Charles Santiago

Posted by : Unknown | Khamis, 27 Oktober 2011 | Published in

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Charles Santiago

Charles Santiago : ” Malaysian wages have not increased to keep up with the rising cost of living”

Posted: 27 Oct 2011 10:52 PM PDT

Source: Selangor Times

inflation: When the general level of prices for goods and services rise, and, subsequently, purchasing power falls.

By Alvin Yap

Homemaker Ann Looi budgets RM1,500 at the start of every month to purchase food and other items.

The 35-year-old housewife and mother of two, however, finds it increasingly difficult to get by with less than RM2,000 to place food on the table every month for her family of four.

The Johor Baru native does not care about keeping up with her neighbours’ life-style,explaining that she has her hands full keeping up with dearer food prices.

Families in urban centres are finding it hard to get by on the wages levels that have stagnated for a few years now, says the part-time dressmaker.

Economists and comsumer groups like the Federation of Malaysian Consumers Associations (Fomca) say that middle-income groups in urban centres are being hit hard by stagnant wages and increased living costs.

Inflation,they say,is as certain as death and taxes.

But what is inflation? Economists define it as the rate at which the general level of prices for goods and services rise, and, subsequently, purchasing power falls.

” Inflation is a general increase in the prices of items so that we buy less with our money compared to a time, say, five years ago”, explains lawmakers Charles Santiago,who says that Malaysian wages have not increased to keep up with the rising cost of living.

The Klang MP explains that as prices increase for items, each ringgit unit buys fewer goods and even services.

Consequently, the former economics and finance lecturer points out that inflation reflects a ” lowering” of purchasing power of money.

He explains that an increase in inflation means that the ability of our ringgit to buy specific quantities is lessened.

Giving an example, Santiago says that in 2000, RM10 could buy three chickens,while the same unit of money today can only get the shopper one and a half chickens.

To put it another way, he says a prospective car buyer would have to fork out, for example, RM50,000 to buy a compact-sized car this year, when it was only RM47,000 last year.

The first term MP explains that price increases are a burden to every worker whose salary is not only fixed but also stagnated.

Malaysian are getting a raw deal, he points out, as inflation is exercerbated by wage levels that have stayed flat over the years.

“Increasingly, business are passing on the costs of goods to consumers whose wages are the same as it was 10 to 15 years ago”, says Santiago, a trained economist.

He says economists unflatteringly call inflation the ” Big Squeeze”, and the description, while unsophisticated, is quite apt.

Families, he explains, are facing the burnt of rising costs of living, with wage increases nowhere near enough to keep up with dearer goods and services.

Santiago, who heads a non-governmental organisation think tank, says that families ” feel the squeeze” when they fill the fuel tank in their car, or when they go shopping for clothes, food, or when they pay their utility bills.

What causes inflation?

Santiago says supply and demand- that is a greater demand for items will push prices up due to limited availability- can no longer account for a marked increase in prices.

He takes the most essential item -food- to illustrate how inflation is no longer solely caused by supply and demand, but by external factors.

Santiago says the public at large does not know that food prices globally have skyrocketed due to climate change, monopoly on food production, and agriculture policy that is weighed towards producing cash crops.

” Firstly, climate change is destroying land that is suitable for agriculture. There is less arable, fertile land for planting paddy, wheat and other staple food source”, Santiago explains.

He says monopolies and cartels are also selling essential food items like rice, wheat and soy at higher prices to maximise profits.

International agriculture corporations,Santiago says, have put profits ahead of feeding ” a hungry world”, as they, instead of governments- who should do more to eradicate hunger and poverty-determine the prices.

In Malaysia, the problem of ballooning food prices is due to dependence on food imports as agriculture is slanted towards producing cash crops like oil palm and rubber.

” We are net importers of rice, vegetables and other staple food ingredients as we don’t produce sufficient amounts”, Santiago says, adding that Malaysians are at the mercy of foreign food producers and their profits-oriented prices.

A reduction in our food import bill, he says, can only be addressed by a return to food-producing agriculture.

Fomca says middle-income and lower-income families are increasingly in debt due to outstanding payments incurred from paying for essential items such as food, petrol and utility bills.

According to the centre’s research and policy advisory committee, inflation touched 3.3% in August 201, making essential items dearer to purchases.

According to Fomca’s Datuk Paul Selvaraj, households now use more than a third of their income just to purchases food, fill the car with petrol, and pay electricity and water bills.

” In Some households, families are using half of their income to pay off debts incurred from mortgages, rental, car ownership and food purchases,” says the consumer advocacy group’s chief executive officer.

Selvaraj says it is alarming to note that inflation, among other things, has caused households to spend more to purchase essential items.

According to Bank Negara’s Annual report 2010, household debt at the end of 2010 was RM581 billion, or 76% of Gross Domestic Product (GDP).

Selvaraj says the figure is worrying, as it signals that households are using as much as half of their incomes to pay off debts.

According to the central bank’s statistics, the Malaysian household debt service ratio was 39.1% in 2006, rose to 49% in 2009, and dropped slightly to 47.8% in 2010.

” This means that after paying off the debt there is not much left to spend on education, and especially during medical emergencies and savings,” he says, adding that homes will find it hard to make ends meet if breadwinners fall sick or lose their jobs.

” That is the issue with inflation. It affects everyone, especially wage earners and households.” says Selvaraj.

He says the federal government should do more to ensure that basic items such like food, petrol, telecommunications and transportation charges do not rise too much due to inflation and profiteering.

