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High prices and globalisation

Publication Date : 31-01-2014


Many describe the current situation in Malaysia as “hard times”, especially in view of the spiralling prices of food and other basic goods and services. I too believe that hard times are here, but our country is still one of great abundance.

Obviously, people must work harder to maintain or raise their standard of living, and many personal sacrifices will have to be made.

There have been suggestions from many quarters to counter the effects of price hikes. The government has unveiled austerity measures that will save the country some 400 million ringgit (US$119.5 million) a year, according to the chief secretary to the government, and the Federation of Chinese Associations Malaysia suggests that New Year festivities be cut drastically.

Everyone is chipping in ideas to help bring down wastage and unnecessary spending, which is indeed a welcome change. With the high economic growth we have had over the past 25 years (barring global crises and recessions), it is difficult for some of us to temper our extravagance and wasteful habits.

It is especially difficult for some living in high places to imagine what a “hard life” is really like. Some Malaysians have become rich very quickly and their lifestyles are there for all to see. This has created false expectations that wealth and comfort can be easily obtained or even made available by the government.

There have been unrealistic demands, such as asking the government to “create” more Malay millionaires and, in short, I think that many of the problems we face today are due in part to our inability to deal with the realities of economic change.

If we are to learn anything from our present circumstances, it’s that we need to be introspective, and we can start by understanding the causes for the rising cost of living while seeking realistic remedies.

First we need to recognise how globalisation can affect the prices of goods and services in ways beyond our control. The Prime Minister was not wrong when he said we should not always blame the government for price increases.

Imbalances in global supply and demand affect us all, and all the government can do is mitigate the resulting hardships. If, in the past, we had invested heavily in food production and not relied too much on imports, we might be better off today.

Changing our habits and lifestyles are things some of us can do to mitigate the present difficulties. Living within our means can be a character-building discipline for some. We do not need so many credit cards or to take loans for non-productive purposes. This is true at both the personal level and that of the government.

There are of course legitimate demands that the people must not be shy to ask for. For example, Malaysia must be in the Guinness Book of Records for having the most tolled roads. The people has good cause to ask that the government abolish some of these tolls.

The price of cars can certainly be reduced. Why are our cars more expensive than in Thailand, which doesn’t have a national car? As such, the public should not be allowed to take car loans of more than three years’ duration because most borrowers can’t afford the interest, no matter how attractive the deal is.

Long-term financial charges enrich only the financial institutions at the expense of the people. If we do not have to pay too much for cars – or better yet, if we can avoid driving at all because we have an effective public transport system – then we will have more to spend on our basic needs.

The livelihoods of ordinary Malaysians must take precedence in government economic, development and fiscal planning. Ordinary Malaysians do not need more tall buildings, high-speed luxury trains or world-class resorts.

Our comfort level is disproportionately high for some and yet non-existent for others, especially the hard-core urban and rural poor who have little or no access to affordable healthcare, quality education, housing and public transport.

Now is the time for our leaders to take the opportunity to change the economic landscape of Malaysia and at the same time, inculcate life-changing habits in our people. But how can this be done?

Globalisation has a huge impact on governments and people all over the world. The economic effects on the trade prices of goods and production costs are beyond borders. Malaysia will need more “people-centred policies” even if some of these are interpreted to be “protectionist”.

Overspending by both the government and the people must stop. We cannot change the habits and expectations of the people unless leaders set the example by making drastic changes to their own lifestyles as well as the administration of government.

More broadly, our country need not fully adopt economic models such as those prescribed by the World Bank or the International Monetary Fund. We need not be “industrialised” like Korea or Japan.

What is the point of emulating others or taking part in global wealth creation at our own expense? Globalisation and Wall Street have made one per cent of Americans super-wealthy but the rest of the United States is still trying to make ends meet. We must not be carried away with the promise of greater trade for the world when our own people are still living at subsistence levels.

In difficult times like these, it’s important to choose leaders wisely at various levels. This is particularly difficult in a democracy.

Democracy usually co-exists with mediocrity. Political meritocracy, or simply finding ways to elevate worthy and capable leaders, is urgently required.

Any political system that fails to elevate leaders of ability who can make morally informed political judgements will have difficulty coping with the intricate demands of globalisation. If leaders have a strong liking for wealth and extravagant living, for example, then they might not be suitable for a country such as ours where the segments of rural and urban poor are substantial.

We would be better off with Joko Widodo, the present Governor of Jakarta, or Chief Minister of New Delhi Arvind Kejriwal. Both are strong personalities who live simply and are passionate about working to reduce the hardships of ordinary citizens and the poor.

Both are apparently clean and incorruptible and come from ordinary families that never acquired wealth through political power. Such people, I believe, have a greater ability to empathise with the sufferings of the poor.

At moments like these, national change can really happen but the realities of living in economically challenging times must make us reflect on the nature of politics itself.

In a democracy, the people’s focus is not necessarily on important things. We often follow the opinions of others when deciding which issues are important and which are not.

In times of abundance and economic growth, the people have the luxury of engaging in polemics and political combat on trivial matters that do not really change their lives. They can afford to dabble in emotional issues that do nothing but hurt others.

In difficult times, however, real-life experiences require all of us to look hard at real issues: the cost and standard of living, education, the prices of goods, and much more.

This is what we must do. Now is the time for real politics, so let us not be distracted by non-issues.


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