It is undeniable that Malaysia has made significant progress since last year. Key economic indicators such as inflation rate, Gross Domestic Product (GDP), and unemployment rate. The current account position shows sterling improvements. Additionally, according to data from the Department of Statistics, Malaysia recorded its highest approved investment amount in history, amounting to RM329.5bil last year, which is 23% higher than in 2022. However, amidst these achievements, there is an intriguing phenomenon drawing widespread attention - the concerns and views of many Malaysians regarding the supposedly “increasing” cost of living.
Based on surveys conducted, a considerable number of Malaysians feel that their income in 2024 is insufficient to meet their daily basic needs. They also claim that the prices of essential goods such as food and rice, and services, have drastically increased. Although these are subjective views, they provide some insight into the real challenges faced by Malaysians in dealing with rising living costs, although they may not always be accurate.
Conversely, the government denies these views by affirming that they have taken the necessary steps to control this situation. For instance, the price monitoring of cooking oil, chicken, rice, and other essential items has been implemented more rigorously and frequently.
The government also issued reminders of the more acute conditions during previous administrations with prolonged critical issues such as insufficient supply of eggs and persistent expensive price of chicken during that time. While these are positive steps that should be acknowledged and commended, several Malaysians still opine that the reality still falls short in addressing the overall concerns of the people.
So, what is actually happening? Why do Malaysians still feel burdened by the increasing cost of living despite improvements in the country's key economic indicators? The answer may be more complex than we think.
One of the key factors that needs attention is the imbalance between economic growth and income distribution. Although the country's economy is growing rapidly, the benefits of this growth are not evenly felt across all segments of society. The growing income disparity between the upper and lower segments of society has weakened the purchasing power of the people, especially those in the middle- and lower-income brackets.
Therefore, what should the government do to address the perceptions and concerns of the people regarding the rising cost of living?
Firstly, it is crucial for the government to emphasise a more comprehensive and fair income distribution strategy. This can be achieved through the implementation of policies that provide financial assistance to those in great need, particularly low and moderate income earners. In fact, many middle-income groups, namely the M40, require more assistance compared to a small portion of the B40 group when considering family responsibilities, education expenditures, locality, and others.
Hence, the government's steps towards detailed and comprehensive income classification of the population should be supported by all Malaysians. One of the main strategies for obtaining data for this purpose is through the Main Data System (PADU).
PADU is not only developed for information for aid purposes but, more importantly, for targeted subsidy programmes, especially fuel subsidies, which are the government's largest expenditure for subsidies.
Additionally, other measures need to be taken to alleviate the financial pressure faced by the people. Initiatives such as tax reductions or increased subsidies on essential goods like food, fuel, and housing can have a positive impact on the people.
Furthermore, it is essential to strengthen the domestic economy more effectively, especially through technological transformation. This includes enhancing productivity in key sectors such as agriculture, industry and services. By improving efficiency and the ability to produce quality products and services, this will help stimulate comprehensive economic growth and, at the same time, benefit the people through job opportunities and additional income. Critically, reducing dependence on imported agricultural products such as rice, onions and others is crucial.
Indeed, among netizens and some politicians, there is intentional creation of negative perceptions about the prices of essential goods and services. Some deliberately purchase luxury items at higher prices and avoid local necessities like local rice. All of this is shared on social media to create unwarranted perceptions.
Undoubtedly, there are some retail stores and supermarkets that do not sell controlled items at appropriate prices and hide some essential items, such as packaged cooking oil and local rice. Therefore, more effective monitoring and actions by the authorities are crucial.
Apparently, clear and effective communication from the government is paramount. The public needs to be guided with accurate information about the measures taken by the government to lighten the financial pressure they are facing. This will help reduce confusion and increase public confidence in government efforts to address economic issues.
Consequently, despite some differences in perception between the public and the government regarding the actual economic situation, cooperation is essential to find the best solutions. Efficiency, fairness, and good communication are key to achieving sustainable progress in ensuring the well-being and sustainability of the Malaysian people.
DR HASROLEFFENDY HASSAN
Senior Lecturer-Finance
Faculty of Business and Management
Universiti Teknologi Mara, Kedah Branch
