You order from Grabfood, and upon delivery, you discover a missing item. Instinctively, you take a photo and send a complaint to Grab. But what if you find an extra dish you didn’t order instead? Do we rush to report this lucky oversight with the same urgency? This everyday dilemma mirrors a more significant ethical difficulty faced in business, particularly deregulation and regulation.
In Malaysia, a country wrestling with rising living costs and a crowded market of startups and graduates, businesses are in a relentless battle for survival. A common strategy for staying afloat? Offering discounts. It is a win-win: businesses attract customers while consumers save money.
However, regulatory bodies often impose “no discount” rules in professions such as law, architecture, engineering, and surveying, where ethical standards are paramount. For these professionals and businesses, navigating these regulations is like walking a tightrope between ethical practice and economic survival.
Business owners, especially those struggling to make ends meet, might see these regulations as an undue burden. To them, discounts aren’t just a strategy; they’re a lifeline to keep their businesses viable, pay their staff, and cover overheads, captured succinctly in the mantra: “Earn less, sustain more.” But this is where deregulation’s ethical and economic complexities come into sharp focus.
Advocates for deregulation argue that allowing businesses to compete on price drives innovation and lowers consumer costs in the long run.
Yet, this viewpoint must include a crucial downside: the potential for larger companies to use deep discounts to edge out smaller competitors, reducing market diversity and potentially leading to lower quality and ethical standards as businesses cut corners to stay competitive.
This brings us to the case of Malaysia’s deregulation efforts, such as the Financial Sector Master Plan (2001-2010) and the Financial Sector Blueprint (2011-2020). These initiatives aimed to enhance efficiency in the financial sector but also raised concerns about the stability and competitiveness of local institutions. A parallel can be drawn with the US Airline Deregulation Act of 1978, which, while lowering fares and boosting competition, also led to industry upheaval, bankruptcies, and safety concerns.
However, a notable success story is the liberalisation of Malaysia’s airline industry, which dramatically transformed air travel in the country. This deregulation ushered in the era of low-cost carriers, changing the market landscape entirely. The concept of “Now Everyone Can Fly” transitioned from a mere slogan to a tangible reality, making air travel more accessible and spurring growth in tourism and related sectors.
Deregulation, then, can be akin to unleashing a pack of wild dogs – it can overwhelm and outmanoeuvre the smaller players. The challenge lies in balancing effective regulation and overregulation, ensuring policies address real issues without stifling economic vitality.
Indeed, reforms in various sectors, such as the liberalisation of Malaysia’s oil and gas industries and the simplification of retail licensing, have highlighted the nuanced impacts of deregulation. Growth and innovation must be weighed against the need for consumer protection and fair market practices.
Targeted regulation, tailored to different sectors with stricter controls in areas impacting essential services, health, or safety, is crucial.
Navigating this complex terrain requires a nuanced approach that fosters healthy competition while protecting public interest and ensuring economic stability.
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