Malaysia is a beautiful and exotic tropical country gifted with petroleum and natural gas reserves, especially in Terengganu, Sarawak, and Sabah. The hike of oil prices in the international market should bring cheers and joys to the Malaysian public. Ironically, it's not.
The general Malaysian public sees the price hike as a potential force to create another hole in their pocket. They pray hard so that the price hike can be halted and their living standard can be brought back to normal. To many, seems like the gravity is losing its control on the world most sought after commodity. Perhaps Isaac Newton should rewrite his theory.
At this moment, the average Malaysian really dig deep into their pocket in order to raise a family. Many have delayed their plan to get a new baby or to get marry. Prices for essential goods have increased a number of times even though the inflation rate published by the central bank of Malaysia shows only a single digit %, sometimes 3%, sometimes 4%, etc. Not sure whether those who calculated the CPI have ever visited a wet market or kedai runcit ?
As an oil producing country, any increse in oil price means extra income. It's a windfall gain !! The benefits of this gain should be pass down to the public, especially to the middle and lower income groups. Oil subsidy should not be a topic. Why subsidize if you can produce banana in your own backyard ? You can sell the banana to the locals at $1.10 per kg, and sell to the rest of the world at RM5 per kg. Either at RM1.10 per kg or RM5 per kg, you stand to make a profit as the cost of production won't have much variation.
A simple solution to the inflation pressure in Malaysia is to bring down the fuel price back to RM1.10 per litre level. With this measure, it will create a chain effect thru reduced production cost and transportation cost and ultimately the cost of goods sold in Malaysia.
I hope that the PM of Malaysia can appoint me as his layman think tank and I will deliver the cheers and joys back to the Malaysian.
Anak Penang, Anak Asia
1 comment:
Inflation due to high crude oil price is a global phenomenon. To reduce petrol price alone does not help to sustain the economic development.
Why?
Simply because the subsidies are huge which will further burden our prolonged budget deficits since 1997. By macroeconomic framework, increased of budget deficits (if over 5% of GDP) will enlarge the current account deficits, causing both the external and internal balances and hence the acceleration of foreign debts and the corrosion of a nation’s creditability in sustaining its’ competency.
But if Malaysia is to use petronas’ profit to reduce the burden of inflation, the negative impact will be slighter. Nonetheless, of the six world largest oil company, the financial status of Petronas is well known as the least transparent. We do not know evidently how UMNO ‘korek’ the petronas resources and we’ll soon become the net importer of oil by 2020, as estimated by the APEC.
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