Bruneians and their toys

As I said never say never again, I cannot resist in making some comments regarding the more stringent enforcement of down-payment for car purchases. Firstly, I say it’s about time! This should have been enforced many years ago. Secondly, before many of you hurl all sorts of negative remarks toward the ministry and its directive, I urge you to think twice. Believe you me, this policy is not about making the rich gets richer or the poor gets poorer (i.e. the argument that poor-people-now-can –no-longer-afford-to-buy-cars or make it ‘expensive cars’), in fact it is the opposite.

The previous lax in the enforcement has made many Bruneians spent what they could not afford. This is what we called ‘wealth illusion’. We think we are ‘wealthier’ because we can afford to buy new and big cars, without even batting an eyelash. When in actual fact, we have actually trapped ourselves into ‘debt-slavery’. Don’t many of you feel that the more you earn, the less you actually take home? I’m not going to talk about how the US started (and now many parts of the world) its recession, but in one line, it is really due to this slavery.

Anyway, it should also bring good news to consumers. I am predicting (well hoping actually) that this policy will have an impact on the price of cars in Brunei. [To economics students, don’t read the next paragraph, think about it for a moment :)]

The policy will reduce the demand for cars. If the car-dealers are behaving ‘normally’, they will have to knock down the prices of cars (hurray for me! as we need to buy one) at the expense of their profit margin and perhaps the commission of our friendly car-salespersons. Either that or the interest rates will be knocked down.

So, there. That’s what I think and ought to happen. I’d be quite surprised if it doesn’t. I don’t think the demand will be unchanged since there are already too many cars waiting (at home) to be driven by too few people in Brunei.

Next, credit cards please!

Salaam.

Melayu Mudah Lupa

Our Malaysian friends held a farewell dinner for us last night. After the delicious beriyani and rendang, as usual we talked and discussed about the current issues. Last night’s discussion was interesting as it revolved around the ‘malay dilemma’ topic. At the moment, as you and I know, the racial tension in Malaysia is quite pronounced.

There were two camps last night. One opinion was that it is the malays’ right to be given the privileges given the fact that it is the malay land and therefore, the non-malays should not have any right to demand what is not rightfully theirs. And the success of the non-malays is seen as the result of some ‘conspiracy’ against the malays which include the policies that seem to be in favour of the non-malays or rather disfavour the malays.

Another opinion however believes that it is actually the malays themselves who are not utilising the privileges and opportunities that are given to them to their great advantage. The fact is ‘Melayu Mudah Lupa’ (Malay Forget Easily – the title of Mahathir’s book). We forget why we are given those privileges. Believing that they are our rights, we don’t value them anymore. As a result, we don’t work as hard as the non-malays (who have to survive) and the non-malays have emerged to be more successful, cleverer and wealthier.

And for this reason, we believe that there should exist a healthy competitive environment for the malays to prove that they are as good as or in fact better than the non-malays.

In Brunei, Alhamdulillah, we still live harmoniously together. Partly I believe is due to our small population and partly due to our ideology of ‘Melayu Islam Beraja’ (Malay, Islamic, Monarchy). As a result, the competition between the malay and the non-malay in Brunei is less severe or almost non-existent. This however does not mean that the Brunei malay is immune from the symptom of forgetfulness. In fact, we even take many things for granted. Take the ‘Ali Baba’ syndrome in the business sector for example. We want to be rich easily and quickly. Instead of genuinely running a business, we sell or rent out our permits and licenses to foreigners. As a result, the number of Brunei malays who have become true entrepreneurs that we can be proud is less than the ten fingers in our hands as compared to the number of business establishments (especially ‘kedai runcit’, barbershops and tailor shops).

Another example relates to the work attitude of the Brunei malays. The five-tea-break-a-day routine becomes the culture in the government sector. The attitude of ‘karang tah’ has lost the government millions of dollars in terms of productivity and even revenue-generation. As a result, the government sector, which is the first employment choice of any Brunei malay, is slow, inefficient and backward so much so that it can take weeks to send a letter within one tiny district, and months for the results of a few applications. (Come on! What is our population again?)

I totally concur with Dr. Mahathir who said “it is not race or ethnicity but the culture which determines the performance (of the people)”. So, to succeed we must change our culture. It is difficult, of course. To hope that we Bruneians will realize and change ourselves is probably a big wishful thinking.

Therefore, we have to create an environment that can change our perception of our rights of being Brunei malays, our perception of running a business and our perception of work – ‘work to live’ versus ‘live to work’ for our family and our country. We must look towards work as the true reward and take pride in our work, for without pride there may not be progress. This kind of environment may involve monetary reward but the reward should not outweigh the satisfaction of the achievement being made.

We have been blessed with oil and gas. We forget that this will not last forever. While the current generation probably cannot change, the next generation needs to change. We have to ensure that the next generation understands their purpose in life (which sadly is not understood by the current one). It is not an easy task but it has to be done.

Salaam.

Not Likely to Change

Apparently our local youths still think that it is their given birth right to work in the government sector (here for full news). Oh perhaps, their life is still full of roses that having no job is better than having a low-paying job in the private sector.

