12 TELLING IT AS IT IS theSun | WEDNESDAY JUNE 3 2009

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thesun says

Let’s talk our way out of the gloom

THERE is so much gloom all
around in the world today that
any opportunity for a meaning-
ful discussion to understand the
problems that beset us should
be welcome. Any forum where
suggestions which can help to in-
fluence the formulation of strate-
gies to resolve the problems can
be debated should be welcome.
Thus the on-going Asean-ISIS’s
Asia Pacific Roundtable which
began on Monday in Kuala
Lumpur should be welcome
just as similar processes to
promote peace and understand-
ing organised elsewhere should
be welcome.
In its 23 years of existence
never has the APR met in such a
gloomy atmosphere where new
problems seem to pop up just as
others are still in the process of
being solved. Just two years ago
the world had to grapple with
soaring oil prices where almost
everyone and every country
suffered. Some are still suffering.
And just as the world is recover-
ing from that nightmare, a new
economic crisis the like of which
the world has not seen for almost
half a century dealt us a paralys-
ing blow by making millions
lose their jobs and other means
of earning a living.
Many of the talk-shops have
blamed human greed and the
worship of the new god called
market as the causes. And just
as many countries are falling
back on tourism as a way to
prop up their economy the
swine flu stopped people from
travelling. So for most countries,
their economy shrank with some
more than the others. Some
economies have not contracted
but they have not grown either.
In the US the ranks of the un-
employed has risen to six million
and in Europe the unemployment
rate is nearly 10%. To further add
to the gloom are disturbing news
of people being killed everyday in
conflicts that seem to continue to
defy solutions, conflicts that can
easily develop into major confla-
grations to threaten world peace.
Some of the major hot spots are
in the Middle East, Central Asia,
Afghanistan, Pakistan, Africa and
Northeast Asia.
And then there is the spectre
of climate change. Much of these
problems and suggestions for
their solutions are being dis-
cussed at the APR. One suggestion
made by Deputy Prime Minister
Tan Sri Muhyiddin Yassin when
opening the forum was for the
so-called “Anglo-Saxon model”
of minimum financial regulation
and maximum leverage needs to
be made more robust by better
regulation and more stringent
governance. It complements
what his boss, Prime Minister
Datuk Seri Najib Razak, said at
another forum in South Korea on
Monday that the global economic
crisis should “rekindle the debate
on the benefits of market forces
and the role of the regulators”.
For those at the APR and for
others at similar fora elsewhere
or in the future, there is certainly
merit in the suggestion for a criti-
cal re-examination of the ways
we do things as the environment
in which they were formulated
has changed drastically.

letters
letters@thesundaily.com

Moneylenders should go back to basics

THE prime minister should not be shocked
at the cruelty of the loan sharks in the latest
episode of their victimising loan defaulters,
“Najib shocked by Along’s cruelty” (May
29).
He also can be assured that if a loan shark
were to skin his victim alive and exhibit the
remains in a public square for everyone to
see, this would not deter the next person
who desperately needs money from going
to the very same loan shark to borrow the
amount he needs.
People will find the money for what they
need – the rich and the poor alike. Be it to
finance a business, to buy the latest designer
South handbag, to gamble or pay for the next fix, if
Korea, that is what one wants he will certainly find
the way to get it.
Asean If the banks are difficult, then the loan
sign free sharks will be waiting. But to be fair, loan
trade pact sharks should not be unduly vilified. Loan
sharks provide an essential social service
pg 15 and they were previously called money–
lenders. They helped many people with their
businesses and allowed them to survive and
prosper.
Money lending was a legitimate, respect-
able and profitable business. Moneylenders
of old lent money at the market interest
rate and did not harass debtors if they did
not pay up. Rather, they had a network that
made it almost impossible for a defaulter to
borrow anymore money until he paid the
outstanding loan.
Former moneylenders loved their busi-
ness and understood that if they wanted
to stay in business, they had to let others
stay in business, too. Consequently, they did
not take any action that would openly hurt
a borrower.
Eventually, moneylenders started to lose
the love of the business and forgot to play
by the code of ethics that governs all good
business. That’s when their name changed
from moneylenders to loan sharks.
The more you want money, the more it
eludes you. Any business must face at any
one time a number of customers who do not
pay up. A 5% to 10% default rate is normal
for most businesses, yet none of these busi-
nesses would spend a penny going after the
defaulting customers because they know it
will be of little use. Rather, the business will
concentrate on solving problems, providing
an even better service to its good custom-
ers, and also on finding new customers.
Businesses that do this are unlikely to fail
and will eventually be able to collect even
the money from the late payers.
I ask myself, why can’t those who lend
money operate in a similar manner? Why is
money different from any product or service
we need to buy?
A business cannot fine or impose ad-
ditional charges on its late payers, so why
should moneylenders inflate balances for
the simple reason that the borrower is
late paying and in this way make it ever
more difficult for the borrower to pay up?
Businesswise, this is a senseless course of
action. As we have seen, it spells the doom
of both the borrower and the lender.
If you have borrowed RM1,000 and
promised to pay back RM1,100, that’s how
much you owe. Whether you pay tomorrow,
next week, or next year, the amount is the
same. And if the lender has 100 customers
out of which 90 pay him on time, should he
focus on those who have paid or those who
defaulted?
It seems to me that loan sharks took a
cue from the banks and that’s what got them
in trouble. Interest is the price of money
and the rightful income of the lender. But
anything else, such as interest on overdue
interest and late payment charges, is usury
and the market will not sustain it, especially
in the present fast moving and highly volatile
economic environment. When moneylenders
operated by charging interest only, they had
a fine business going. But when they decided
that they would follow the template of the
banks and charge all the possible extras,
they started to experience a drop in their
collection rate.
How can a lender prosper when his main
preoccupation is to protect himself without
considering with equal care the interest of
the person he did business with and from
whom he hopes to get his profit?
Loan sharks should go back to basics
and make deals that work equally well for
themselves and for their customers instead
of trying to collect money that neither they
nor their customers have worked for.
Marisa Demori
Ipoh

