LETTER | Anwar should focus more on the economy, less on politicking

LETTER | Recently, Ayer Hitam MP Wee Ka Siong posted a video on social media about the knock-on effects of a power tariff hike.

The former transport minister's views deserve more attention in light of its huge impact on the economy.

While the government is on the right track with its subsidy rationalisation plan, it should only do so cautiously and after a comprehensive study. A rushed job can have counterproductive effects on the economy.

Take the electricity bill, cited by Wee. For many small and medium enterprises (SMEs), power is a large chunk of their operating costs, especially factories or retail outlets. It can go up to 40 percent of operating expenses, depending on the industry.

What happens if these businesses face a tariff hike? Usually, they either cut other expenses or pass on the costs to consumers. For the former, the easiest cost to cut is human resources.

Increased unemployment

This can come in several forms. It can be a reduction in overtime pay to workers or not paying at all (which is illegal but many workers will be reluctant to complain to the authorities for fear of repercussions). Or employers can choose to let go of staff, leading to increased unemployment.

The other option for businesses to cover their costs is to pass it on to consumers. This means consumers will have to pay more for the same products and services as before.

As it is, many are already feeling the pinch from the weaker ringgit and the overnight policy rate (OPR) hike. The last thing they want is to have to stretch their already diminishing ringgit further.

Neither option is desirable. Many workers are already having trouble coping with the costs of living challenges, especially in large towns and cities. Reducing their pay or worse, being let go of at work, can spell disaster.

Do we want our unemployment rate to go up, at a time when we have barely recovered from the Covid-19 economic fallout?

Economic morass

Neither do we want inflation to get worse with traders hiking prices just to keep themselves afloat. Many are already having trouble buying basic necessities like baby formula, napkins, and food. There is no necessity to add to their burden.

This is why a hike in power tariff is not desirable. Wee has rightly pointed out why this is so and I hope the government hears him out. It is time this unity government focuses on the country's economic well-being.

As it is, little has been made known of how the government plans to tackle these challenges beyond the Rahmah initiatives like the RM5 menu in selected restaurants. But these initiatives will run their course soon and a more sustainable strategy is needed for the long run.

I hope Prime Minister Anwar Ibrahim, who is also the finance minister, can spend more time sitting down with economists and financial experts to come up with a strategy to lift Malaysia out of this economic morass.

The economy needs his attention, but Anwar seems to keep getting distracted by politicking, which is unfortunate. At the end of the day, it's the welfare of the people that matters, not the unproductive politicking.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.