To solve this dilemma, here’s a thought. Considering the government sector is already saturated (or so as I was told) i.e. it can no longer employ the whole 6000 job-seekers (and it shouldn’t be!), there should be some mechanism in place that should stop the idea that everyone can get a government job. And at the same time, make people value their private sector job or at least stick to their private sector job until their contract ends (with good behaviour). So I say, increase the level of qualification requirement and make ‘private sector employment’ a pre-requisite to the ‘popular’ public sector job.

Now, with regard to the ‘elaun sara hidup’, I think it’s either we scrap it off OR give to ALL Bruneians, fair and square (after all everyone is doing their bits to develop the country, regardless of the sector, no?)

Salaam.

Are We THAT Thick?

After reading the Brunei Times’ piece on ‘Mobile Phones as a symbol of social standing’, the first thought that came to my mind was just how thick we Bruneians can be. In this holy month, I know I shouldn't be having any negative thought but I’m seriously frustrated! But I honestly lost my head when I read a 36-year old civil servant admitted that “his eyes are closed when he pays for a new phone”. O Dear! What is wrong with us?!

[Let me Breathe…]

I don’t know how these people can afford to constantly buy the latest phones. But I suspect credit, be it credit card or bank loan, is the main mode of payment.

Well, I came across an article in Slate that talked about the role of credits in our everyday lives. It was interesting the way it likened credit to a leverage i.e. power that allows you lift a heavy stuff. In this case, credits make everything appear so cheap. Or another way of seeing it, without credit, things look expensive.

Don’t get me wrong, I am not totally against credit cards or even personal loans. There are times, especially when we are travelling, credit cards will come in very handy. Or for when budget is tight and your freezer suddenly dies on you, then the personal loan that is being offered in the shops, can help save your life. But to use credits just to prove that you have a high salary or to have the latest mobile phone or camera that even can rival James Bond’s is beyond me! It’s even worse if you are buying a new phone at the expense of your child’s school fee.

In these last few days of Ramadhan, I can imagine the ‘eyes-turn-blind’ shopping frenzies are at their peaks in Brunei.

This can lead to a disaster, not only to the poor (or shall I call ‘thick’) person’s life but also to the health of the economy. In fact, I believe this is also another culprit that contributes to the increasing number of claims of being ‘poor’ in Brunei.

So I say, please…… whoever or whichever authority is looking into the credit policy in Brunei, to look into this seriously. It is high time we put a credit rating system in place. What I mean is that you can’t just allow any Tom, Dick and Harry that has a blue payslip enters into a credit contract without a thorough check on his financial background.

Everyday in the news, we hear about ‘credit crunch’ happening globally that has even put those giant corporations down on their knees and even collapse. It all started from careless and inappropriate lending. Anyway, it probably is still a foreign term in Brunei, so let’s keep it that way.

Selamat Menyambut Hari Raya Aidil Fitri. Spend Wisely!

Salaam.

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.

Are We Poor OR Are We Stupid?

It is sad to see and hear about the events happening in Brunei (i.e. the food clamouring and the coupon stampede) that have even result into human tragedy (courtesy to ranoadidas.com for always bringing the important news). It would be normal if it happened in a third world country, but for it to happen in Brunei, an oil-rich country, is quite extraordinary.

The question, as rightly put by Mr. Brunei Resources, is “What Happened to Bruneians?”

Now, there are 2 schools of thoughts. One says that it is simply because we are poorer and the other says we are too materialistic that we don’t even know how to differentiate between what is right and what is wrong i.e we are stupid.

Unfortunately, we can never truly find out until a proper income gap analysis is carried out. It is imperative that we know how many Bruneians are poor, how poor and why they are poor. Without such analysis, then we can never know and we will only end up having the rich blaming the poor (of being immoral and shameless) and the poor blaming the system (of unfairness).

While I do not doubt the existence of those who are genuinely poor, I also believe that the pool of poor people in Brunei is also largely made-up of those self-made poor, who are spending beyond their means. Regardless of how people become poor, we need to address poverty properly. There are 2 critical issues to tackle. One, how do we lift Bruneians off their existing poverty and two, how to keep the zero poverty (if it is ever achieved).

Now, if I were an economic advisor to Brunei, these are what I would suggest:

1. Get our statistics and figure right. We NEED to know our poverty statistics A.S.A.P.
2. If the finding (whether this is made public or otherwise) is that there are indeed a large number of poor people in Brunei, then we really need to review our economy. If people are poor because there is no job, then we need to pump-up the economy. This is THE time to make use of the oil-money.
3. Lifting people off poverty does not simply mean giving them money. We need to be creative in giving them the means to make money. True, this is easier said than done given the unfortunate attitude of some (most?) of Bruneians who more than many times do not see the rationale behind the self-aid help. But with proper monitoring and perhaps some taught management skill, I’m sure there will be some positive results. The key is for the relevant agency to NOT to give-up. Don’t let one bad apple ruins the whole basket.
4. It is time to differentiate the different types of goods available in the market. There are the luxurious and there are the normal ones. The problem in Brunei is that there are too many ‘high standard’ people who will not make do with just the normal goods and then there are also too many of us who always want to keep up with the Joneses. For many of these people, the euphoria of owning the latest mobile set or a branded watch has blinded their rational judgement and has reduced their mathematical ability to calculate their monthly balance to pre-kindy level. Therefore I believe the good old system of tax can somewhat alleviate this problem of euphoria-blindness. We need to tax (highly) the luxurious goods.
5. A credit monitoring system needs to be put in place. I cannot just go to any store and sign any credit agreement without a thorough check of my credit rating.
6. It is time to review the TAP contribution. There is a need to increase the contribution from the employees. We need to make sure Bruneians save for their own future. And of course, since Brunei coffer by now must have filled with a lot of oil money, I would also say that the government needs also to increase its contribution into TAP not only into the account of those in the public sector but also to Bruneians in the private sector. Afterall, the money is saved for the future. This contribution from the government I believe could be the key to reduce the remuneration gap between the public-private sectors. It would help increase the attractiveness of the private sector and would (hopefully) alleviate the problem of lazy Bruneians who would rather be unemployed than do manual job.
7. We need also to look at our system of income re-distribution. How do we re-distribute the income from the rich to the poor. While income tax may not be accepted in the near future, property tax certainly deserves some high level discussion now.
8. I don’t know how good our police force or those in the NCB are in combating drug wars, but I pray with all my heart for them to be really good.
9. Finally, I think too much subsidy make people too lazy.

