more the country is in debt, the more the people demand subsidies and the deeper in the hole it digs itself into.
Venezuela has the largest proven oil reserve in the world. Yet it is mired in turmoil. Malaysia, like Venezuela, is also resource-rich, but it performs on a level far below the resource-poor little brother Singapore.
It goes to show, resources count for squat if you have incompetent and corrupted people managing it.