Tuesday, July 8, 2008

Brilliant Story About Malaysia Subsidy..by Indra Sakti

A Brilliantly Told Story about "Subsidies" Malaysian-Style

A man called Maha owns a farm which can produce 10 apples every day.
He has 5 workers to operate the farm. Each of them eats 1 apple daily
and it is enough to keep them operating the farm normally.

As for the remaining 4 apples, the landlord sells them at RM10 each
and he earns RM40. He uses the RM25 to improve the farm operation and
facilities. He gives RM2.00 to each of his workers and he keeps the
remaining RM5.00 as profit.

Day by day, the farm gets increasingly well developed and all of the 5
workers are happy with the money they can save.

When Maha passed away and there is a new landlord, Abdul comes to
continue the farm operation. He says to the workers, "We need to
improve the farm quality and redefine our way of thinking."

"So from now on, all of you only need to pay RM1.00 for each apple you
eat. It is very cheap as the price is RM10 each outside the farm."

The workers have no choice but to pay RM1.00 for the apple they eat
daily. Their earnings decreased from RM2.00 to RM1.00 per person.

As usual, Abdul sells the 4 apples and he gets RM40. He uses RM25 for
farm improvement and pays RM10 to his 5 workers. He gets RM5.00 as
profit. On top of that, he gets another RM5.00 from the apples that he
sells to his workers. In total, he gets RM10 as profit every day.

Soon, the apple price increases to RM20 each. The new landlord gets a
higher profit as he gets RM80 for the 4 apples he sells daily. Then,
he decides to give the farming improvement contract to one of his
close friend, Samy.

Samy says, "Apple cost naik, improvement costs also misti naik."

So, the farm improvement cost increases from RM25 to RM50. In actual
fact, the improvement only cost RM30. The remaining RM20, Abdul and
Samy share evenly among themselves.




Let's calculate how much Abdul actually gets daily:

RM10 (from farm improvement cost)
RM20 (Net profit from selling 4 apples = [Gross profit, RM80] -
[Improvement cost, RM50] - [Wages RM10] = RM20)
RM5 (from selling apples to his workers)

In total, Abdul gets RM35 daily compare to RM10 initially when he
takes over the farm from Maha. His profit increases RM25 and the
workers are still getting RM1.00 daily per person.

However the greedy and heartless Abdul does not want to stop there.

One day, he says to his fellow workers, "You see, ah, the current
market price for one apple is RM20 and you are only paying RM1."

"See how lucky all of you are! I have to SUBSIDISE RM19.00 for each of
the apples you buy and in total, I actually need to SUBSIDISE to the
tune of RM95.00."

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