Land Dilemma

I found an interesting article by Brunei’s National Development Party on the issue of land ownership (click here) which reminds me of a discussion I had with a colleague from the Land Department.

I am no expert in the whole land issue/policy but I do not think the objective of ensuring the local ownership of land has been successfully met, in fact I think it actually has backfired. True, it is a sensitive issue. And for that precise reason, it needs a special attention. The Land Code 1909 really is too outdated, and I do think it deserves some amendments that can accommodate the needs of a new century and most of all the needs of the current economy and its future development without compromising the ‘rightful’ ownership. However for now, I reserve further comments.

Salaam.

Moral Hazard

I'm quite pleased that someone brought the issue of moral hazard in my last post. Because to me it is precisely the reason why currently there is a debt of $15 million.

For those of you who do not know what moral hazard is, it is a 'behaviour' that occurs when someone KNOWS that he will not bear the full consequences of his action. (Notice my emphasis on 'knows'). So in the case of the housing debt we talked about in the last post, people are not paying simply because they know that there is nothing the government will do.

And this is also precisely the reason why we should have different sets of policies for different sets of people (and probably different sets of houses). At the moment, everybody (the poor, the rich and those in between) is paying the same amount of money with the same set of terms and conditions, which to me simply is not fair. And I also believe that this is the reason why any kind of enforcement is difficult because by 'punishing' one debtor entails the 'punishment' of ALL debtors, regardless of the economic status of the debtor. So, while sending a summon or court order or even confiscating the house of those debtors who are actually able to pay can be accepted as a just and a proper action, it is however morally unacceptable to do the same thing to those who are genuinely unable to pay.

Therefore I believe that my suggestion to write off the debts of those who are genuinely unable to pay i.e the poor and ONLY the poor, will not lead to moral hazard. The effectiveness however lies in the efficiency of the relevant agency to detect who is genuinely unable to pay and who is not and to be ready with the 'punishment' to those who are attempting deception.

Anyway, while the objective of providing a roof or a land for every Brunei household perhaps sounds simple, it does not necessarily mean that the policy needs also be simple (i.e. one policy, applies to all) which has proven that it is NOT simple at all. I believe nothing wrong with some creativity in policy-making as long as the objective is met.

There is a need for us to be clear with our national objectives; and every policy or every department or even every ministry must cater to each and every objective. From my humble observation presently this is not the case. Everyone seems to be trying to be a champion and meet its own objectives which most often do not tally with the national objectives. Oh well, what do I know? I'm just a student with loads of 'idealistic but not necessarily realistic' theories, ya?

Salaam.

Housing Debt

According to the Dep Perm Sec of the Ministry of Development, there is a $15 million outstanding loans for the National Housing Scheme and Skim Tanah Kurnia Rakyat Jati, and this if repaid can help build an additional 100 houses of class E plus infrastructure (see here). In other countries, housing loan arrears can result in homelessness (i.e you'll be kicked out of the house!) but NOT in Brunei.

*Tsk*tsk* Shame on You! Ungrateful Bruneians..!

But then I said to myself, $15 million? Only?! The last I checked, Brunei’s GDP was $15.9 billion in 2005. If you think about it, that’s only about 0.09 per cent! As much as I want to condemn this act or irresponsibility, I am sure there are many cases of genuine inability to pay. In the spirit of eradicating poverty in Brunei, what is the possibility of writing-off some of those debts? Especially to the poor, actually ONLY to the poor.

At this stage, I’m sure some of you would say “NO Can Do!” because that’s what my husband just said : ). I do, of course share his fear that the moment you give something ‘free to the poor’ then everyone will claim that he/she is poor. But then I said, I can also claim I am the Queen of Sheba and I am sure no one would believe me unless I can produce some evidence. So, for a person to claim he/she is poor, he/she needs to produce the evidence including declaring his/her lack of wealth and property.

Now, you ask, what about those who have children who can bail out their parents? You see, I think we assume too much. I ask, what makes we think that the children are willing and able to do just that? And for this reason, I believe we must have a system that ensures that the payment of the house is the sole responsibility of the buyer (i.e. NOT his children Nor his guarantors).

OK, what I’m trying to say is that Brunei needs to review its housing schemes. I think we simply cannot have a “one shoe, fits all” policy. Clearly, those who are unfortunate and less-able should have a different set of terms and conditions and prices. On the other hand, we need to tighten the conditions to those who are able, ensuring that they WILL pay (including a mandatory insurance that covers death).

Nevertheless, at the end of the day I cannot help but think that it is actually up to the individual to uphold his/her responsibility. At this stage however, I am really sorry that Brunei is unfortunate to have many irresponsible, dishonest and selfish people.

Salaam.