IT has been a taxing last few months for Malaysians. 

Barely out of the pandemic, we were first hit by a few waves of inflation, devaluation of the ringgit, an increase in our overnight policy rate, which resulted in food shortages, large hikes in prices of everything from cooking oil to e-hailing fare. 

The narrative of the government, however, remains that “all is well”. 

In response to criticism over failure to attract new investments against the backdrop of car manufacturers and IT companies leaving for our neighbours, especially when contrasted against the successes of Indonesia and Singapore in attracting high value, popular investments like Tesla and Amazon, government media outlets reported “interests” by some parties in investing in us while “touring” company facilities without the presence of significant organisational leaders or shareholders. 

Malaysians are repeatedly given painfully obvious answers that offer neither value nor solution, like the shortage of chicken is due to high consumption, or an increase in the price of cooking oil is due to a shortage of the item. 

It seems that our mechanism of response is centred around subsidies and aid. 

Every time we face a problem, the solution seems to be to throw money at the most affected. 

The reality, however, is much trickier to solve. 

For starters, the subsidies in place benefit those who do not need them, the most. 

For example, fuel subsidies for RON95 benefit those with bigger tanks and more vehicles, rather than smaller vehicles driven by the B40 group.  

Similarly, the B40 pay proportionately more in terms of banking interests for their vehicles. 

Subsidies for food items are implemented across the board, where, again, those who can afford to buy more, benefit more. 

Finance Minister Tengku Zafrul Tengku Abdul Aziz has said for every RM1 of fuel subsidy, 53 sen benefited the T20 group while only 15 sen benefited the B40.

Not only is this patently unfair, it stymies the potential reach for ringgit spent. Half of the RM30 billion spent on subsidies last year was on the T20. 

Subsidy distribution is only half the problem. 

Opportunities for creation of wealth, particularly to empower and lift the poor out of poverty, is getting limited, while the rich capitalise on the economic situation by basement bargain properties, stock and equities. 

The lower income group is turning more and more to stop-gap measures such as home-based entrepreneurship, gig jobs and temporary employment while employers are moving to less formal work arrangements, particularly in industries like hotel and tourism. 

The gap between rich and poor would widen – the clearest indicator would be calls to “widen” the B40 group to B60.  

The affected group would find it more difficult to accept corporate bailouts, fat salaries for a select few and tax breaks while their struggle to make ends meet grows more. 

The government needs to do more to ensure equitable transfer of wealth, creation of value jobs, proper trickle down of the economy and a strong, capable, local workforce to fully take advantage of any foreign investment in our country. 

The disconnect between purported investments and government spending on economic stimulus needs to be reconciled and money spent needs to translate into sustainable, recursive economic activity capable of growth and expansion. 

Non-value adding activity needs to be weeded out and growing our strengths on a few high potential, high yield areas of expertise and industries is a step we need to take, urgently, as the world braces itself for more economic uncertainty and as economic and trade opportunities grow more aggressively competitive and increasingly complex. 

Politicking aside, there are lessons to be learnt from Sri Lanka and other countries, that economies do crash, governments do fail and that countries that are not careful, despite resources and machinery, if not managed properly, can collapse. – May 25, 2022.

* Emmanuel Joseph firmly believes that Klang is the best place on Earth, and that motivated people can do far more good than any leader with motive.