PM Najib: Government will intervene if price mechanism fails

Prime Minister Dato’ Sri Mohd. Najib Tun Razak assured that the Federal Government would intervene if price mechanism fails, to ensure that goods and services especially pertaining to grocery and food items remain at the affordability of Malaysians.

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21 January 2014| last updated at 10:29AM

PM: Vital to reconstruct nation’s economy

By AZURA ABAS and KOI KYE LEE | news@nst.com.my
 2  8 Google +0  0 0 comments

PUTRAJAYA: Restructuring of the nation’s economy is vital as it would ensure a continuous and upward trend of growth.

Prime Minister Datuk Seri Najib Razak said if a reform of the economy was not made, the economic growth would remain stagnant.

For Malaysia to achieve its objective in becoming a developed nation by 2020 and a high income nation, Najib said the restructuring of economy was a must.

“If we do not do a restructure, the country’s economy will grow slower and we will not be able to achieve our objective which is to be a country with an advanced economy,” he added.

Najib, who is also the Finance Minister, attended the ministry’s first monthly assembly, earlier today.

He said that to achieve advanced economy, the country’s resources have to be managed efficiently and used productively.

Najib added the government would intervene if the current price mechanism has failed to function properly.

“The intervention will be done so that the people will not be burdened by the price hikes,” he said.

Prime Minister Datuk Seri Najib Razak delivers his speech at the Ministry of Finance’s first monthly assembly in Putrajaya. Pix by Mohd Fadli Hamzah

Read more: PM: Vital to reconstruct nation’s economy – Latest – New Straits Timeshttp://www.nst.com.my/latest/pm-vital-to-reconstruct-nation-s-economy-1.467258#ixzz2r0ZlqtDO

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The process of ‘intervention’ has already started. However, it is being addressed at source instead at end user.

Presently efforts are being made to address the specific issue that many Malaysians are complaining, the steep rise in grocery and food items of late. On Saturday, Minister of Agriculture and Agro-based Industry Dato’ Seri Ismail Sabri Yaacob announced that the price of raw paddy supplied by farmers to millers would be standardised to RM1,200 per metric ton.

Prior to this ruling, the price of raw paddy acquired by millers varied between states. As such, some millers started to buy at lower prices from farmers in the states and affected the supply from where the millers are based. The practice of cartel has been seen as ‘economically oppressing’ the famers.

When met in Ministry of Agriculture yesterday, Ismail questioned what are the Opposition led State Governments doing about the rising price of goods and services.

He noted that many of the city councils and local authorities in these states have been hiking up licenses, permits, quit rents and even rental of premises owned by the local authorities. As such, the cost is passed to the consumers.

Therefore in most of the urban areas, price of prepared food have been rising and affecting the fixed income earners, especially in the lower bracket and those elastically affected due to urban poverty.

He asked Opposition Leaders to make the rising price of goods and services lesser of a political issue and come together with the Federal Government to ensure that the well being of the rakyat comes first.

Published in: on January 21, 2014 at 13:00  Comments (6)  

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6 CommentsLeave a comment

  1. Ismail sabri is passing the bucks…..

    Stop whining and please do everything within your power as a federal minister coz thats yor job. Period.

  2. I have always wondered about the arcane workings of the forex market. Like why 1 US Dollar is worth 3.29 Ringgit or why 1 Singapore Dollar is worth 2.59 Ringgit?

    Is the Malaysian economy intrinsically weaker than the US economy or the Singapore economy?

    I don’t think so.

    Arguably, a “stronger” Ringgit will make our imports “cheaper” and our exports “dearer”.

    Will this benefit our economy and Malaysian consumers?

  3. Why bother about becoming an advanced economy with high income when the road leading to it is fraught with people’s misery? Isnt it better to review and revise things first and determine if 2020 target would seem realistic now. It is just 6 years away and if Malaysia is on track, the economic situation would not be like what it is now. The restructuring of the economy ala IMF which the govt is doing will result in low economic growths in the next few years i.e if it grows at all. A friend of mine working in a transport company has been retrenched recently. Retrenchment will happen sooner or later in a big way. Once companies cannot absorb high cost of production , they will downsize and retrench. It will lead to more miseries. The national economic advisers probably dont read the economic crises in Latin American countries in the 1970s and 1980s and they probably look at the IMF useless messures without a thought for Keynes and other alternatives. The one million dollar question is , with the severe belt tightening measures imposed by the govt and if the economy doesnt grow in the next 3 years or so, will the nation achieve high income and advanced economic status? The govt can only hope with no guarantee of results. Restrucring ala IMF will not show positive results for years and during those years the hardest hit are ordinary low and middle income groups. How I wish the national economic advisers are people au fait with macro and micro ecomomics and au fait with various economic models.

    • Krugman, perhaps, as opposed to Samuelson?

      It’s good to know that your preferred modus operandi involves unlimited and unrestricted deficit financing.

      So, will Bank Negara go on a Ringgit printing spree a la the US Fed and the Bank of Japan?

      And will there be foreigners lining up to lend money to Malaysia without demanding hefty interest rates?

      Of course, you can always run up the debt now, and leave it to the future generations to pay off the debt plus interest!

      • Malaysia adopted an unorthodox method of resolving the 1997-98 Asian financial crisis because its PM has the mettle of a real leader and dared defied the IMF way of doing things, That’s what a leader should do. If the leader follows blindly the IMF template in resolving a serious debt problem then why need a politician? Why not appoint a disciple of IMF from IMF to be Malaysia’s leader. Whether to print more money, debt refinancing and foreign borrowings or not are decisions that should allow room for the human factor. A weak leader enamoured with free market capitalism will balk at these ideas or is easily panicked by the numbers crunch in front of him. The methods employed by the govt now is fiscally squeezing the people to fill its coffers emptied by its own wastage , reduction in public expenditure that could well have generated economic growths, and credit squeezing the system till money is accessible only to those who already have the money and prefer to let the rest go under. Why dont the govt increase corporate taxes, reduce the list of tax goodies for foreign investments that have no direct benefits to the local jobs and expertise. The taxpayers money is sucked dry by these type of foreign investors. Yes if the leader has the political will, why not print more money and used Keynesian style to spur public sector spending that generate employment and growth. Money these days are commodity backed so as long as economic activities are not stifled there’ll be growth. What the govt is doing now is stifling growth through fiscal method and monetary method. Double whammy which can only be done by leaders and decision makers who were either born with a silver spoon or have no expertise in managing a debt crisis situation.

  4. Restructuring, transformation, blue ocean, economic growth, high income bla bla bla….

    Show us the results please.

    Oh sorry! There was one actually. The extraordinarily high income of his step son.


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