Living costs soaring globally, but Najib vows help to Malaysians

By Shannon Teoh

August 11, 2011

KUALA LUMPUR, Aug 11 — Datuk Seri Najib Razak has told Malaysians to “face the fact” that rising cost of living is a global trend as the country continues to grapple with surging inflation.

Although the prime minister promised to help ease the burden of rising prices on the public, he said “Malaysians must face the fact that world prices are unlikely to return to the levels of five years ago.”

File photo of fish on sale at a market in Kuala Lumpur. People are finding it difficult coping with the rising prices of many things, including fish.

“We are not the only ones faced with this problem, and we are certainly not the worst affected. We will devise the best strategies to ease the rakyat’s burden while managing the country’s economic development,” he wrote on his blog in the 1 Malaysia website.

Promising to continue subsidies which are already among the highest in the world, Najib said that Budget 2012, to be tabled in October, would focus on managing inflation as per the administration’s new National Key Results Area on cost of living.

“The government will continue to provide subsidies for daily travel, meals and health bills,” he wrote.

Public concern over price hikes has been heightened further as Putrajaya raised the price of fuel, sugar and electricity in June, a move it said was necessary to avoid the subsidy bill from doubling to RM21 billion.

The Najib administration has committed itself to trim 2009’s two-decade high budget deficit of 7 per cent but is under pressure to contain inflation which hit a two-year peak in March of 3 per cent before continuing to rise to 3.5 per cent in June.

Earlier this week, Najib, who is also finance minister, committed RM2 billion to a Hari Raya half-month bonus for all 1.3 million civil servants and a RM500 payment to 600,000 pensioners in a bid to help ease their burden ahead of the Muslim festival at the end of the month.

The Pakatan Rakyat (PR) Selangor and Penang governments have also decided to match the half-month bonus as politicians brace for elections that are rumoured to be scheduled for November.

Najib said yesterday that major commodity producers have faced unpredictable weather conditions, partly due to climate change over the past few years, resulting in shortfalls of essential produce such as wheat and sugar.

He said lower production led to a cascading effect, resulting in panic buying in the global market and forcing prices up further, which affected poor and developing countries the most.

In his blog post titled “Time To Tackle Rising Cost of Living,” Najib also said that the government will look to improve food supply chains and expand “rakyat-focused initiatives” such as the 1 Malaysia Clinic and Kedai Rakyat 1 Malaysia which offer medical care and household goods below current market rates.