Kuala Lumpur’s cost of living index in the Economist Intelligence Unit’s (EIU) ranking of the world’s most expensive cities has risen by nearly 25 per cent over the last two years, posing a potential challenge for the Najib administration which is aiming to bounce back from the ruling party’s worst-ever electoral defeat in 2008.
The EIU takes into account more than 160 items, from food, toiletries and clothing to domestic help, transport and utility bills, in 140 cities worldwide to formulate its index, which uses New York City as a benchmark.
Higher fuel prices have contributed to the rising cost of living in Kuala Lumpur. — Reuters pic
Data made available by the EIU to The Malaysia Insider show that KL’s index rose from 67 in June 2009, which was just after Datuk Seri Najib Razak took over as prime minister, to 82 last month, a jump of 15 points or 22 per cent.
While the US dollar’s depreciation against the ringgit could partly account for the rise, rapid increases in prices of property and food and to a lesser extent fuel have been a constant source of complaints especially among urban Malaysians in the last two years and the discontent could manifest during a general election which must be held by 2013.
In the run-up to the 2008 polls, a spike in fuel prices and toll rates had helped contribute to a backlash against the Abdullah administration and helped earn the ruling Barisan Nasional (BN) coalition the informal moniker of “Barang Naik” (or “Price Increase”).
Cost of living was also a key election issue in the recently concluded Singapore general election in which the ruling PAP party won its narrowest votes gained since the island republic’s independence.
While the BN government maintains that the inflation rate remains manageable at 2.2 per cent last year and between 3 and 4 per cent this year, many urbanites feel that the figures do not reflect the real cost of living and that wages have not kept pace.
Price increases, especially for property and food, also tend to be higher in urban areas where BN tends to be weakest.
The Najib administration is also facing a dilemma as it has pledged financial reforms such as subsidy cuts to help balance its budget and push Malaysians to get used to market-based pricing but such fiscal exercises could further aggravate price pressures.
The prime minister has however taken some steps to tackle price issues such as launching an initiative to build affordable urban housing, freezing toll rate increases at selected highways or even removing them altogether, and is introducing a competition law in January next year which could help boost competitive pricing.
It also aims to introduce a minimum wage by the end of this year although both the country’s largest workers’ and employers’ groups are against parts of the wage policy.
It is too early to tell however if such initiatives will be enough to alleviate the cost of living issues experienced by the electorate to any significant degree.
The EIU report showed that KL rose from 101th most expensive city in June last year to 86 in June this year.
The most expensive city in the world in the EIU ranking was Tokyo, Japan while the cheapest was Karachi, Pakistan.
The online version of the EIU report is available at www.eiu.com/wcol2011.
comments
No thanks to BN's Barang Naik policy!
We need to have an alternative government!
How to survive nowadays with my fixed pension? Utilities, foods, and essential items are up but our self-declared 1st lady just received a diamond ring of RM73million. There is something isn't right in Malaysia, ordinary folks work hard only to have shelter and foods but the ruling class can afford luxurius items beyong our imagination.
Them ministers don't get it. They live in the luxury of chaffeur-driven cars and fly 1st class everywhere, at the expense of the Rakyat. Show me 1 minister apart from LGE who flies economy class. When they feel that they are entitled to live a life of luxury, then however much prices go up, they still won't feel it. Our generation is one poorer than our dad's. Development? Sure. Inside the minister's bank accounts.
No comments:
Post a Comment