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Friday, 11 June 2010

The Naked NEP - Corruption

Low wages in Malaysia can be attributed to one and only one thing - corruption. Let me explain. The government is the largest employer in the country. Period. Wages in the government sector is not at all attractive. Even worse if we compare it to private sectors in Singapore.

But there is no shortage of civil staff right? No shortage of applicants to be police officers right? Firstly, I must admit that there are those in the civil service with the right attitude to serve and they are dedicated. But hardly too many of them. So, what are the rest doing there? Ahem - you got it right. The SIDE income is bloody attractive. Some call it side income, some say corruption.

If you have a car, you will know what happens. Everytime you see a police offer stopping someone, only one thing comes to mind. The one thing is - the police are very patriotic and they want to serve the King. Anyone notice that there is a picture of the Agong on our currency? Yes, so, we are all loyal to the Agong. For different reasons, of course. We all admire the Agong, especially the First DYMM of Malaysia. We all love his potrait.

This is when simple economics take over. Government is the biggest demand of labour. There is no shortage of supply. So, price remains low. If the Government is paying such low prices for labour, naturally, wages in the private sector won't be high. Why should the private sector pay so much more? If a cleaner in the government department gets RM 300, the private sector might pay only RM 400, or RM 500.

To improve wages, we must get rid of all the side income. Teachers giving tuition, land officers getting land, planning officers owning low cost units. The list continues. The side income must stop. Only then there will be less supply of work force to the Government. As supply dries up, prices will go up - assuming demand remains unchanged.

Having said that, it is not easy to get rid of corruption. It is already in-grained in our country. As they say, Malaysia does not have a problem with corruption. We welcome it. Hahaha.

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