The Aftermath of Relying on Nationwide Subsidies

The Aftermath of Relying on Nationwide Subsidies

Over the past ten years, I have traveled abroad more frequently, especially to Western countries in the past seven years. In recent years, I have visited Europe several times a year. Beyond enjoying the scenery and food, I have been especially interested in studying their history, economy, culture, and society. I often observe their historic architectural styles and speak with locals. From their historical artifacts, architecture, culture, and the political and economic systems of earlier times, it is evident that these peoples were once great civilizations. Nearly every Western country has a history it can be proud of. Even today, many Westerners retain a strong sense of cultural pride, knowing that their ancestors built their national identity through sacrifice and hard work.

Public education, stock exchanges, banking systems, universities, and research institutes were first established in Western countries. During the Kangxi era of the Qing Dynasty (late 17th to early 18th century), the Netherlands had already established the world’s first stock exchange in 1602, and in 1863, London opened the world’s first subway system. In the 18th century, the British steam engine drove the First Industrial Revolution. Western civilization also produced many great inventors, including Albert Einstein, Alexander Graham Bell, the Wright brothers, Thomas Edison, Nikola Tesla, and Karl Benz, who invented the first gasoline-powered automobile. These pioneers collectively shaped today’s Western civilization and its iconic cities. During that era, subsidy policies did not yet exist.

However, today many Western countries are gradually being caught up by Eastern nations. Although they have not been overtaken yet, the gap has significantly narrowed. Over the past few decades, many Asian countries have risen rapidly from
the Third World into developing economies. Yet moving from a “developing country” to a “developed country” remains extremely difficult. Many developing nations fall into this political trap at this stage and find it hard to break free. Those who observe closely will notice that this challenge has troubled developing nations for decades.

So, what exactly is this “political trap”? One key factor is excessive subsidies. “Excessive subsidies” refer to subsidies that do not generate productivity. Productive subsidies, such as scholarships requiring graduates to serve the country, contribute back to society. Non-productive subsidies include overly generous fuel subsidies, lifestyle allowances, and benefits that do not create economic value.

Excessive subsidies weaken national development and competitiveness by creating dependency and reducing motivation. Over time, while Western societies continued to advance materially, some left-leaning politicians prioritized political interests and neglected the cultural values of hard work and resilience established by their ancestors. These irresponsible political leaders have led certain groups to rely on subsidies, causing productivity to decline and economies to stagnate. To remain developed nations, governments must encourage citizens to maintain the hardworking spirit of earlier generations rather than allow political groups to misuse the concept of “rights” in ways that undermine social resilience.

For example, Hong Kong is known as the Pearl of the Orient and has long held a position as a global financial center. This foundation was established during the British administration through sound and effective policies rather than heavy subsidies. The prosperity Hong Kong enjoys today was built through the intelligence and hard work of its people. To illustrate this, we can use a simple microeconomic example:

Family A has seven members—grandparents, parents, and three children. The parents earn an income, and the children also work and contribute to supporting the grandparents. Such a family is harmonious, financially stable, and respected by others, as it demonstrates responsibility and cooperation across generations.

In contrast, Family B has the same structure, and the parents also work. However, the three children refuse to work and rely only on their parents for financial support, which is equivalent to excessive subsidies. This places a heavy burden on the parents, who must support all seven members alone. Economically, such a family cannot build savings; instead, it faces stress, imbalance, and long-term instability. From a macroeconomic perspective, a country that provides excessive subsidies resembles Family B.

To become a strong nation, one must not rely too heavily on subsidies. Otherwise, it will cause other nations to look down on your country and people, just like the situation of Family B.

Today’s Western nations must rise again and reclaim their national spirit, living up to the sacrifices and efforts of their ancestors. At the same time, they must not rely excessively on subsidies, nor should they continue to depend on a national direction dominated by left-leaning policies and irresponsible political leaders.

Eastern countries must also not become complacent, otherwise they will fall into the same political trap and fail to progress from developing nations to developed ones.

I strongly believe that if Malaysia can free itself from the influence of a small number of extreme and self-serving leaders, our country has the full potential to become a great nation.