HOW determined is our government in tackling the rising cost of living among Malaysians? 

If rhetoric and sloganeering is the measuring stick, we are most enthusiastic.  

If policies leading to actual improvement in quality of life is the barometer, much is left to be desired then. 

It is unbelievable that the best our government can do in the face of rising living costs, partially contributed by their own removal of subsidies, is to assemble a committee to look into it, and to declare a “jihad” campaign against inflation. 

Are we even admitting we have a problem? 

Prime Minister Ismail Sabri Yaakob repeatedly referred to our inflation rate as 2.8%, which refers to the consumer price index (CPI).  

The CPI calculates core and non-core inflation, which includes many items – communication, transport, recreation and so on. Of the amount, some 30% is allocated to food not including alcohol and tobacco products. That 30% comprises some 184 food items including vegetables, poultry, seasonings, rice and so on.

Of that amount, cooking oil, listed under “fats and oils”, accounts for just some 0.5%. In contrast, the “food not elsewhere classified” – meant to cover things like canned soup and honey, is given a 0.9 weightage, almost double that of cooking oil, butter and margarine.  

Outside of food, it also calculates non-essentials like clothes, which not only are rarely purchased by a household, but also have a tendency of having a negative inflation, which helps bring down the total inflation average. 

The figure is only 0.42% higher than last year’s, inferring that we are more or less 17% affected. The reality, however, is that household bills are almost double what they used to be. 

The 2.8% figure quoted is hardly a reflection of the actual additional burden felt by consumers, especially the economically vulnerable.  

They bear the biggest brunt as this group is least likely to have savings to buffer the impact of volatile prices.

Many hotel employees, for example, who have yet to be absorbed into the full-time workforce, are still casual workers lacking employment security or benefits. Some are still taking pay cuts.

Many affected businesses are still struggling to find their footing and many are experiencing management change.  

Rising interest rates are expected to make it even harder for this group, especially those struggling to hold on to what little property they have, as this would only increase their monthly instalments, without the benefit of being offset, at least in part, by increased savings interest that they may not even enjoy. 

The old playbook of making things appear okay may not work this time.  

Populist, stop-gap measures were a key factor behind the downfall of the Najib administration, and for some reason or other, many of the Keluarga Malaysia initiatives to mitigate the economic hardship are mere “1Malaysia” programmes rebranded – Jualan Keluarga Malaysia, Menu Keluarga Malaysia, Bantuan Keluarga Malaysia. Like Najib’s popular handouts, the Keluarga Malaysia initiatives do not address the root cause of economic hardship – lack of quality jobs, lack of investments, skyrocketing prices, dependence on foreign suppliers and labour and so on. 

Granted, inflation is a global phenomenon, but not all countries suffer equally.

Countries like Indonesia and Thailand have dramatically stepped up efforts on food security, while Singapore focused on increasing their citizen’s income levels, which is triple Malaysia’s, adjusted for purchasing power parity. Some countries, like Vietnam, managed to do both.  

In contrast, Malaysia’s salaries have remained largely stagnant. This poses a double risk for Malaysians – lower or dropping income levels make it difficult for citizens to better insulate themselves from economic volatility, and lower purchasing power helps accelerate stagflation, which we are experiencing now.

Meanwhile, our politicians avoid addressing this topic, rather choosing to indulge in the usual safe and galvanising topics like race, religion, language and so on.

We cannot afford any more political shenanigans, recycled rhetoric and bad policies, if we are to come out of this as a nation.

Our economy needs to stop subsidising our politics. – July 6, 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.