Press Release
The latest inflation statistics released by Bank Negara Malaysia[1] for the first four months of 2011 (up to April 2011) is alarming. I am particularly concerned with the prices for food and non-alcoholic beverages that saw a 4.9% increase for the period January to April 2011 when compared to a similar period in 2010.
If this pattern persists for the remainder of the year, 2011 will register the second highest food price increase for the people to bear since 2006. This will repeat the pain of 2008 when food prices increased by 8.8% due to a sudden hike in petrol and fuel prices.
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011* | |
| Food price increase | 3.4% | 3.0% | 8.8% | 4.1% | 2.4% | 4.9% |
Table 1:
Food price increase was highest in 2008 due to petrol and fuel price hike; the similar trend is expected to repeat this year (*2011 is an estimate)
Food prices in Malaysia increase at more than twice the rate of global food prices in the first four months of 2011. A comparison of consumer price index (CPI) for global food prices published by United Nation’s Food and Agricultural Organisation (FAO) against BNM’s statistics foretells the economic misery that will affect millions of ordinary Malaysians if the Federal Government is reckless in its subsidy rationalisation program:
| Jan 2011 | Feb 2011 | Mar 2011 | Apr 2011 | % increase Jan – Apr | |
| CPI for food and non-alcoholic beverages (Source: BNM) | 102.6 | 103.7 | 103.7 | 104.0 | 1.4% |
| Monthly Food Price Index
(Source: FAO)[2] |
230.7 | 237.2 | 231.0 | 232.1 | 0.6% |
Table 2:
Malaysia’s food price increases at more than twice the rate of global food price increase
There is a direct correlation between haphazard removal of subsidies that affects the majority of Malaysians and the persistent food price increases registered in the first four months of the year.
Furthermore, the moral and social justification for offloading more financial burden to the public to solve the Federal Government’s budget deficit is weak; when the main excesses and wastages that led to the budget deficit in the first place are left untouched. The rakyat will find it hard to swallow the reality that they have to shoulder the responsibility for a decade’s worth of Barisan Nasional’s economic mismanagement especially when they know the tycoons and cronies who benefitted most from the largess of the past decade are left unpunished.
Pakatan Rakyat has outlined a clear set of steps to be taken in order to reduce the national budget deficit without overly burdening the rakyatin its Buku Jingga. This includes the removal of the RM19 billion corporate subsidies given to the elite and well connected companies including the Independent Power Producers (IPPs) and instituting an effective war against corruption to prevent an estimated RM28 billion leak and wastages suffered by the Federal Government each year (as concluded from the 2008 Auditor General’s Report). Continue reading
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