A nuclear family of four, Selvaraj says, spends a lot on food, adding that petrol and transportation costs also factor in household spending.

Fomca updates its weekly record of prices for essential items, and Selvaraj notes that a whole dressed chicken now costs RM6.70/Kg at hypermarkets, while green vegetable s cost around RM1.50/kg.

Selvaraj says consumer groups like Fomca want to educate and inform the average consumer to spend wisely.

Like Santiago, he acknowledges that market forces of a global nature are driving prices up. He urges the public to do their part in spending wisely.

Selvaraj says prices were ” very much influenced by external factors”, but nonetheless wants the people to play their role in facing inflation.

He says the short to medium-term plan is to educate the public on sustainable purchases, explaining that people have to practise an economical way of life and strive to be frugal.

However, the government should not adicate its responsibility to protect the poorest from the burden of price increases.

He says the government needs to take action, including using the Price Control Act and Anti-Profiteering Act, to curd profiteering.

Recently, he called on the government to take stern action against traders who raise food prices following last month’s increases in egg price by two sen.

Fomca and other  advocacy groups, notably the Malaysian Trades Union Congress (MTUC) -Which speaks out on workers and wage issues-have said the government must do more to tackle inflation.

Selavaraj says the 2012 Budget tabled recently in Parliament chose to continue with subsidies, as their removal would hit the middle and lower income groups the hardest.

He points out that rising inflation cannot be kept at bay, and the government should implement a wage floor of RM1500 so that the public can cope with living costs.

A response to Datuk Seri Nazri Aziz — The Teoh family

Posted: 27 Oct 2011 07:08 AM PDT

OCT 27 — We, the family members of Teoh Beng Hock, are deeply hurt by the statement of Nazri, Minister in the Prime Minister's Department, that until today, no action has been taken against the three responsible MACC officers. More than 27 months, or 833 days, have passed since Beng Hock was found dead on the rooftop of a building adjacent to the MACC office. We have been waiting every single day for the truth to be revealed.

The RCI report clearly pointed out the three MACC officers, ie Mohd Anuar Isamil (investigation officer) "the bully"; Mohd Ashraf Mohd Yunus (assistant investigation officer) "the abuser"; and Hishammuddin Hashim (former deputy director of MACC Selangor) "the arrogant leader", were involved in using inappropriate violence. However, three months after the report was published, the MACC set up another "special task force" to investigate the three MACC officers fingered by the RCI, indicating that the government remains suspicious and sceptical of the report.

Setting aside the question about the appropriateness and fairness of having MACC lead the special task force investigating their own officers, what we do not understand is until today, why the government still thinks the RCI report does not carry enough evidence for commencing action against these officers who have abused their power, but spends more public funds to conduct another round of investigation. We want to know then, on what basis that we, the grieving family members of the deceased, were asked to accept the findings stated in the RCI report, that Beng Hock died of forced suicide?

Who allowed this dubious "force suicide" to happen? Why have the culprits been left off the hook while we are forced to accept a conclusion that reveals no truth? Why are the MACC and government giving us the impression that there is a great reluctance on their part to take action against those MACC officers?

If Nazri himself does not accept the findings of this report, why are we requested to accept the conclusion of this report then? Why impose such soul-destroying double standards upon us? Why can the government choose not to believe but we are not allowed to refute the conclusion of that report?

If this is really being played out, isn't then the creation of the RCI merely a waste of time and public funds as well as taking the grieving family members for a ride?

The inaction of the government not only casts serious doubt on the credibility of the RCI report but also represents a slap in the face for Tan Sri Datuk Seri James Foong Cheng Yuen, the chairman of RCI.

From the coroner's court till the RCI, we can see endless foot-dragging manoeuvres by the government and denial of the quest for truth. Our grief does not diminish over time, but our burning desire to seek the truth continues to grow. It is painfully clear that when a person uses a lame explanation to cover another, there is great reason to believe that there is great impropriety.

The truth is already embedded in everyone's mind.

But as the family members of the deceased, we are force to, and only empowered to pose the following questions to the government:

1.       If there is insufficient evidence, how come the RCI, proclaimed as an independent party, was not authorised to investigate further?

Following Nazri's doubts about the report and throwing this hot potato to Home Minister Hishammuddin Hussein, and the Inspector General of Police, we request these authorities to be accountable to the family members and the general public by announcing their investigation procedures, timelines and persons leading the investigation.

2.       According to Nazri, the special investigation task force has already submitted a report akin to a disciplinary report to the MACC complaints committee.

We wish to ask: what are the contents of the report? When is it going to be made public so that we, the family members and general public, can obtain an explanation?

3.       According to Nazri, if there is a need to initiate a criminal indictment, the police need to reopen investigations into Beng Hock's death.

We wish to ask: do the police have the inclination to reopen a file on Beng Hock's death? If the answer is no, does it mean the police are reluctant to seek the truth? If they are willing to reopen a file on this matter, we wish to know when they intend to do so and when the investigation can be completed? We, the family members, have waited for 27 months and we beg for an answer now.

4.       It is evident from the RCI report that police did not conduct a proper investigation when Beng Hock died in 2009. If Nazri is throwing this hot potato to the Internal Affairs Minister, police, MACC, then who is supposed to lead the investigation and from whom should we seek answers from? If the incompetence of the government resulted in Beng Hock's death, is our request for a proper explanation of his death an excessive demand?

This is the Teoh family's email response to Datuk Seri Nazri Aziz's recent statement.

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