Everyone Wants Sex, But Not Everybody Have It

Malaysians who find themselves affording less than their contemporaries overseas have distorted and inefficient markets, lack of competition, low wages and a weak ringgit to thank for their poor purchasing power, which in the case of KL, is only 34 per cent that of New York.

Despite government assurances stating that inflation is under control, Malaysians are becoming increasingly restive over the cost of goods in relation to wages, especially those who are able to compare the corresponding price-to-wage ratios in developed economies.

Malaysians who have experienced working and living abroad often experience sticker shock when they come back and see prices in KL.

“Oh my God, a Tiramisu is RM15!” said Calvin Lee, a Malaysian who has lived in Sydney, Singapore and now London, referring to what cafes in KL are charging for a slice of cake as compared to about GBP5 (RM25) in London.

Aidi Zalman, a consultant who studied in the UK, told The Malaysian Insider that salaries in London could go much further than KL.

He had worked part-time as a waiter in London and noted that a single day’s wages of about GBP50-60 was already enough for him to buy a pair of branded shoes and even a low-end iPod, a concept unthinkable for local waiters.

“GBP100 can feed two apartments of students for a week,” he said. “Here you can spend RM100 and get hardly anything.”

“I hate it when politicians make stupid statements like Malaysia is cheap,” said Edward Seah, an engineer who has previously worked in Singapore and the US. “Prices might seem cheap when you convert it to US dollars yes, but then we should also convert our salaries to US dollars.”

Victor Wong, a Malaysian expat in Sydney, said that Australians get more mileage out of their money.

A report by Swiss bank UBS AG shows KL residents have to work 22 minutes to afford a loaf of bread as compared with 18 minutes in Los Angeles.

He gave the example of clothes where he said he can get a good quality shirt for about AUD100 but would need to spend about RM200 to get similar quality in KL.

Wong pointed out that even Asian food could be more affordable for those living in Sydney than KL.

“You pay RM15 for a bowl of soup noodles in KL shopping centres but only AUD10 in Sydney shopping centres,” he said.

The 2010 Prices and Wages report by Swiss bank UBS AG show that residents in KL have only 33.8 per cent the purchasing power of their counterparts in New York, 42 per cent that of London, 33.7 per cent that of Sydney, 32.6 per cent that of Los Angeles and 31.6 per cent that of Zurich.

The same study showed that on average, KL residents have to work 22 minutes to afford a loaf of bread as compared with 18 minutes in Los Angeles, 16 minutes in Sydney, 15 minutes in Tokyo and 12 minutes in Zurich.

The figures grow much worse for imported items. To buy an iPod Nano, a KL worker would have to labour a whopping 52 hours as compared with just 9.5 hours in Los Angeles and Sydney, 12 hours in Tokyo and nine hours in Zurich.

A check on salaries and prices in selected developed country cities by The Malaysian Insider showed that despite being touted as one of the world’s least expensive cities, KL residents pay as much or even more for chicken, broadband, cars and mobile phones as a percentage of their income.

Communications, for example, is one area where Malaysians are paying notably more than residents in developed countries even after currency conversion.

A 5Mbps broadband package costs RM149 in KL while in London, a 10Mbps package would cost GBP13.50, in Melbourne a 5-8Mbps package costs AUD40 and in New York, a 7Mbps service costs USD41.95.

Those who want to buy an iPhone 4 in KL, meanwhile, would have to pay RM1990 with a basic 24-month contract while in London, residents can get an iPhone 4 for just GBP199 with a basic 24-month contract and in Singapore, it costs just SGD210 with a basic contract.

Maybank Investment Bank chief economist Suhaimi Ilias said that what is important is local perception and not official inflation figures which claimed that the inflation rate in Malaysia was only 1.7 per cent last year.

“I think on the ground, not many people feel we are cheap,” said Suhaimi. “They feel that the cost of living is high regardless of what the inflation figures are.”

He added that inefficiency and lack of competition are contributing to the higher prices in Malaysia.

“I can’t understand why a motorcycle should have to cost RM6,000-7,000 and a car like the Perodua Viva should cost over RM30,000,” he said.

RAM Holdings chief economist Dr Yeah Kim Leng said that cars are one of the sectors where the Malaysian market suffers the heaviest distortion.

Despite being touted as one of the world’s least expensive cities, KL residents pay as much or even more for basic items as a percentage of their income.

A Honda Civic in KL costs about RM115,000, or 20 times the average monthly salary of an auditor.

In Melbourne and London by comparison, a Honda Civic costs AUD25,000 and GBP19,000 respectively, or only about three times the average salary of an auditor in those cities.

The high cost of cars is part of the reason that Malaysians have leveraged themselves to a record 76 per cent of the country’s GDP.

Bank Negara statistics show that at the end of last year, 20 per cent of Malaysian household debt was due to cars, an asset which depreciates over time.

Yeah also said that the ringgit is undervalued and distorts the country’s purchasing power for imported goods.

“We need to ensure prices are right and that there are no market distortions, no subsidies and allow market prices,” he said.

But even if the ringgit is allowed to rise, there is no guarantee that savings would be passed on to consumers. The ringgit is now hovering at RM3.02 to the US dollar but Goldman Sachs predicated yesterday the currency could hit RM2.98 to the US dollar in the next three months.

When The Malaysian Insider contacted the director of wholesale and retail at government think tank Performance Management and Delivery Unit (Pemandu), Ravidran Devagunam about the higher prices Malaysians pay for branded goods, he acknowledged that some retailers will maximise profits on luxury items not readily available in Malaysia but said that the government is “unable” to compel them to discount their prices even after the abolishment of import duties as luxury goods and apparel are not controlled items.

