Oil wealth: Blessing or curse?

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When Tengku Razaleigh started Petronas in 1974, little did he realise he would live to see the day he would wish the country had not discovered its oil bounty.

Our nation is blessed with a modest quantity of oil reserves. As a young nation coming to terms with this natural bounty in the early 1970’s, our primary thought was to conserve that oil. That is why, when Petronas was formed, we instituted the Petroleum Development Council. Its function was to advise the PM on how to conserve that oil and use it judicially for national development. We knew our reserves would not last long.

We saw our oil reserves as an unearned bounty that would provide the money for modernization and technology. We saw our oil within a developmental perspective. Our struggle then, was to make the leap from an economy based on commodities and low cost assembly and manufacture to a more diverse, economy based on high income jobs.

Aware that we had an insufficient tax base to make the capital investments needed to make the leap, we planned to apply oil royalties to what you would call today strategic investments in human capital. whatever money left after making cash payments, allocations for development funds, etc, was to be placed in a Heritage Fund for the future. The Heritage Fund was for education and social enrichment.

In working out the distribution of oil between the states, who had sovereign rights over it, and the Federal government, we were guided by concerns for equity between all Malaysians, a concern to develop the poorer states (who also happened to be the oil rich states) and a concern for inter-generational equity. That oil was for special development purposes and it was not just meant for our generation.

Sabah and Sarawak joined Malaya to form Malaysia because of the promise of development funds. Yet today, despite being their massive resources, they are some of our poorest states.

Instead of being our ace up the sleeve, however, our oil wealth became in effect a swag of money used to fund the government’s operational expenditure, to bail out failing companies, buy arms, build grandiose cities in the middle of nowhere. Instead of helping eradicate poverty in the poorest states, our oil wealth came to be channelled into our political and politically linked class. Instead of being the patrimony of all Malaysians, and for our children, it is used as a giant slush fund that has propped up authoritarian rule, eroded constitutional democracy and corrupted our entire political and business class.

Our oil receipts, instead of being applied in the manner we planned upon the formation of Petronas, that is, according to its original developmental purpose, became a fund for the whims and fancy of whoever ran the country, without any accountability.

The oil that was meant to spur our transition to a more humane, educated society has instead become a narcotic that provides economic quick fixes and hollow symbols such as the Petronas Towers. Our oil wealth was meant to help us foster Malaysians capable of building the Twin Towers than hire foreigners to build them, a practice in which we preceded Dubai. I would rather have good government than grand government buildings filled with a demoralized civil service.

It is no wonder that we are no longer productive, no longer using our ingenuity to devise ways to improve ourselves and leap forward.

Malaysia is now an “oil curse” country.**

When I started Petronas in 1974, I did not realise I would see the day when I would wish we had not uncovered such bounty.

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Per Kurowski

Face it, there is no such thing as an oil-cursed politicians, oil-cursed governments or oil cursed policymakers, on the contrary they are all most often shining examples of oil blessings… there are only oil-cursed citizens.

http://www.bit.ly/P4m

Eleanor oil

It runs in 14 + years and ps we will become a net importer of oil in 2-3 years: Check the FB account …

kannukaran

What a blunder, a scam 2005, an interlude in the middle of 336b debts,economics downfall etc etc. Here she come with the ultimate story for the world to know and the kind of gimmick for them to worry most, all the time, a reflections of their own forgotten, well hidden scams. A scrab from a crony mentality……we can get it from the MSM.

.

indeed the oil has been a dreadful curse compounded by ketuanan melayu which specializes in being frivolous.

Phua Kai Lit
wandererAUS

A blessing to UMNO elites and curse to the rakyat…..
oil a national resource has not gone to the people…only to a handful “Ketuanan Melayu”.Inflation doubled and wages stay stagnant! Surely this cannot be a blessing!

amoker

What is Fatimah trying to say here. ?! Please write up your own allegations in your own blog as we could not read your mind.

On Petronas, it is bleeding money and did well in Iraq. The other GLCs are much worst. the bailout of water concession company by PAAB will give millions to cronies for their mismanagement.

Fatimah Zuhri

amoker,

1. the reason you dont understand is because Anil have truncated the comments.

2. give anil some time to investigate the claims i put forth.

3. once he has done his investigation i am sure he will show the entire comments and you and the rest will understand it better

cheers

daniel

It is sad but true. I can hardly find a profitable “company” in Malaysia. One of all the “best companies” is MRCB and shocking finding is that the company hardly making any profit.

Monopoly companies like SYABAS (Selangor Water work) and TNB are heading into difficulty and want to increase tariff. Many people “fall sick” to get a good service in SYABAS or TNB. The attitude of their staff is terrible.

