LETTER | One of the most contested issues in GE14 was the economy. Since September 2017, the former government under BN kept saying that Malaysia's economy was good based mainly on these three things:
1. A 5.7% GDP growth in Jan-June 2017.
2. Ranked 23rd in World Economic Forum’s Competitiveness Report.
3) A 6.6% increase in median salary from 2014-2016.
I was not convinced that these data represented the actual economic reality experienced by Malaysians. To measure economic reality based on this data is not only a distortion but also leads to the implementation of wrong policies.
In order to find out other indicators that better represent our economic reality, I looked into the following ten areas:
1. Inflation rate from January 2014 to June 2017.
2. Estimate inflation rate in this region for 2017.
3. A survey on cost of living done in August 2017, involving 604 respondents around Peninsular Malaysia.
4. Currency exchange rate from January 2014 to June 2017.
5. Trend of total spending via credit card.
6. Trend of late payment of outstanding credit card bills.
7. Total loans disbursed by banks to all sectors.
8. Total loans disbursed by banks for households or domestic consumption.
9. Amount of loans that cannot be repaid in full or in part.
10. Amount of household loans that cannot be repaid in full or in part.
Based on these 10 items, my findings established the following:
1. Malaysians on average are paid 16% lesser in 2017 than 2014. Which means we needed at least a16% salary increment to maintain our expenses. Therefore, a 6.6% increase in median salary was just not enough. Malaysia became more expensive to live in.
2. The Employees Provident Fund (EPF), although it rose by RM102 billion, lost monetary value of US$22 billion from 2014 to 2016. Retirees became poorer. This has affected the elderly the most, and by extension increased the financial burden of their providers such as their children.
3. Through devaluation of the ringgit alone, every Malaysian’s wealth has significantly reduced.
4. The 5.7% GDP increase from January to June 2017 is not a sign that the economy is progressing, but the result of increased spending through debt and loans.
In summary, the acute rising cost of living was real and BN has misread, misrepresented and thus mismanaged the economy. As we now know, this has cost them their right to govern.
As the new Prime Minister Dr Mahathir Mohamad has stated, the new government under Pakatan Harapan will establish a ministry of economy.
I hope this ministry will pay attention to data in a more comprehensive manner, in contrast to the former government, to get an accurate reading of our economic condition.
Only then, can we have policies that increase the ringgit's value, reduces loans and strengthens the economy.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.