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Long term solution

  • While controlling goods prices may momentarily relieve the burden of Malaysians, the government must strive to boost the incomes of the people as a long-term strategy for the future.

Sin Chew Daily

The 14th general election is just around the corner.

Although nomination is still about two weeks away and the official campaign period has yet to begin, political parties have already started their election wars.

In addition to the election manifestos, the two rival camps have also made a score of other pledges aimed at wooing the voters.

Domestic trade, co-operatives and consumerism minister Datuk Seri Hamzah Zainudin pointed out recently that if BN were to win the election, he would guarantee that the prices of five daily necessities such as rice, flour, gas, cooking oil and sugar would not be increased.

According to Hamzah, PM Najib was concerned about the needs of the people and had promised to keep the prices of these five items unchanged.

It is indeed a good thing for the government to be concerned about the financial woes of the rakyat. This shows the government has realized that escalating goods prices in recent years have put tremendous pressure on the shoulders of the people.

We cannot deny that the country's macroscopic economic data have been pretty encouraging of late, with GDP expanding at better-than-anticipated 5.9% in 2017, and between 5.5% and 6% this year.

Unfortunately, the robust economic figures have not been reflected in the income growth of Malaysians in general. The stagnant wage growth has paled in comparison to the rapid rise in goods prices.

Against the backdrop of skyrocketing goods prices, the pledge to keep the prices of daily necessities unchanged (if BN continues to rule) will most definitely be a welcome relief to many. The question is, how is the government going to make sure the prices of these items will not increase? So far there has been no further explanation from the authorities.

Malaysia has yet to achieve self sufficiency in food supplies, and has to rely heavily on imported food items to meet the market demands. Under such circumstances, it is not easy for the government to control food prices.

As we are all aware, goods prices are determined by the supply-demand equation in a free market, as prices constantly fluctuate in tandem with demand.

To prevent goods prices from rising further, it is necessary for the government to adopt some intervention measures, one of which being subsidies to cap rising prices.

The cost of subsidy policy is extremely high, and this is going to tax the national coffers heavily and is never a good strategy to adopt.

We gave too many subsidies in the past, including fuel subsidies, but discovered later that such a policy involved an exorbitant cost before reversing the policy.

Does the government's pledge to keep prices steady mean it is prepared to revert to the old way, or that the government has some new tactics or solutions to achieve the goal?

While controlling goods prices may momentarily relieve the burden of Malaysians, the government must strive to boost the incomes of the people as a long-term strategy for the future.

 

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