Salaam.

Life After Oil

I was reading the post made by Brunei Resources on ‘Life Without Oil’. He suggested that Brunei should either decrease government spending and/or increase our tax base, which in economics term is what we call ‘contractionary fiscal policy’. This policy is usually applicable to an economy that has a budget surplus, which thanks to the soaring oil price, is actually the case for Brunei. But if you take the oil effect, Brunei’s budget will not be as handsome as it is today.

The effect of a contractionary fiscal policy will be a reduction in the aggregate demand which is not exactly the right prescription for a country that has little economic activities. Having said that however does not mean that the government should just spend all its income. It should be mindful of what it is it’s spending on. What we want is productive spending (and I agree with Mr. BR, this does not include subsidy). Spending that can stimulate the non-oil economy. And we want lots of this. Being a small economy (defined as having a small population) is not without its problem. And for that reason I personally think we need a strong government support (while it is still able) to help the economy as much as it can.

But the question of life after oil is still unanswered.

To answer this, we need Ricardian’s Theory of Comparative Advantage which says that we should produce and specialize in the production or services in which we have comparative advantage. What? You may ask. I say, look around us. We are so fortunate to have plenty of sun, land and sea, which I believe are extremely under-utilized. With a bit of hard work, I’m sure Brunei can develop its comparative advantage. If Singapore, an island that has an extremely limited natural resource can become one of the Asian’s dragons or Liechtenstein with a population of about 34,000 people and equally has a limited amount of natural resources can become one of the highly industrialising economies, then so can Brunei!

Life without oil will not be the end of the world as long as we do something about it. And we should start NOW. The current generation must help the future generation in the transition of oil to non-oil economy. Any ‘rentier’ habit has to be removed from the current system and the mindset of all Bruneians. With the right attitude, the right mind and the right policy Brunei could and should thrive. There must also be a strong will both from the government and the people and of course, some hard work too.

Salaam.

Battle of the Schools, Revisited.

I received many comments for my post on schools in Brunei a few months ago. While I do not doubt that parents’ involvement in their children’s education is imperative, I still believe that schools and teachers equally play an important role. I also agree that at the end of the day, it is the children’s own efforts that determine their achievement and those who have ‘the brain’ will make it anywhere. Although I do not think this is fair.

It still appears to me that most parents (including myself) do not really have a concrete reason why we send our children to a private school than to a government school. We assume we know the reason. We assume that by paying more, our children will learn more. Often, our choice of school is influenced by words of mouth. When we see or hear children of our friends or relatives are doing well in a particular school (which is almost always a private school), we assume our children will also be doing well in the same school. Now, if this is true (i.e. a private school is better) then those children who have able parents will almost certainly get better education. What about those children whose parents cannot afford to send them to a private school?

But the question remains, do we really know that a private school is better than a government school? Does the money we spend worth the quality of teachings our children are receiving?

Generally, we do not know the real performance of a school, the performance of the students, let alone the performance of the teachers. We do not know whether school A is better than school B. I remember when my husband and I went for school-hunting a few years back. We went to a few schools and all we were given was a few forms to fill along with the fee schedules. There was no information on the performance of the school or any information why we should choose that school. In the end, I had to rely on words of mouth, which is not an informed decision.

Here in the UK for example, we have the Office for Standards in Education (OFSTED). Every school is inspected and assessed. In the comfort of my chair I get to read reports about all of the schools in the area which are published in their website. Every school that I visited also gave me a copy of this report.

Now, this is what I call a transparent system that leads to an informed choice which we are sadly, lacking. Now, I don’t know the content of the Ministry of Education’s SPN21, I hope transparency is also one of the agenda. It will not only help parents make the ‘right’ decision, it will also ensure the quality of our schools, be it private or government. And most of all, it can ensure that every child receives a good quality education.

When all schools are assessed and results made public, naturally every school will want to be the best and want to improve their past performance. This will not only benefit the children and the parents but will surely benefit the entire education system. Who knows, if the government schools prove that they are better than the private schools, parents don’t even have to fork hundreds of dollars each month. And that will be sweet indeed…

Salaam.

Brunei and Oil Love Affair

My friend Roger Lawrey talks about Brunei's diversification.
I couldn't agree more.

Salaam.

