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Wednesday, October 06, 2004
Mahathir to RP: Reduce gap between rich, poor
FORMER Malaysian Prime Minister Mahathir Mohamad called on government and the business sector to reduce the gap between the rich and the poor in order for the country to “grow with equity.”
Mahathir was the keynote speaker of the 30th Philippine Business Conference of the Philippine Chamber of Commerce and Industry yesterday at the Manila Hotel.
“There is obviously more balancing act to do in order to grow with equity—equity between classes and races,” Mahathir told businessmen in the conference aired live over ANC Network.
Citing the Malaysia experience, Mahathir mentioned several actions undertaken to address the disparity differences.
Reducing disparity between the rich and poor can be done by taxing the rich and exempting the poor, indirect and direct subsidies to the poor, ensuring fair wages and protecting the poor from exploitation, and the provision of social services aimed at lessening the burden of the poor.
Control of prices of essential goods, educational support to ensure upward mobility for the children of the poor, job creation through labor intensive industries, protecting the poor from self-inflicted damage through abuses of rights including resort of industrial action, and other governments policies were designed to lessen the burden of the poor.
Among the actions he mentioned was for government to oversee that wage demands for increases should be sustainable, while employers do not exploit workers.
“There should not only be fair wages for the workers, but wages should increase in real terms so their workers will enjoy a better life as the economy grows. After all, the increasing prosperity of the country is also due from their inputs,” Mahathir said.
“To reconcile the need for increased wages while keeping cost low, the cost of living must not be inflated. Controlling the prices of essential goods minimizes inflation,” he said.
“The tendency of the business community is to raise prices at the slightest increase in cost. If fuel prices go up by 10 percent, they would increase prices by 10 percent. But fuel cost is likely to be only 10 percent of the cost of their goods and services. Therefore, increase of price should only be one percent, that is 10 percent of 10 percent,” Mahathir pointed out.
Government must then oversee the prices of essential goods and control them in order to prevent abuses, which cause inflation.
According to Mahathir, the rich in the community are assets because they create jobs and businesses, thus spreading wealth to the poor.
But the poor must be protected from the predatory instincts of the rich. The poor should have less or no taxes, and their income should be reasonable through government’s supervision of the employers and the rich, he added.
Mahathir said the rich must also be helped to legitimately make more money to help the economy grow. (Sunnex)
(October 6, 2004 issue)
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