Monday, July 25, 2011

BN could bear brunt of voter anger over rising costs

July 25, 2011
Azhar, 45, a personal driver at a local corporation, picks out grapes at Econsave after work. He goes grocery shopping with his wife at various supermarkets and occasionally uses discount coupons found in newspapers. Although he feels that his monthly expenditure has gone up by between 5 and 10 per cent in the past year, his salary has remained stagnant.

KUALA LUMPUR, July 25 — The rising cost of living could hit the rulingBarisan Nasional (BN) government hard in the next polls as Malaysians,especially urbanites, face falling living standards as they struggle with stagnant incomes and soaring inflation.

A street poll of 100 city dwellers by The Malaysian Insider conducted in and around Kuala Lumpur had 44 per cent of people surveyed blaming the government for the rising cost of living as compared with 41 per cent attributing it to global factors and only 5 per cent blaming it on business owners.

Putrajaya announced last week that the rate of inflation in Malaysia rose to 3.5 per cent in June from the same month the previous year. The inflation rate in May 2011 was 3.3 per cent, still below the government’s acceptable rate of 5.0 per cent.

The Najib administration has not said when it will call snap polls but Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday told Umno party members to prepare as elections could be held anytime soon before the government’s mandate expires in 2013.

Of the 86 people surveyed who were registered voters, 40 said that the cost of living was likely to affect how they voted as compared with 31 who said otherwise. Fifteen said it would be a neutral factor.

Retiree Rohani Saad, 57, said she believed voting in an election was the only way she could voice her discontent over the rising costs of living. “If the government says harga tak naik, harga tentu naik (the price will not go up, prices will definitely go up),” said Rohani, who lives on her savings.

Even though Rohani is frugal, spending less than RM100 a week on groceries for herself and her husband, she still feels financially worse off this year. Even the relatively well off are feeling poorer now due to inflation.

An office manager who wanted to be known only as Anne, said the government should monitor prices, especially necessities such as food, to help Malaysians keep their cost of living at bay.

Although the combined income of Anne and her husband is more than RM10,000 a month, she said she had to cut down on buying fish because of its high price.

“We love eating fish, but that’s also where we feel the pinch,” she said.

Despite rosy projections of economic expansion under the Najib administration’s reforms and transformation programmes, it has yet to be felt by the public as prices, especially in urban areas, have raced ahead of income growth. This was reflected in the responses in the street poll.

Some 34 per cent of people polled felt financially worse off in the past one year while 43 per cent felt no change. Only 23 per cent felt better off.

And while the official inflation rate last year was 2.2 per cent and projected to be between 3-4 per cent this year, most residents felt that the real cost of living had accelerated much faster. Thirty-six per cent said costs had gone up between 5-10 per cent in the past one year, 26 per cent said it had gone up more than 10 per cent. Thirty-eight per cent saying it had gone up between 0 and 5 per cent.

“Life here is getting worse,” said Choong, 40, a restaurant proprietor in Subang Jaya.

The mother of four said Malaysians had to pay a lot for necessities, compared with other countries such as England. On top of higher household expenditure, she added that her restaurant’s business was dwindling as former customers cut down on eating out due to rising food costs.

But some people disagreed with Choong’s assertions, saying that Malaysians were relatively better off than those overseas.

“Malaysians who have never lived abroad do not know how fortunate they are to have everything back home,” said Muhammad Zafran Kadir, a communications manager from Subang Jaya.

“Despite popular belief, Malaysia is one of the lowest cities in terms of cost of living,” he said. “When I was in Australia, I had to fork out AUD400 (RM1,280) a week for rent. If it were not for a government loan, I wouldn’t have survived.”

Analysts nevertheless have warned that the cost of living and the state of the economy will be a key election issue.

“Cost of living is always a serious issue for the government when it comes to elections,” said James Chin, a political analyst at Monash University Malaysia. “In hard economic times, the government is in trouble.”

Chief executive of the Institute for Democracy and Economic Affairs (IDEAS), Wan Saiful Wan Jan, said that the cost of living was the most palpable issue to the public.

“How the economy is faring will play a significant role in how voting takes place,” he said.

Wan said that Prime Minister Datuk Seri Najib Razak now faces some tough choices as he is caught in a dilemma between trying to cut subsidies as part of fiscal reforms to help balance the government budget but which could at the same time worsen price pressures.

He noted that the introduction of the New Economic Policy (NEP) by Tun Abdul Razak in 1970, which aimed to restructure society, had relied heavily on government intervention and subsidies, creating a subsidy culture in the country that would be difficult for Najib to overcome.

“How can Najib tell the public that subsidies are not sustainable?” said Wan Saiful. “He can’t say that his father was wrong about NEP.

“It is very unfortunate to be the government at this time,” he added.

But while Pakatan Rakyat has been gaining political mileage from the subsidy cuts and their impact on cost of living, Wan Saiful, who is a member of PAS, called the opposition’s approach populist and irresponsible.

Lee says he shops at supermarkets to get the cheapest deal. He says business has been going downhill since last year due to high food prices.
He said that as with the current government, Pakatan Rakyat would not be able to sustain subsidies for long, and that former finance minister and now opposition leader Datuk Seri Anwar Ibrahim should know better than to go against subsidy rationalisation.

“The opposition will only postpone the problem. Reducing subsidy is a cold hard truth that Malaysians will have to deal with,” Wan Saiful said, adding that the Najib administration’s plan in easing the public into real market prices should be supported.

But while politicians fight to win votes, the voters themselves have grown cynical as they feel their votes are only courted during elections but do not count for much in reality.

A hawker who wants to be known as Lee said that in all his years as a voter, he did not feel like he changed a thing when he cast a vote.

At 70, Lee has voted in many elections, and feels disheartened that his plea for a better life is not heard.

He adds that he is getting fewer customers by the day as more people opt to eat at home.

“I don’t know where everybody went,” he lamented.

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