|
TRIPOLI - FOR Senior Minister Goh Chok Tong, the most important takeaway from his four-day visit to Libya this week had nothing to do with memorandums of understanding or other cooperation agreements.
It was the simple message: A welfare state and subsidies will lead a nation to ruin.
And he heard it from none other than Libya's socialist leader for 38 years, Colonel Muammar Gaddafi.
Speaking to reporters before flying home on Thursday, Mr Goh said: 'For me the most important lesson is the affirmation of what we already know - that a welfare state and subsidies will lead Singapore to ruin.'
Libya lavished subsidies on its people because it had enormous oil wealth, he noted. But despite that, its people wanted more.
'Gaddafi himself told me the people are not happy. They want more and more...(He's come to the point where he acknowledges the system) is not working,' said Mr Goh.
The difficult task facing the Libyan leader now is how to remove, whether partially or totally, the 'many heavy subsidies', he added.
In Libya, education and health care are free. Petrol costs 10 US cents (14 Singapore cents) a litre, 'way below market rates'. When a Libyan gets married, the government provides the couple a flat about the size of a three-room flat in Singapore.
One option the Libyan leader is considering, said Mr Goh, is to use a portion of the country's reserves to give cash transfers to the people, and move from there to a market economy.
The reasoning: It is better to give cash - 'they can spend it, save it or invest it' - than to give subsidies, as they lead to 'wastage, abuse and distortions of the economy'.
This, noted Mr Goh, may sound very familiar to Singaporeans, as it has echoes of Singapore's policy of preferring cash handouts to price subsidies.
'For me, coming to a country with so much oil wealth, saying that heavy subsidies is wrong...that is a very important lesson for us,' said Mr Goh.
He added: 'We must never make the mistake of changing our own policy and going the other way, of giving more subsidies to people.
'Even when we give out cash to people, in terms of growth dividends for example, (we already see people saying) this is not enough.
'At some stage I will have to tell the Prime Minister - please be careful, it's never enough. We must find a formula that will ensure we don't go down that route (of ruining the nation).'
Mr Goh was in Libya to strengthen bilateral ties and explore opportunities for economic cooperation.
He was the second minister to visit the country after diplomatic ties were established in 2006. Foreign Minister George Yeo visited Libya last year.
Colonel Gaddafi took power in a socialist coup in 1969, 10 years after oil was discovered in Libya.
Sanctions imposed by the United Nations in 1991 kept the country in isolation until 2003, when the country renounced its nuclear wea-
pons programme and rejoined the international community.
leehoong@sph.com.sg
|
