Dear Prime Minister, I think I am getting tired of commenting on your economic policies, including the latest measures to reduce the cost of living. However for the sake of the rakyat, I am appealing to you to reconsider what you have just announced.
These measures are just plain silly and devoid of any logic. How we end up doing the same thing over and over again and expecting different results is simply beyond comprehension.
What do 1Malaysia People’s Shops, 1Malaysia Textile Shops, 1Malaysia Book Shops and eateries offering 1Malaysia Menu have in common? Are they operated by more efficient businessmen? Can they source their merchandise from wholesalers and suppliers at lower costs? Are they more altruistic by being more willing to make lower margins and lesser profits? Are they able to pay lower rentals or lower wages to their workers? If they are not, just how can they sell their merchandise at lower prices to help rein in the escalating cost of living?
Unless all 1Malaysia shops/eateries are subsidised, I don’t see how they are able to compete more effectively than other business outlets already in existence. If government sponsorship and subsidises are involved, then it is back to square one – we are effectively committing more government finances and introducing more distortions into our economy.
With all due respect, I do not think this is the way to run a market economy the basic elements of which are competition and allowing market forces of demand and supply to work.
Instead of introducing more “state sponsored” businesses and committing more subsidies, the government should actually do the opposite i.e. dismantle distortions and monopolies, reduce state sponsored enterprises and make business environments more competitive. Allowing enterprises to enter and exit the market with ease would assist “water finding its own level”. Too many restrictions, monopolies, licensing and controls only help “privileged” businessmen exploit consumers by reaping abnormal profits.
To me, setting up more 1Malaysia People’s Shops, 1Malaysia Textile Shops, 1Malaysia Book Shops and offering 1Malaysia Menus to manage the cost of living, are “Ah Beng” economics devoid of substance and economic rationality.
The performance of an economy is based on sound macroeconomic policies, not micro managing shops or lunch menus. If macroeconomic policies are appropriately formulated and applied, all “economic units” – shops, eateries, hotels, massage spas, housing developers, transport operators and consumers will gravitate toward mutually beneficial relationships.
Ultimately, the real substance is how we manage inflation and taxes, preserve the value of the ringgit, grow and sustain real wages, and control asset prices and their effect on home ownership et cetera. How can a RM200/month allowance help houseowners when asset prices have reached the stratosphere and when public housing programmes are almost non-existent in the country?
Dear Prime Minister, let me give you a pointer: Singapore is a very expensive city with a high cost of living, but for S$5.00, one can get a decent meal in a relatively clean environment. And for housing, everyone qualified will eventually get a clean decent HDB flat. Maybe you would like to find out how they manage to do that. One thing is certain, Singapore does not have subsidised shops and eateries offering special 1Singapore menus. It pays for you to learn from them because the PAP government just received almost 70 per cent of the popular vote despite its long reign over Singapore – similar to Umno in Malaysia.
By the way, why do you need RM20 billion to boost the stock market? If indeed there are undervalued stocks, we should let the market work it out. Who is to determine which stock is undervalued? Who are you trying to help really? Government knows best again?
TK CHUA