As posted by Dr. Mahathir Mohamad at Che Det on November 13, 2014
1. Let me begin by admitting that I am not a trained economist or financier. Still I don’t think it is fair for anyone to say I do not understand BR1M and the good things about it. I have in the past made some decisions on economic and financial matters which seem to have given good results for the country.
2. I have been opposed to giving monetary handouts as a way to increase the income of people right from the beginning. If at all financial aid should be given to the very poor who are unable to work to earn an income. My primary objection is because handouts on such a scale look too much like bribery. And when this is given near elections or the manifesto promises this, the impression that it is about buying votes just cannot be dismissed. If incomes are to be increase it should be by way of creating opportunities for work or business.
3. But BR1M has more negative implications than that. It increases the tendency towards personal dependence on the Government even for one’s income, without any effort by oneself. It weakens the character of people and reduce their competitiveness in the market place.
4. We want high incomes. But high income should come from increases in productivity. High productivity results from better education and training. A manual labourer cannot be more productive than a mechanic or a craftsman. And they in turn cannot be as productive as an engineer. The ability to increase productivity comes from greater added value to the products.
5. It follows that when we promote industries with greater added value, than the incomes of employees would increase due to greater contribution of the employees. We should note that in countries with big Government revenues from the foreign exploitation of resources, and people are given a part of the revenue to sustain a good lifestyle, there is a lack of desire to work.
6. Giving money does not increase productivity. Without increasing productivity, competitiveness will not improve. And the economy will not really grow. These countries invariably depend on foreign workers, executives and entrepreneurs.
7. When Malaysia adopted a policy of encouraging labour intensive industries, it was because at that time the people were jobless and had no income. After that to increase their incomes we switched to hi-tech, knowledge-based industries and our people are educated and trained for these more sophisticated higher income industries.
8. We can increase their wages further by adopting new technologies and management systems. Our workers should now be involved in designing new products, producing prototypes, testing and mass-producing. Marketing and sales of these more sophisticated products will also increase incomes.
9. We want to be a developed nation by 2020. We think that this can be done by increasing average incomes to a certain level. This is misleading. A few people with very high incomes will distort the average income. Per capita income should not be a measure of our achievement of developed country status. The emphasis on high income alone is not enough. In fact by itself it will not make the country a developed country. It would be even more misleading when the income is due to handouts by the Government.
10. To be developed we have to be at par with these developed countries in terms of education, technological and industrial knowhow, research and development, industrialised to a high level, commensurate infrastructure and high earned incomes for all.
11. It is imperative therefore to spend money on education and training to a higher level, to build up engineering and industrial capacities, to be productive and competitive, to expend money on building first-class infrastructure and to be researchers, inventors and developers.
12. Since we want to be developed in our own mould, we can reject the moral values of some developed countries. We see them obviously decaying because of the emphasis on unlimited materialism and personal freedom. We must sustain the good values that we have and acquire good ethnics which will contribute to our productivity and our income. In other words we must earn our income through higher productivity and not through handouts by the Government. The Socialist and Communists have tried to improve their people’s incomes through giving them money and making free availability of support facilities to ensure they have a good life. But Socialism and Communism have failed. They have to resort to free enterprise and hard work.
13. Finally we must not forget that Government money is derived through taxes on the people. Taxes raise the cost of living. Still the people are willing to endure raised cost of living because they expect the Government to give them security, to govern the country well, to have policies which benefit the people generally.
14. But the people would not like to see the taxes they pay to be expended in ways that are beyond this. Certainly they would not want their hard-earned money to be expended on winning popularity for anyone or political parties or administrations.