July 4, 2022

Jihad Against Middleman:Does the PM Ismail Sabri Understand Basic Economics?

This is a stupid idea! We are living in a modern society and aspiring to be upper middle income nation where SERVICE (such as transportation and distribution) plays an increasingly important role in economic growth. We are not in stone age.

Imagine a farmer who plant bananas doesn’t want ‘Middleman’. He will then have to plant the bananas, harvest, packing, transporting and selling the bananas himself in the market. After he sold off the bananas (which hopefully have not rotten yet), he goes to plant again and repeat the cycle. The only guarantee for him is “poverty in perpetuity”!

He should rather focus in doing what he is best at, ie, plant bananas. By producing more bananas, he can make more money by allowing‘Middleman’ to deal with transportation, distribution and retail.

To avoid exploitation, government must ensure transparency in market and readily accessible‘Middleman’ for the farmers.

The ‘middleman’ can make money because market is INEFFICIENT either due to infrastructure/regulatory problems or lack of transparency in market.

Government’s role is not ‘jihad against middleman’ but to make policy or investment to improve market efficiency (upgrade rural roads, internet for data access, assist farmers in automation and plant better yield bananas). It can then allow the farmers and ‘middleman’ and everyone in the supply chain to make more money even though at lower retail price of bananas.

‘Jihad against Middleman’ is an idea by economic moron!

Dr Lee Boon Chye
MP Gopeng

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