IN LIGHT of the ringgit’s daily decline, an MCA Youth leader has called for the government to step out of its indifference and not simply sit idly by as the severe depreciation of the ringgit affects companies and citizens at all levels.
MCA Youth secretary-general Saw Yee Fung said the government must engage with economic experts if necessary for concrete solutions if the ministers and their deputies tasked with expanding the economy and finance are lacking in their performances.
“The Malaysia Madani government must quickly formulate policies and strategies to halt the ringgit’s freefall and restore public and international confidence in our economy and national stability,” Saw said in a statement.
“It would not be in public interest if Bank Negara Malaysia (BNM) were to raise the overnight policy rate (OPR) as higher interest rates translates to increased expenses and reduced spending capacity.
“Nevertheless, the government can introduce policies to alleviate or arrest this dilemma.”
Saw noted that in the short term, the most direct effects of the ringgit plunging are the jump in the prices of imported goods, alongside the increase in costs for overseas studies and accommodation.
“Coupled with the approaching SST spike in March 2024, Malaysians are staring at another round of foreseeable inflation,” she added.
Sharp rise in food essentials
Saw said as Malaysia still relies on imported food, the nation’s dependence on imported agricultural products jumped 13.7% from 1987–2015 while imported food in 2020 reached RM55.5 bil.
As such, it is incumbent on the government to take the appropriate measures to mitigate the sharp rise in food essentials.
“Additionally, with the SST flight for logistics coupled with the ringgit sinking, the cost of many imported products and food stuffs will soar correspondingly. Consumers, especially those from the B40 and M40 households will be the ones bearing the biggest brunt,” Saw remarked.
“The government needs to confront this problem directly. Identify how imports on people’s daily essentials can be reduced, and provide targeted subsidies to minimise the impact of inflation on the rakyat’s wellbeing, especially in areas of logistics and food.
“For the long term, the government needs to resolve Malaysia’s structural problems and uncover new strategies to attract more foreign investment through policies and strengthening the ringgit, rather than leaving all responsibility to BNM.”
According to Saw, Malaysians are staring at real economic issues daily and it is not sufficient to expect the masses to rely on verbal responses from the government.
She said Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, needs to execute policies that will revitalise the economy and prevent election campaign promises from being relegated to mere empty tin cans.
“As an immediate measure to control the impending inflation snowballs, MCA Youth proposes that the government suspends its scheduled SST climb to 8% this March,” she stressed.
“Just as how the Finance Ministry yielded to public uproar by reversing its earlier notice to traditional and complementary medicine practitioners that an 8% SST will be imposed on traditional and complementary medicine (TCM) services, the government should also consider positively this recommendation by MCA Youth to exempt the logistics sector from the 8% SST adjustment.” – Feb 23, 2024
Main pic credit: Unsplash