Meritocracy

I've been busy in the past few weeks finishing the final chapter of my dissertation. Alhamdulillah...it's done. But work is not over for me. I need to revise my earlier work. Time flies fast. It's almost 4 years. I can't wait to get to the end. Insya Allah, I will get to the end.

My husband has also finished his course which means it's just another step for him to become a fully qualified international architect. I'm sure he will.

Anyway, both of us believe that education is a lifetime investment (and equally, a lifetime pursuit). Admittedly, it is tough and not easy. There are also times when we question ourselves whether it's worth it. The time and the money we spent - We could have bought a BMW or a Mercedes (that's what I always said to my husband, haha). But most of all, we wonder whether or not we can use what we have learnt to contribute to the development of Brunei?

I'm sorry but Brunei has yet to prove that it's a nation of meritocracy, where people are rewarded for their contribution (regardless of the age) and not for their length of service or worse, for certain 'birthrights'. If Brunei wants to change, it needs to accept and adapt new ideas and new technologies that Bruneians have acquired abroad or even within the country. It needs to listen and encourage its people to question, to debate and to offer solutions. There should also be a two-way communication. Only then Brunei can breed intellectuals and thinkers among the entrepreneurs, the professionals and the policy-makers, who I believe will help create a much diversified Brunei, a dynamic Brunei.

Salaam

Boost Agricultural Production A.S.A.P

Today Malaysia announced the increase in fuel prices, lifting their price ceiling in the move to reduce government subsidy. It is quite shocking actually. I didn’t expect the price increase would be ‘that’ much. (Note: for a very interesting thought about this by Dr Mahathir, click here).

The effect of this will not only be felt in Malaysia, but Brunei too. Malaysia is one of Brunei’s main trading partners. 20 percent of Brunei’s total import comes from Malaysia. About 40 percent of Brunei’s total food import comes from Malaysia. Malaysia is Brunei’s main source of food supply. When Malaysia’s fuel prices rise, we should expect their prices of all other goods will also go up. Naturally, we will also import their inflation. And that is bad news to our consumers.

All of the events that take place around the world including the current world’s food crisis cannot and should not be taken lightly.

Therefore, I think it is high time Brunei seriously thinks about its food production. Enough talk (actually I don’t hear any talk at all since HM’s titah during the Leg Co), act. Fast. Make it Brunei’s ‘emergency’ priority agenda. Set up an ‘agricultural’ fund if we must. At times like this, what the government should do in fact is to attract people to develop the agricultural industry. Call it a fast-track strategy or whatever. Get as many Bruneians or even non-Bruneians to produce food in our country. The government cannot afford to be choosy. Cut down those red tapes! (I tell you, somebody I know tried applying for some land to be developed 2 years ago. Until today, he has not heard from the Agriculture Department). Somebody please do something!

We shouldn’t think that all the events happening around us will pass on any time soon. It could go on and on. We really should use it as a catalyst to achieve our (long overdue) national food security objective. Increasing agricultural production should be the long-term solution for Brunei. We really cannot afford to just sit and wait and do nothing. Because whether you like it or not, for a country that has a high dependence on food import, these events affect us. High food price will increase the cost of living. Well, I guess I’ll leave you to your imagination to picture the effects of that.

Salaam.

Big Salary, Enough Salary?

Today, thousands of teachers in the UK went on strike and as a result thousands of schools were closed, forcing millions of parents to look for alternative daycare for their children. Thankfully, my children's school didn't participate so school was normal for them.

Today was the teachers. Previously, the university lecturers, the postmen/women and the policemen/women also went on strike due to dispute over pay rise.

I'm thankful that no such incidence has ever happened in Brunei. I cannot imagine the reaction from our government :). But then the pay and perks in the government sector are higher compared to the private sector. Whether or not the current salary scales are appropriate (i.e. taking into account the inflation growth rates over the years) is however another question. I can see the dilemma our government would be facing if the current wage rates are found to be below the appropriate rates. If it raises the scale, it will further widen the public-private wage gap.

Don't take me wrong. I'm not asking for a pay rise. But I think it is unavoidable and equally necessary for some sort of study on the appropriateness of the current salary scale to be carried out especially in the light of poverty reduction. The results will not only be used to aid the poverty alleviation policy but will also be useful in other policies and most of all will be very, very interesting (at least to me!).

Salaam.

Rejuvenate Brunei's GLCs

What interests me the most, while browsing the World Trade Policy Review of Brunei, is this bit of information:

(Per cent of GDP, unless otherwise indicated)
Saving and investment 2002 2003 2004 2005 2006
Gross national savings 47.2 48.6 51.4 59.1 62.4
Gross domestic investment 21.3 15.1 13.5 11.4 10.4
Savings-investment gap 26.0 33.6 37.9 47.8 52.1

(sorry, I'm no good in pasting the Table. For the full set click here and I refer to Table 1.2)

The saving-investment gap is huge! And the gap is because there is too much saving and too little investment (which isn’t usually the case in many countries). Now, if you’re an economics student and using Year 1 Macroeconomics, you will know that this excessive saving means there is a capital account surplus which could lead to a glut in the economy which eventually could lead to a recession.