So, what we can expect from the distribution of the wealth?

I think the management of the nation’s wealth should be by a reliable and qualify person.

reflections

The oil was a blessing. It is having the likes of Dr. M as our leaders that is the curse.

All through the 70s, 80s and 90s, all the countries in ASEAN except the Philippines, enjoyed tremendous economic progress.

Malaysia would also have progressed, if not more, with or without Dr. M. The often crediting of Dr. M with the modernisation of the country is a load of rubbish.

If anything, (his administration, during which corruption flourished) actually held back our progress with his racists policies with the above unemployable graduates being one of his legacies.

MyBlog

Well resources must always be considered scarce and used rationally especially natural resources that will run out someday.

Nothing can be done now, it is like crying over spill milk or my favourite saying, bullet has left the gun, no point regretting now. But since there are many more bullets left, maybe we can save some of these. And the key is GE13

nkkhoo

Most important asset for a country is the brain power. Even Malay with the right brain also emigrated to USA, my ex-Malay lady boss is one of them.

anna brella

Oil wealth = Blessing

But,

UMNO/BN greed + corruption + incompetence = CURSE!

“Imagine Power To The People” John Lennon.

wandererAUS

“WEALTH IS THE ROOT TO ALL EVILS…..”

YOU WILL WITNESS A “DOG EATS DOG’ SCENARIO!

K S Ong

The article has more credibility coming from Tengku Razaleigh, the original architect of Petronas.

To my simple mind, the story is similar to some irresponsible children inheriting wealth and just squander on status symbols and patronizing high-end entertainment outlets. Where the current expenditure exceeds current income, it is only a matter of time before the capital will be finished.

Andrew I

The whims and fancy of whoever ran the country. Now I wonder who that could be. Credibility. Are you serious? Doesn’t seem like it’s coming from the mouth of babes to me. Try sourcing the archives of the “virgin” Star, pre-1987.

BN robbers

I disagreed with T.R. Oil is not a curse. The curse is … M and his gang….

Unfortunately the (plunder) continues… If Malaysia has no BN robbers, we will still be better than Singapore, Taiwan, South Korea with ZERO oil and gas.

john

hearing this from the mouth of UMNO makes me wanna puke.

it’s like “my younglings, we are now delivering you a broken country. please start your work to clean up our mess. meanwhile, we will continue the lootings.”

he has no right to say those words. he’s telling me what 90% of my generation already know. it’s what he is doing about it that i want to hear.

Fatimah Zuhri

Dear Anil,

Have you heard? Latest screw up in Penang…LOL

1. It seems there is a chap name S… was (allegedly) involved in a SCAM in 2005.

2. He scam not businessman but teenagers!

3. Link to The Star Report

http://tinyurl.com/yccfcuw

MyBlog

What are you talking about, the news report is about a flying school operator scam in Seremban.

Is this one more disinformation crony?

What has this got do with Penang?

Yang

And what has this got to do with the current subject

Fatimah Zuhri

Hi Anil,

1. I understand why you have to truncated more than half of my comments but I hope once you have gather all the evidences, could you please show the entire comment back.

cheers.

ps : Check his FB account …

http://www.facebook.com/profile.php?id=100000214804270&ref=nf#/profile.php?id=1116120558&ref=mf

Fatimah Zuhri

Bro,

More pics …

1. Picture of Shannon …

http://tinypic.com/r/14s8lu/6

2. Picture of Shannon…

http://tinypic.com/r/2vs53k0/6

3. Picture of Shannon…

http://tinypic.com/r/t8905x/6

romerz

It runs out in 14+ years and we become a net oil importer in 2-3 years. I haven’t factored in the new Iraqi contracts with Shell but I’m pretty sure it came with a price. http://romerz.blogspot.com/2009/08/malaysias-oil-1426-years-left.html Anyway Malaysians, be prepared for the worst heading our way, with less subsidies and the inevitable GST which will only tax the poor more! Stop being complacent and “bark up the wrong tree’. What we see today will be gone in a flash unless we can come together and make things right by making the right choices! Ask yourself this simple question. UMNO/BN is… Read more »

nkkhoo

Many people with the right brain already knew in many years ago that oil money is supporting Malaysia from sinking. Malaysia total debts is 336 billion.(I found this figure from the Bank Negara’s website.) China, Taiwan, Hong Kong and Singapore are oil importing countries, still they can keep their accounts in black. I do not want to be racist, but I have to stress that (the Chinese) do not spend money like no tomorrow as our UMNO-led Malay government. As an Indonesian minister said it right, “God is blessing Indonesia (and also Malaysia) with a plenty of natural resources, but… Read more »