Heavy cost of removing subsidies

I REFER to “Subsidies may go” (front page,
June 1). I am disturbed over the news and it
seem there’s nothing anyone can do about
the impending hike.
It seems the powers that be decided that
it’s too expensive to do anymore. So the
burden is passed off to the rakyat who are
already suffering the effects of a downturn.
Many are out of a job and looking for ways
to feed their families and coping the best
they can. Now this, one really questions the
timing which comes hot on the heels of the
proposed increase in transport costs.
Does the government spend a lot on the
rakyat as it claims? How come there are still
more and more poor? What about fiascos
like PKFZ, over-priced helicopters and other
failed projects and schemes, need I go on?
I wonder if this isn’t another way of robbing
Peter to pay Paul.
What irks me is that the people in high
places think that they can pull wool over
people’s eyes so easily.
It’s true, there maybe some unscrupulous
buyers from neighbouring countries buying
our subsidised goods and making a killing in
their countries. But can’t that problem be
solved by asking them to produce their ICs
and having stricter border controls? I hardly
think stopping the subsidy just because of
this is a valid reason. What about rice? We
are paying far too much when there has
been a drop in the price.
I disagree with the reason that subsidies
make the industries complacent and pamper
consumers and this subsequently distorts
the economy. We are paying the price to
line someone else’s pockets, a minority few
that wield the power. Monopolies like TNB,
Telekom and others are the ones profiting
from the average joe.
As for the rural poor, this excuse doesn’t
hold water anymore when urban dwellers
also find it hard to make ends meet. A man
earning RM1,500 a month in an urban area
cannot afford to feed himself let alone a wife
and two children. According to Domestic
Trade and Consumer Affairs Ministry secre-
tary-general Datuk Mohd Zain Mohd Dom, if
one wants better quality sugar, one should
pay more but for those who cannot afford
that, there will be other grades.
What if you had no choice but to choose
the lowest grade for your family, that would
be easier said than done. Does the govern-
ment want a repeat of the tainted milk
scandal that hit China? God forbid if some
unscrupulous manufacturer decides to do
so in Malaysia. Ministers and VIPs cannot
fathom the suffering of the rakyat, they are
living in their own world, of big houses, big
cars and overseas holidays every year.
Another folly is to create schemes and
more bureaucracy. The government should
be solid and transparent and careful in dis-
charging its duties. It must remember that
it was put in by the people and can be just
as easily removed. It is not a right to govern;
it is a privilege.
There must be more accountability in
the government, this is to prevent graft. If
measures are not taken, many middle-class
families and the hardcore poor will suffer.
I urge the government to reconsider
all the plans for hikes and to reduce toll,
electricity tariffs, phone charges and more.
Don’t just wax lyrical about understanding
our problems. Deal with it.
Teacher
Penang