Now, my question is why oh why are we acting as if we do not have enough capital to move the economy? To be specific, we are acting as if we’re having a gap that is caused by too little saving and therefore needs an external financing i.e. the FDI. And I have the impression that we seem to be helpless without the FDI. Now, I’m not saying that FDI is not important and I’m sure I don’t have to enumerate the reasons why we need an FDI. What I’m trying to say is that, given the availability of excessive domestic capital, it is high time that Brunei should also place the importance of the domestic investment in the effort to diversify the economy.

Despite the excessive capital however, the private sector in Brunei is weak, both in terms of resources and expertise, to undertake any major domestic investment. Therefore it is imperative (and equally inevitable) for the government sector to assist the private sector development, in particular, to do the investing.

To tell you the truth, at the beginning I wanted to propose the establishments of government-linked companies (GLCs) the likes of Singapore, but then I remembered, we DO have GLCs! Unfortunately for some reasons our GLCs are very quiet (if not, I wouldn’t have forgotten hehe) and do not appear to be spearheading the investment efforts.

I’m sure by now, many of you will be saying that Brunei’s GLCs won’t work because their managers and Board of Directors are civil servants who lack business acumen, risk-averse, slow in decision-making and their investments mainly political as opposed to commercially motivated. TRUE! And for this precise reason, I believe we need to rejuvenate our GLCs by removing (or perhaps reducing) the number of civil servants in the companies. Let’s put true entrepreneurs and real managers. If we can’t find locals then for the love of Brunei, hire (the best money can buy) foreign experts! Because the lack of competent local human resource to drive the economy is our main problem in the first place (which is nothing to be ashamed of, given our small population and the current nature of our economy, however this does not mean that Brunei’s HR should forever be at the current state) and I don't see anything wrong in hiring foreign talents. Nevertheless, we should be using Singapore as an example. Singapore’s phenomenal economic growth is, after all, the result of its strategy of ‘state capitalism’.


Let’s face the fact, we are not exactly a foreign investment magnet and on its own, our private sector is too weak and too small to drive the economy. At the same time, our oil is depleting. Therefore, I believe the inevitable solution is for the government, through its GLCs, to assume a proactive role both in the entrepreneurial development and the economic diversification effort. For the GLCs to assume this role efficiently, they need to have adequate resources and most importantly become proper business entities which mean risk-taking and being competitive. It is time for the government to let go its domineering role in the GLCs’s decision-makings and to also take the risk. Because if it doesn’t, then the only alternative for Brunei is for us to pray (very hard) for oil to never runs dry.

Salaam.

Wish List

In light of the current Leg Co Session, below are my 'wish list' of topics that I hope the distinguished Yang Berhormats are debating:

1. Unemployment: This has been a main issue since 10 years ago which I feel has not been properly addressed with only some 'piecemeal' solutions thrown from different departments without any coordination. The demand as well as the supply sides of the issue have to be debated. The issues involving the unemployment include:
i)The conflict between local vs. foreign workers: which to a certain extent related to the attitude of local workers.
ii)The remuneration gap: And NO I don't want to hear the same proposal where the employer (the private sector) is asked to give higher wages. That, to me is NOT a solution. What can the government DO to reduce this gap?
iii)The attitude of local workers: A serious lack of commitment.
iv) The welfare and rights of workers: What more can I say?
v) The rights of employers: While employees can lodge their complaints to the Labour Department, where can employers go?
vi) The availability of jobs. Can the private sector provides 'enough' jobs?
vii) Working age: The merits/demerits of extending the pension age.
viii) Job trainings/ skills etc.

2. Social illnesses: Drugs, school-dropouts, teenage pregnancy etc. These are just at the top of my head.

3. Poverty: I cannot stress any further. His Majesty's vision of 0% poverty needs to be addressed properly. The issues related to poverty include:
i) Establishing a national poverty line - in order to measure the gap between the rich and the poor and just HOW poor are we?
ii)To go beyond the solution of providing just 'monetary assistance'.
iii) To combat social illnesses which are very much related with poverty.
iv) To review some fiscal measures i.e. tax and subsidy as the traditional means of redistributing income.

4. Last but certainly NOT the least, BRUNEI's Future:
i) After Oil....What?
ii) Oil Fund to provide for the future. If BIA is doing this, where DO we stand at the moment? How secure is our future? How long can the fund sustain Brunei in the event oil runs dry (This can happen, No?)
iii) Pension schemes: Is TAP enough? How can we eradicate poverty if there is not enough money to provide for the daily expenses, once out of work. What is the merit/demerit of re-introducing a (NOT SO LAVISH) pension scheme. What is the possibility for the 'employer' to increase its contribution. BUT bearing in mind the capability of the current 'weak' private sector. How can the government assist the local workers in the private sector in the provision of a secure future.
iv) What about some form of a National Insurance for every working Bruneian? What happens if accidents occur, death etc?

Oh the list goes on!
But then these are just a mommy's wish..and we'll see how the session goes.

Salaam.

Spoilt and Shameless

My blood boils when I read Mr BR's post on What Would Superman Do?. Not because I am angry at him but because I deeply share his sentiment. I still cannot fathom why our people can be so irresponsible, shameless and so selfish. It makes me so sad to think that after 24 years of independence, we are still unable to stand on our own 2 feet and still need the government to do basically everything for us! I call it the Third World Mentality. You know why? In the developed countries, people are so independent. Their self dignity and pride are strong. They don't ask for help easily because they take pride in what they do. Often you see people in wheel-chairs and people who are pysically less fortunate are doing what normal people do and as efficient. We have a lady - an undergraduate students' secretary- in our department who has lost 1 leg. One day, I was looking for a printer cartridge and it was in the last drawer of a file cabinet. Instead of telling me where it was, she went to the cabinet, with her crutches, and bended down to get the cartridge. I was surprise! I quickly went to her and obviously offered my help and you know what she said with her smiling face, "It's OK...Thank you...". Gosh!

