Inflasi 0

I wonder if anyone else can remember the “inflasi sifar” (zero inflation) campaign that was held by the government around the mid-90s. I can remember that there were posters hanging everywhere and even a little campaign song playing on TV all the time. That was the first time I was exposed to the concept of price inflation. Today, I dare not imagine what’s going to happen to our economy in Malaysia.

Everywhere I go, I read that the price of commodities are going up. The government’s price control mechanisms, which were used to curb inflation for decades, is failing. Therefore, I do believe that years of backdated inflation, is going to catch up with us, in a very bad way. Although I am not an economist, even I know that it spells trouble when the price of fundamental commodities go up.

The price of rice, which is a staple in Malaysia, has been going up steadily. This will affect every single family at home. The cap on cement is being lifted immediately and this will affect all the construction going on in the country. Worst of all, the control on petrol is slowly being lifted and the target is to have pump prices follow market rates at the end. This will affect the cost of transportation, which ultimately affects everything.

Personally, I think that having artificial price controls is not necessarily a good thing. However, I have to think about people as well. Regular people will be pinched badly, when the controls are lifted. The trouble is that the wages in Malaysia, has not kept up with things. Over the years, we have artificially deflated our economy. So, nobody, not even the government, has been raising annual wages realistically.

As a result, if the cost of living rises sharply, a lot of people are going to get hurt in the short term. Then, the government would need to raise the civil service pay significantly, in order to keep up. This will then force the private sector to do the same. As a result, everyone needs to pay more for everything: food, petrol, cement, and even labour.

Seeing that I might be going home soon, I tried to see if there were ways that would allow me to curb my spending. For one, I will have to stop driving everywhere. The good news is that I live rather closely to many places and so, I can possibly afford to cycle around a bit. It’s going to be extremely hot and possibly dangerous. But at least, I would be able to save on direct petrol costs.

And, every problem presents an opportunity. Any increase in the price of goods, presents an opportunity for a business to supply an alternative, at a cheaper price. I have actually been thinking and researching along these lines recently and have surprisingly, found an undeveloped niche. All that is needed is a leaner, meaner way of doing business and some creative sourcing. Maybe it’s time to flesh out the ideas a little bit more and maybe go into that business.

I dread to think how this is going to ultimately work out. I guess that I’ll just need to put my trust in the people managing the economy. Yes, you economists out there, please don’t screw things up. Let’s try to optimise inflation and hopefully, things will all turn out right at the end of the day. I just pray that I won’t have to end up forking RM10 for a roti canai at my local mamak. Maybe it’s time to bring back the inflasi sifar jingle.