HOW TO LOSE ELECTIONS 101 - PUMP UP INFLATION

 Just the other day there was a 'dapat percuma, duit entah mai dari mana' RM1.0 billion 'allocation' announced at that Bumiputera Economic Congress. Do you all recall?

Now there will be another RM10.0 Billion pumped into the economy by way of a 'naik gaji' of 15%?  Which is being touted as the single largest naik gaji for the Penjawat Awam. Congratulations.

Again where is the money coming from? The Budget was a deficit budget, the gomen has to borrow more and more to cover its ever rising expenditures. Now they are spending another RM10 billion. Where is the money coming from? Ask the Treasury to issue more bonds? 

According to Jabatan Statistik Malaysia the inflation rate for February 2024 was only 1.8%.

The annual inflation rate is expected to be about 3% - 3.5%.  Wow fantastic. That is super-duper low. That is what the gomen tells us.

'For 2023 as a whole, headline inflation declined to 2.5% compared to 3.3% in 2022..'

So if the purpose of the naik gaji is to help the Penjawat Awam meet higher inflation then why increase the gaji by 15% when the inflation for February 2024 was only 1.8% and the annual inflation maybe less than 3.5%?

Why not naik gaji by just 5%? That is more than enough to meet the inflation rate of say less than 3.5%.  Can the pakar-pakar okonomi please explain? 

 

Then the World Bank says that in 2024 the Malaysian economy will be underachieving.

 

If the Malaysian economy is "underachieving" it is an immediate reflection on the gomen's administration. The gomen administration is also under achieving - that is why the economy is underachieving.

So tak tahu buat kerja, economy is 'underachieving' but you can get 15% salary increment? Wow? Banyak cantik.

And then they suggest the private sector to 'follow the gomen'. The private sector is not so stupid. The private sector will give you a higher salary when you work hard and become more productive. If you are not productive or you dont work hard the private sector will never give you a salary increase. That is common sense.

The World Bank says the Malaysian economy is underachieving. What does 'economy is underachieving' mean? It means that the Malaysian economy is producing less goods and services. The factories are producing less, Langkawi is dying, exports are possibly decreasing, the value of the Ringgit is shrinking bla bla bla. That is the meaning of the Malaysian economy is underachieving.

So suddenly you pump in RM11.0 billion (RM1.0b Bumi Congress money + RM10b naik gaji) into an economy whose inflation is super-duper low (according to the gomen) and whose economy is underachieving - and guess what will happen?

The inflation rate will go up. Harga barang akan naik.  You are producing less, your output is less, suddenly there is an extra RM11.0 billion free cash sloshing around the economy certainly prices will go up again.

Its like this tuan-tuan.

If there is RM100 million in the economy to buy cars, that RM100 million will buy 1000 cars at a price tag of RM100,000 per car.

Suddenly there is RM110 million in the economy but the number of cars has not increased (the output of the economy has not increased) this means the prices of those 1,000 cars  will increase by 10% to become RM110,000 per car. Harga kereta sudah naik 10%. Inflasi harga kereta adalah 10%.

So walaupun jumlah gaji naik jadi RM110 juta tetapi harga kereta pun akan naik dan batalkan kenaikan gaji tadi.

Inflation will just keep going up when you keep pumping buta money into the system.

Obviously this is just another gimmick. To get the Malay votes again. 

But when foolish policies (to benefit just a few people) keep pushing inflation up and up and the whole country suffers, thats when you lose the elections.

HOW TO LOSE ELECTIONS 101 - PUMP UP INFLATION

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.