Now, look at our people! God has given each one of us a brain, 2 arms and 2 legs, and WHY oh WHY are we acting like some helpless creatures in this world? Where is our self dignity ? Before I read Mr BR's post (I suggest you read it too!) I was discussing with my husband regarding the irresponsibility of our people. Someone we know who has been fortunate enough to get one of the houses in the Rimba Housing, apparently has not been paying the government. Both husband and wife are working with only 1 child to support. Furthermore, they have a rental house somewhere in Brunei which is being rented. I mean WHAT are they thinking?! What is worse, because of their irresponsibility and their selfish act (please see my previous post on this), the person who acts as their guarantor is now being burdened. The last we heard, the poor guarantor had received a few warning letters. AND these sad (good-for-nothing) couple just duh! I believe this is NOT an isolated case because a couple of years back, during a dinner at the Istana, I was fortunate or rather unfortunate to hear the gruesome tales of our people not paying their debt, have mountains of debt and on and on from officers from various government departments.

And we are not only talking about housing payments (which is a major issue) but also on things as mundane as paying the rent for wedding clothes (baju pengantin). Just a few days ago, my sister who is about to have her baby shower (Mandi Berlawat) told me that she was shocked that her i.c was being asked by the shop from which she is renting her baju. Simply because the shop assistant told her that there have been MANY cases where people just don't bother to pay and obviously never return the attires. GOD!

What is WRONG with us, people? I am really-really sad. For a Muslim and a wealthy country and not to mention a caring government, what MORE do we want? Honestly, I have a headache thinking about this..and I think I better stop here before I develop a migraine.

Mr BR was nice (presumably subtle) to title his post as 'What Would Superman Do' because I don't think we need a superman, as it will make matters even worse, what we need and deserve is for someone to give us a hard KICK in the b*tt.

Salaam.

So You Think You Can be like Dubai?

"My Grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel"

Sheikh Rashid, the previous ruler of Dubai.

Well, a couple of years back (actually for all I know, we still think we can be like Dubai) there were talks about following Dubai's model to development. Nothing wrong with that - as long as we talk, the talk and walk, the walk. Anyway, I found this interesting Harvard paper 'Dubai Strategy: Past, Present and Future' which to me gives a good crash course on Dubai's development. Have a read, it's only about 9 pages long (minus the graphs) but really it tells the goods and the bads, which can be very interesting lessons.

Salaam.

P.S. Thank you all for your comments/views on my previous posts. I will get back to them once I've handed my chapter to my supervisor.

The Dilemma of Teenage Pregnancies

I was reading an article in Slate regarding the declining rate of abortion in the US. There were a number of factors involved of course, including voluntary prevention through birth control schemes nevertheless, the debate continues (on legalising abortion). Interestingly however, it was reported that more and more Americans are now campaigning not against abortion, but against 'teen sex'.

Now, for a Muslim country, therein lies the dilemma. Sex education, to give or not to give? By giving sex education at schools, we're seen as conforming to the act (of pre-marital sex) which is forbidden in Islam. By not giving it, we are faced with social illnesses: abortion, sexual transmited diseases, (unwed) teenage pregnancies and worse of all, abandoning or killing innocent babies.

Whether we like it or not, we can't just turn blind eyes to the increasing trend of 'teen sex' in Brunei. No data, however is available to support this but from my conversations with a couple of doctors in Brunei confirms that the trend is worsening. I once asked one of my doctor friends, why is there no collaboration between the Health Ministry and the Ministry of the Religious Affairs (MRA). At that time, I thought by informing the MRA, at least the problems associated with 'single (teenage) parents' could be prevented and let the teens be responsible with their acts. And she replied that if they were to inform the MRA everytime an unwedded teen got pregnant or delivered a baby, then the worst might happened. How so? The pregnant teens (who were already scared) now would not have any place to go. What is feared that more and more illegal abortion would take place which would be harmful to the pregnant teens and worse, more and more innocent babies would be left abandoned. Even as it is, according to her, these pregnant girls only went to seek medical help at a later stage of their pregnancies which were often not without complications.

Even if the teens seek an early help, it may also not help solve the problems. Once they are found pregnant, obviously the morally right thing to do is to marry them off. But their future could also end there. They have to quit school. Without proper education and qualification, how do we expect them to lead a high quality life? How do we even expect them to provide for their children?

Now, back to sex education. I guess, to preach through the morals of religion alone is no longer sufficient. What is needed I think is a good and open communication between the teenagers and the educator (including you and me). The more these young people have their questions answered regarding contraception, relationships, sexual health and the responsibility of being a parent, I think will help them to make the decision in delaying any sexual relationship and hopefully to get to do the right thing of 'sex after marriage'.

No matter how and what approach we want to use, please let there be one. Pregnancies among the teens not only affect their lives but also affect the nation as a whole, especially for a country where human resource is valuable. If you read my previous post, unwanted teenage pregnancies could lead to a vicious circle which could lead to poverty and thus affecting the healthy development of the nation. It is a tough challenge of course, but somebody HAS to do it.

