‘KR1M makes no sense for Sabah’

The federal government's failure to resolve the existing price differences between the east and west Malaysia dooms Sabah to being a workhorse for peninsula-based business.

KOTA KINABALU: An opposition MP has accused the Umno-led Barisan Nasional coalition government of ignoring the reality that its economic policies are forcing people in poorly developed Sabah and Sarawak to pay higher prices for goods and services that are far cheaper in the peninsula.

Kota Kinabalu MP Hiew King Cheu said the federal government had again missed the opportunity to address the issue of the high cost of living in the two states when tabling the Budget 2013.

He said if Prime Minister Najib Tun Razak was really sincere about wanting to ease the financial burden of ordinary people in an era riddled with inflation, his government would have subsidised the prices of essential commodities in order to bring prices down, especially in the two states where goods cost up to 30% higher than in the peninsula.

The MP said the lack of concern by the federal government over the issue could be seen in the new budget which spells out how millions of ringgit paid in taxes will be used to establish a chain of Kedai Rakyat 1Malaysia (KR1M).

While questioning the justification for arbitrarily allocating RM386 million to establish 57 KR1M stores in East Malaysia, he said, this would mean about RM6.7 million per shop.

The amount set aside for the price control programme is far higher than the Budget 2012 allocation for such shops.

In Budget 2012, RM40 million was set aside for 85 KR1M shops to be established in the peninsula which works out to RM470,000 per shop.

Hiew said such spending was unreasonable and economically flawed as the new shops posed a direct threat to the survival of the local small businesses and sundry shops known as kedai runcit.

“This KR1M is government-financed and will be selling goods at very low prices so they will definitely slaughter the existing small businesses. How can the kedai runcit survive? This will even affect the business of the supermarkets too,” he said.

Sabah is just a ‘workhorse’

The MP also took a swipe at the Sabah state government for ignoring the issue of the rising cost of living in the state.

He said a simple example of the paradox of the system could be seen in fuel and cooking oil prices where despite Sabah being a major producer of both items, the state saw no benefits from the export of the product.

“We produce a huge quantity of crude oil and crude palm oil and yet we pay high prices for fuel and cooking oil. The state government should be fighting for higher subsidies from the federal government to allow the Sabahans to enjoy the benefits,” Hiew said.

This is not the first time the issue has stirred debate. Several BN state governments have been accused of being meek and unwilling to confront federal economic policies that are tilt in favour of businesses based in the peninsula at the expense of consumers in the state.

“They should not continue to keep silent on the issue while Sabahans continue to pay high prices. It is the government who has to control the prices of goods and not by spending huge amount of taxpayer’s money to open up KR1M shops to kill the existing small businesses.

“The cost of living in Sabah and Sarawak is increasing fast. The average wage earner can no longer bear the high cost of living. Inflation in the state is greater than anticipated but income remains low and stagnant,” Hiew said.

Locals say that the failure to resolve the existing price difference between the east and west Malaysia dooms the state to just being a workhorse or producer of raw materials for peninsula-based business.

Meanwhile, the KR1M shops are also coming under closer scrutiny over concerns that like many hijacked economic policies the cheap goods scheme will become a BN cronies enriching scheme in disguise.