Economics Local

Putting the rising cost of living into perspective

cost of living

Syndicated News
Written by Syndicated News

KUALA LUMPUR, Oct 26 2017 : Consumer groups concur that the rising cost of living that has become a huge concern of the majority of the people, particularly those in the B40 and M40 groups, should not be viewed as a mere Malaysian phenomenon. 

They agree that it is a challenging global phenomenon also faced by other countries around the world.

Consumers Association of Subang and Shah Alam (CASSA) president Datuk Dr Jacob George said: “It is not fair to solely blame the government for the rising cost of living and harping on it because many other countries in this region and the rest of the world are facing the same problem.

“The only difference is the rate of the increase of the cost of living among countries. In some countries, it is rocketing while in others it is rising steadily,” he told Bernama. 

George said that at an international conference in South Korea recently, his peers had also voiced their concern over the issue, with some saying that the cost of living in their countries had shot up by 40 to 50 per cent.  

The latest figures of the Statistics Department show that there is an overall increase in the Consumer Price Index (CPI), at the rate of 3.7 per cent to 119.9 in August this year from 115.6 in the corresponding month of the preceding year. 

Among the recorded increases are the indices for transport (+11.7 per cent), food and non-alcoholic beverages (+4.3 per cent) and housing, water, electricity, gas and other fuels (+2.4 per cent).

The index subsequently rose to 4.3 per cent in September, influenced by fuel and food prices while it is expected to moderate in the coming months. 

Federation of Malaysian Consumers Associations (Fomca) president Prof Datuk Dr Marimuthu Nadason said the situation was made worse by the fact that Malaysia is importing many food products and necessities to meet demand. 

He noted that the prices of imported foodstuff are also influenced by the exchange rate of trading and the supply of goods from the source countries.

“Malaysia is not a food producer country and we have to import essentially every kind of foodstuff, from rice to shallots and vegetables and even meat and fish,” he said, adding that a shortage of supply due to, for example, calamities in the source country would also drive up the price. 

However, Marimuthu said, it cannot also be denied that consumers themselves lack the understanding of many issues and this results in an unrealistic expectation which leads to frustration and anger when the expectations are not met.  

“Many consumers misunderstand prices – they believe that the government plays a significant role in price determination in the market. They also lack the understanding of the role of consumers themselves in facing the current situation.

“Consumers often blame the government when prices go up; not understanding that prices of goods and services are determined substantially by the market,” he said. 

Marimuthu said that to face these challenging times, consumers need to understand the workings of the market; how the market works, how prices are determined and the limitations of the government role in determining market prices.

He said consumers also must realise that they are not helpless or victims of the market as they can make choices in managing their consumption and expenditure.

“Through their purchasing patterns, to some extent at least, they can influence the market,” he said. 

Meanwhile, George also suggested that it is timely for the government to form a special task force consisting of all stakeholders to check and address this pressing issue, holistically.

He said this included reviewing the whole distribution network and cutting off unnecessary parties such as middlemen and third-party service providers who will only increase the prices of the product and burden the end-users.  

He also suggested that the people learn to budget based on their income and make that a habit. 

“You budget for essential things and also for non-essential things. That way, you can manage and control your expenses,” he said.  – Bernama

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