Salaam.

Ain't No My Business!

I must admit I was quite disheartened by comments made by some people who spoke to me and emailed me regarding my view on the fuel subsidy as well as my view on Bruneians’ lavish lifestyles. I however cannot help think how hypocrite these people are. Before this, they all wanted change. Brunei should do this, this, this and that. When the time to change is finally there, then they thought otherwise. So, tell me, what do YOU want? How do you expect the economy to change? By fate? When oil runs dry? Since there are so many of you who are clever enough to change the economy, then why aren’t we changing? Why is the GDP structure still the same since aeons?

Some said, so what if people drive big cars and buy expensive goods. Why should they think of tomorrow when they can enjoy today? And most of all it is none of MY bloody business to tell off people what and how to spend their income!

AND these are my answers to you:

Firstly, YES it is none of my concern what you people do with your money. It is YOUR life. BUT please stop complaining. You are the very people who keep on moaning that life is unfair. You are the first people who would object to real changes. If you think your future and that of your children’s are in good hands, then why should it bother you that the fuel subsidy will be lifted, or even if one day income tax will be imposed?

Secondly, it is clear you are missing my point. Nobody says that Bruneians should live shabbily or eat ‘nasi dengan kicap’. By all means, for those who think they can afford luxurious livestyles, then who’s stopping? If you must know, it is also equally harmful to the economy if nobody is spending (like what happened to Japan). My message is meant specifically to those who cannot afford such a lifestyle. Ukur baju di badan sendiri as the saying goes. Not everyone has a 4-digit monthly income, you know! And I have also seen many of those who are earning decent monthly incomes, who work as senior officers in government departments, cannot even pay their children’s school fees! WHY? Simply because they value their NOWS.

My aunt, who is a headmistress in one of a well known private primary school, told me that they were having a dilemma. She told me that there were HUNDREDS of parents who could not pay the school fees. She said she would understand if they worked in the private sector but these parents were government officers! I asked her what about the government’s education subsidy i.e. the monthly payment of what $120 per child (please correct me if I’m wrong)? Where did the money go? She said probably to ‘the car’, because apparently some parents bought new cars a few weeks before the fee was due. She said it was heart-breaking to make the decision of expelling children from school, just because their parents think cars are more important in their life. As much as the school wants to help the children, at the end of the day my aunt says, “it is not a charity”.


But, think of the consequences. It is not only the child who will be affected by such selfish act. The whole nation will do too! Now, I’m not going to put forward the argument that if you think you can’t afford to pay the private school’s fee, then the children should be sent to the government schools (while education is still free!), because as a parent myself, I know that I want the BEST for my children. But, please I implore, PAY their fees! And I'm also NOT patronising the quality of the government's schools. I am, after all, a product of one. (Hmm.. perhaps another blog entry for this topic).

Now, again back to the fuel subsidy. I ask myself, is it really fair for the government to reduce the subsidy now? When prices of goods are on the rise? When everyone is feeling the heat? When, even the global economy looks gloomy?

Well, my answer is still YES. My views still stand. I still think it is still a waste for the government to spend more and more to subsidise the prices of car fuel. As the oil price goes up, the amount of subsidy will also go up. I strongly agree with the comment made by 55 in my last post. If and when the subsidy (of any kind) is reduced, then some sort of concession system must be set up to help those who truly deserve the subsidy. Subsidy in economics is after all, an instrument to distribute income equally. It is NOT meant for everyone. Those who are earning above a certain level (usually above the minimum) let alone those who have hefty incomes, do not deserve to receive such subsidy especially when no income tax is imposed.

Finally, my profession is related with policy-making. So, I believe all of the problems associated with the economy, WILL be my concern.

Anyway, I think I understand that the resistance to the policy change is not caused simply by people not wanting to change (right?). I guess, the problem is related with what economists say as 'asymmetric information'. The public do not know what to expect. Are there any supporting policies to help remedy the situation which is expected to have negative effects? And which government agencies will be responsible in providing the supporting policies? How big is this subsidy reduction? And so on. I myself, am anxious to find the answers. I think it would be ridiculous if no one is doing anything to help mitigate the effects.

I guess that's all I will say for now. In any case, this blog is meant for those who are interested in economics and its workings without the boring mathematical equations. As I said in my first post, my views may be right, but most often they will probably be wrong.

Salaam.

Fuel Subsidy, Again.

I'm quite disappointed with the comments made by the acting Chairman of BEDB. As an economist and an entrepreneur, it is actually the least I expected from him. A few days ago he did mention that Brunei should stand up and face the economic challenges and be prepared to changes and be more adaptable to changes. Well, this is a challenge! If Bruneians can face this challenge, then let's bring the others...

First of all, he didn't seem to acknowledge that car fuel, at times when global prices are rising, is not a necessity. True, people's lives will be affected as the cost of driving a car will go up due to a reduction in subsidy and it will also affect the prices of goods. But I believe people will react by economising not only the use of their cars but also their day to day purchases down to the level of necessity. It would certainly be a different matter, if the government were to reduce the level of subsidy on electricity (but again Bruneians DO NOT economise their electricity usage).

