“We are not immune to economic collapse just by virtue of having some oil reserves, and Government plans such as the ETP and the GTP”

By A Different Spin

By Sheila Stanley
Sep 10, 2011

Many have started feeling the pinch of inflation

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We notice it in the every day purchases we make.

The properties we cannot afford, the groceries we buy, the medical expenses we are faced with, the clothes, shoes and just about everything else we purchase.

A friend of mine, who now lives in Germany, has her own quaint way to measure it. She tracks the price of a certain well-known brand of toothpaste.

I am writing about inflation. Is anyone else as conscious and as worried about the rising cost of living in Malaysia as I am? I’m betting there are, judging from the number of friends and colleagues who feel the pinch of inflation in Malaysia.

It does not help that we are such a consumerist culture. Malaysians turn to retail therapy as a quick anti-depressant fix-it.

Before the spectacular collapse of the Irish economy in 2008, Dublin was one of the most expensive cities to live in.

Property prices were ridiculously high, groceries were expensive — so expensive that many Dubliners would take a two hour drive to the Northern Irish border to purchase cheaper groceries available in British supermarkets — and clothes, shoes and just about everything else were cheaper a transatlantic flight away in New York.

Having lived through this, I live in fear of it happening in Malaysia. We are not immune to economic collapse just by virtue of having some oil reserves, and Government plans such as the Economic Transformation Programme and the Government Transformation Programme.

The most recent reported inflation rate for Malaysia is 3.1 per cent in July 2011. From 2005 until 2010, the average inflation rate in Malaysia was 2.77 percent. It reached a historical high of 8.50 per cent in July 2008 and a record low of -2.40 percent in July 2009.

The term “inflation rate” refers to a general rise in prices measured against a standard level of purchasing power. The most well-known measures of Inflation are the CPI (Consumer Price Index) which measures consumer prices, and the GDP (Gross Domestic Product) deflator, which measures inflation in the whole of the domestic economy.

For the average consumer, we look at the basic necessities as our yardstick to measure inflation. We talk about rising food prices.

Well, did you know that Malaysia now spends about RM13bil each year importing food and produce like fish, meat, rice, potatoes, fruits and vegetables?

There is a massive amount of cash flowing out of the country so we can buy basic vegetables like chillies, cabbage and choi sum.

When was the last time you walked into a supermarket and noted that the chillies you were throwing into your shopping trolley were an import from Thailand? My last time was over the weekend.

I am just another member of the growing middle class in Malaysia who have a demand for food. And my demand, like most of yours, is for a wide variety of food.

It covers a spectrum which includes what we would understand as both local and international food products. So we look for our Thai fragrant rice, Japanese rice, Basmathi rice, and of course our very own homegrown Malaysian rice.

We yearn for durians all year long, and we find certain species of non-Malaysian durians more flavoursome than homegrown varieties. We love rice, but we also love all sorts of potatoes from around the world and pasta.

Here’s the thing. If Malaysians made more of an effort in the area of agriculture, especially in terms of commercial food farming, then there will be less of a need for us to get our chillies from Thailand.

But farming, either on a small scale or a large one, is not viewed as an ideal income earner here.

IT, oil and gas, construction, engineering and the medical and legal professions are attracting more people.

When was the last time you met someone whose ambition was to be farmer? If anything, children of farming families aspire to get out of it.

And then there’s the fuel subsidies, which from all indications out there are set to stop sometime in the very near future. When that happens, there is no doubt there will be a sharp spike in inflation. The price of toothpaste will increase because the cost of transporting the toothpaste will.

We use more energy ¬— iPads and iPhones require charging.

So I wonder how much of inflation is down to us as consumers? What can we do to reduce its impact in our lives?

Write to me with any suggestions you may have. In my next column, I will be listing the top suggestions for all to read, and perhaps even practise. I know I want to have some element of control of the price of the toothpaste I buy.

Like most Malaysians, Sheila Stanley has dependents she buys food, energy and fuel for. You can e-mail her your ideas on how you reduce the impact of inflation in your life to sheila106@live.ie