“However, we believe that market forces and consumer education will eventually force a price reduction of these goods over time,” he said.

The Federation of Malaysian Consumers Associations Secretary General Mohd Shaani Abdullah said people should question the prices that they are currently paying.

“Consumer protection will only come about when people make noise,” he told The Malaysian Insider when contacted. “Only then will politicians act.”

Source: Malaysians plagued by poor purchasing power

By Lee Wei Lian, Yow Hong Chieh and Melissa Chi

Malaysian Insider April 19, 2011

Analysts say the undervalued ringgit distorts the country’s purchasing power for imported goods.

How Quality of Life is as Poor as Sex Life

For some time now, economists have become comfortable with catchwords that we once associated with the speech of psychologists. Even as they speak about money, profits and balance sheets, they no longer blush when they mention such things as emotional well-being, self-esteem and spiritual vitality.

And Malaysian politicians and technocrats have caught up fast in using these jargons. They are no longer talking about “standards of living” or “costs of living”, but rather the “quality of life”, as if it means anything to the poor Malaysian wage earner struggling to provide his family with three square meals.

Malaysia’s good old days are really not that old. Middle-aged Malaysians can still remember when you could have coffee with a friend for 20 cents. (We used dollars and cents then.) And if you had an extra 50 cents in your pocket, you could each have a roti canai or a bowl of mee or kuay teow. Your bus fare probably cost you 5 or 10 cents, and you could talk forever on the phone for 10 cents if it was a local call. If you earned around $500 a month, you could own a car.

In short, life used to be good. There was quality in it.

Today, an urban family earning a household income of RM3,000 a month would be lucky to survive the costs of food, utilities and transport. Try shopping with RM50 and see what you can take home to your family.

And now rumours are bouncing around that another round of price increases is in the offing.

Meanwhile, the issue of minimum wage is still in the dock.

Serious problem

Nothing has probably changed since the 2007 survey that showed that more than 57.8% of Malaysian households earned less than RM3,000 and 70.7% earned less than RM4,000.

Many villages in Sabah and Sarawak are still not connected by road and more than a quarter of households there do not have electricity. Furthermore, at least 50,000 families in the state are in need of new or restored houses.

In urban areas such as the Klang Valley, public transport remains a serious problem. Infrastructural coordination is poor and “networking” exists only in our dreams.

Municipal councils seem to be blind to the serious shortage of car parks, a shortage that takes its toll on housing estates and shopping centres and turns even the well-bred into inconsiderate motorists who have made a habit of double and even triple parking.

The rat population is increasing at an alarming rate in residential areas as night markets and hawker stalls sprout up everywhere and uncollected garbage pile up into mountains.

Quality sleep

Highways and expressways that cut across residential areas are causing so much noise that we can only daydream about having quality sleep.

It was once said that in Malaysia, as elsewhere in Asia, the affluent tend to surround themselves with comforts befitting their status, shutting out the plight of the less fortunate around them.

But times have changed. There are problems everyone suffers, regardless of income. The decaying environment, traffic congestion and rising crime rates make life lousy even if you are rich. Bad governance and inept public administration affects everyone.

In 2005, Malaysia was ranked 36th in the Economist Intelligence Unit’s Quality of Life Index. By 2010, we had fallen to the 85th position.

If the quality of our life is not improving, should we change our lifestyle to suit our economic position or should we change the ruling regime? Perhaps Malaysians should be thinking instead of the quality of the government that they want.

source: Free Malaysia Today.

Enjoying IT on a lap top position

Malaysia slid from 27th to 28th in the 2010-2011 Global Information Technology report released yesterday after it was bumped down by Qatar which jumped 5 spots from 30th to 25th.

Malaysia’s placing this year is equal to its ranking in 2008-2009 and worse than the 26th ranking achieved in 2006-2007 and 2007-2008.

Sweden and Singapore retained their first and second placing respectively atop the rankings with Finland, Switzerland and the United States rounding out the top 5.

The Global Information Technology report is an annual publication prepared by the World Economic Forum (WEF) and INSEAD which assesses the impact of ICT on the development and competitiveness of 138 economies worldwide.

The WEF said that this year’s report confirmed the leadership of the Nordic countries and the Asian Tiger economies in adopting and implementing ICT advances for increased growth and development.

It noted that Sweden, Denmark (7th) and Norway (9th) are all are in the top 10, except for Iceland, which is ranked 16th.

Singapore meanwhile led the Asian Tiger economies with Taiwan and Korea improving five places to 6th and 10th respectively, and Hong Kong SAR following closely at 12th.

A look at the sub-rankings show that Malaysia was helped by government readiness (11th) but hurt by the infrastructure environment (51st) and individual usage (45th).

It was also ranked 42nd for international internet bandwidth and 59th in terms of broadband subscribers.

The ICT rankings come after Malaysia dropped two spots in the WEF competitiveness index last year, coming in 26th out of 132 countries and marking the second year in a row Malaysia has dropped in the rankings after falling from 21st to 24th spot in 2009.

The WEF rankings in coming years however are expected to show how effective are the Najib administration reforms such as the New Economic Model, the Government Transformation Programme and the Economic Transformation Programme, all of which were launched between January and December last year.

Source: http://www.themalaysianinsider.com/malaysia/article/malaysia-slips-down-ict-competitiveness-ranking/