Now, if the government were to decide to go ahead with the slashing of the fuel subsidy, the relavant government agencies should come forward to alleviate the effects on the lives of Bruneians. Firstly, this is when Price Control should be THE active policy in regulating the prices of necessities. Price ceilings of goods which are deemed staple MUST be worked out NOW so that sellers do not take advantage of the increasing fuel price.

Secondly, the Ministry of Education and/or the Ministry of Communication for instance, should come forward in helping parents transporting their children to school. School buses have to be provided and preferably privatised. This will not only directly help the people but also can help boost the transportation industry.

According to the Minister of Energy, about B$500 million was spent on the fuel subsidy in 2005. Again, that's A LOT! The money could be spent on other productive activities including in providing the resources for the above-mentioned activities. But the one use that can directly help the weak private sector and perhaps nurture new entrepreneurial ideas is to use it as SEED MONEY. Instead of spending millions making Bruneians lazy, why not use a fraction of the money making lots of Brunei entrepreneurs. Now BEDB could play a big role here as the agency responsible in giving seed money to the potential entrepreneurs.

Anyway, what I'm trying to say is that in 'every challenge there lies an opportunity' as there must always be 'a blessing in disguise'. This should be the slogan to any good entrepreneur. And I also wonder why should Bruneians be insulated from the effects of the global forces as I think it is unhealthy to the development of a resilient economy and a nation as a whole. It is high time, Bruneians learn to think rationally and start prioritising their lives. Not only that, I also think that a shock is probably what this sleepy country needs to revitalise its weak economy.

Salaam.

"The basic difference between an ordinary man and a warrior is that a warrior takes everything as a challenge while an ordinary man takes everything either as a blessing or a curse." (Carlos Casteneda)

P.S. If you read the news, the US economy is heading more and more towards a recession. A gloomy sign to the global economy. Now, that's a BIG challenge!

YES To Realistic Fuel Prices

Many people may disagree with me, but I think after so many years, finally someone is thinking with a right mind!

If you read my previous post on car fuel, you would know that the prices of car fuel in Brunei are perhaps the cheapest in the world. It is not without its cost. And the cost is obviously borned by the government in terms of subsidy (for 1 litre of diesel, the government is paying about 80cents and 60cents for a litre of Premium 97). That is A LOT!

Many of you would, by now are probably thinking, 'So What? Oil Price is soaring high now, surely the government's coffer is filling and why not share with the people?' . Well, first of all, oil and fuel are 2 different things. The car fuel's prices depends on the oil prices. When oil price goes up, the fuel price also goes up or the cost of producing fuel goes up. The price that we pay however is way below the cost of production. That means the government has to spend more on subsidy to ensure the fuel prices we pay in Brunei stay the same.

Secondly, yes it is true that the increase in oil price would definitely increase the government's revenue, but the money could be spent on other productive things which would have positive economic long-term impact on the country. Life is, after all, not all about cars! And, I believe it is also the time that the government increases its saving (and investment) for Brunei's future generation. in order to maintain our standard of living.

Thirdly, I honestly think that it is high time that the Bruneians live in a real world. By having realistic fuel prices will definitely awaken many people. The last previous posts, I wrote about 'rentier mentality'. As a result, many Bruneians take things for granted. Ever since Brunei started to export oil, Brunei has become a 'welfare state' up to the point that the people do not seem even know how to stand on their own feet! The government becomes the soul provider and this causes Brunei economy to stand still. Worse, people endlessly complain that the government is not doing enough. People want MORE, but never GIVE back!

Look at Norway, the third largest oil producer in the world. Do you know how much their fuel costs? The last I check, it was about US$7 per gallon. With the current US rate, that's about B$2.40 per litre! The government imposes higher tax, at times when oil price goes up, to reduce consumption. And their population of about 4.5 million use cheap hydro energy power! Well, where they have 'hydro power', I think Brunei should seriously be looking at solar energy as an alternative. And, now is a GOOD time for Brunei to seriously invest in some solar power.

OK. If you are still not convinced that a reduction in fuel subsidy (an increase in the fuel price) will do Brunei a greater good, I also believe that other positive impacts will also result.

First, I think the transportation industry may stand a good chance to benefit from such policy. People may start using buses and taxis. If you are still asking whether or not Bruneians are ready to take such dramatic actions (dramatic only in Brunei as it is perfectly normal for people to use public transportation abroad) well of course the answer would be NO. No one is ready to change their comfortable lifestyle. But an improved transportation industry will create more employments, improve services and most of all, can help reduce pollution.

Second, the price of cars will go down. The rule of demand and supply will apply. As demand for cars go down, price will follow.

Third, people will (hopefully) think twice of buying luxurious cars for the sake of showing-off and instead will spend the money on other important matters in life :)

Finally, I also think that it will help foster a stronger family relationship and communication. People, especially family will economise the use of cars. Gone will be foreign drivers. Parents will collect their own children. Husbands and wives will probably share the same car. As a result, communication improves and LOVE grows.....hehehe.

Anyway, these all are just my thoughts. I will probably change my mind when I'm back in Brunei haha. But I still strongly feel that more positive effects will come out of a policy change in the fuel subsidy. Proper research on the impacts obviously are called for. I do however hope it WILL be implemented.

Salaam.

P.S I am still sure that many of you are saying that 'Other prices have gone up too!'. Well, I say 'Welcome to the Real World.....'.