Inflation soars at 8.5% yoy: Barisan mismanagement and corruption not helping

Prices in August this year are nearly 9% more expensive than one year ago, according to the just-released Consumer Price Index (CPI). Our CPI has been at 8.5% for two consecutive months now. The last time Malaysia saw such high inflation was 27 years ago in Dec 1981.

Food prices alone are up nearly 12%, and transport costs have been rising rapidly too. In contrast, our southern neighbour Singapore saw its CPI moderate to a 6.4% hike in August.

High fuel and food prices are a global phenomenon, but it’s surprising that tiny Singapore, which has to import everything, is suffering less than oil and agriculture-rich Malaysia. Or is it?

Over here agriculture has been neglected while the Barisan chases high profile “development” projects like the Port Klang Free Zone scandal, dropping Protons on the north pole and sending a Malaysian into space (great headlines; but what’s been done since then to develop science and technology in Malaysia?). ….

Even worse, we have seen attempts that would have destroyed agriculture – for instance, the plan for a massive padi complex in Selangor that would have entailed building over the most productive padi fields in Malaysia. That plan was ultimately aborted … but how about moves to learn best practices from these farmers and propagate across Malaysia so we no longer have to import rice. No need for a MPs’ study tour to Taiwan … just send farmers from less productive areas to a tour in Sekinchan!

Besides producing food, transporting the food to the markets is a significant cost. Government policies here have deterred investment in efficient trucking and transport equipment. Real transport operators have to rent their licenses from connected parties who add no value besides their ability to get the licence. The recent Puspakom scandal is another example of how corruption increases the transporters’ cost of doing business. Yamin Vong of NST’s Cars, Bikes, Trucks has written extensively on these issues over the past months. Also check out “Much Soreness in the Transport Sector”.

Moving on to the subject of fuel. I agree that fuel prices should reflect global realities, but the impact on the people can be mitigated by efficient public transport. This, the Barisan government has failed to achieve in over 50 years of rule. Just yesterday, two LRT trains crashed, injuring 6 people. I use the LRT fairly regularly. It is not a nice ride – airconds sometimes don’t work in the mid-day sun, occasionally trains run late without explanation – just the generic announcements along the lines of “We apologise for the delay …

Everyday, the people risk their lives on poorly maintained and managed trains, buses and taxis while Barisan exco members enjoy their Mercedes cars. PM Abdullah promised way back in 2004 that savings from reducing fuel subsidies would go towards improving public transport. I have yet to see improvements. In fact, I see the reverse - increasingly crowded and dilapidated trains. How about less talk and massive plans and some implementation that we can actually feel on the ground?