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Press Statement

by Lim Guan Eng

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(Petaling Jaya, Tuesday): There is no point in Prime Minister Datuk Seri Abdullah Ahmad Badawi having large ears even as large as an elephant if he does not listen to the truth but only sycophantic Ministers who construct Potemkin villages to detract, distract, deceive and even delude him. "Potemkin village" (where Russian Minister Potemkin reputedly erected false facades of villages that hid desolation and destruction in Crimea to impress Russian Empress Catherine II) means a sham where any false appearance is manipulated to hide an undesirable or damaging reality.

However in Malaysia, we appear to have an economic Potemkin village which claims that inflation rate is 2% when it is more than 20%. The Prime Minister should stop listening to sycophants such as Second Finance Minister Tan Sri Nor Mohamed Yackop and listen instead to the true voices of the rakyat that the inflation rate is 20% not 2% so that remedial measures can be taken to lessen the financial burden of middle and low income earners hard hit by rising prices.

Nor Mohamed is correct that there is no demand-pull inflation but only cost-push inflation. And cost-push inflation has risen tremendously with the international price of fuel like commodities like wheat rising nearly 100% this year. How then Nor Mohamed claim that the consumer price index (CPI), which measures the level of inflation, for the first 10 months of this year is only at 1.9%?

Clearly this is Bank Negara and Nor Mohamed's Potemkin inflation rate in that the CPI only measures basic foodstuffs that are subjected to controlled prices and fails to reflect the true situation. For instance, general-purpose flour is fixed at the controlled price of RM 1.35 per kg in large 25 kg packs as compared to the market price of RM 2.70 per kg in small 1 kg packs. Due to the shortage of general-purpose flour at controlled prices, many businesses are forced to buy flour at the market rate of RM 2.70 per kg, which is double the controlled price. And yet the CPI is based not on the market price of general-purpose flour of RM 2.70 per kg but on the controlled price of RM 1.35 per kg. This is false, duplicitous and dishonest.

BN Government should not mislead the public that the CPI from January to October 2007 has risen by only 1.9% when in reality the CPI has risen by more than 20%. Prices of basic food-stuffs have escalated sharply this year, with milk powder (30%), chili sauce (20%), instant noodles (26%), biscuits (27%), fragrant rice (11%) and UHT milk pack of six (20%). Many Malaysians have been complaining that everything from toll rates to instant noodles have been going up except their salaries.

Even construction companies complain that the Ninth Malaysian Plan (9MP) projects may be affected by an extra RM 30 billion to RM 40 billion due to rising cost of building materials. According to the Building Materials Distributors Association (BMDA) prices rose this year as compared to last year with steel increasing by 14%, cement by 57%, concrete products by 23%, steel fabric by 17%, tiles by 44% and bricks by 7%.

The Building Industry Presidents' Council (BIPC) even said that there were uncertainty in the supply of steel bars and cement despite paying artificially inflated prices that were way above government-controlled prices. BIPC said that its members paid between RM 400-500 more per tonne for steel bars and between RM 2-3 more for a 50kg bag of cement.

Both the BIPC and BMDA would join 27 Malaysian consumers in disputing Nor Mohamed and Bank Negara's Potemkin inflation rate of only 1.9%. Further inflation in Malaysia is worsened by BN's rampant corruption and mismanagement such as paying RM 5,417 for a RM 40 two-tonne car-jack and BN leaders such as Port Klang ADUN Datuk Zakaria Zainol Md Deros building multi-million ringgit palaces. Money lost on such scandals can help you give a better life to our children!

RM 6,000 annually for all working families earning less than RM 6, 000 monthly

There is grave concern that with the expected increase in fuel prices and toll rates in the North-South Highway next year, the situation will only get worse for working families. Further the government has indicated that it can no longer provide subsidies especially fuel subsidies alone that cost RM 27 billion annually.

Whilst it may be economically unrealistic to expect any government to perpetually subsidise petroleum and gas without limit, it is socially unrealistic to expect the poor to survive without any assistance once the subsidies are removed. What is economically justifiable can not be socially justifiable if the poor are not given any financial assistance to counter inflationary impact from removal of gas subsidies.

DAP reiterates its proposal that the government shares the oil revenues and profits earned by Petronas from rising fuel prices with all Malaysians. We have not received a single cent of the RM 500 billion or RM 20,000 for every Malaysian earned by Petronas since it was established in 1974.

• RM 6,000 annually per working family or senior citizen couple whose combined monthly income is less than RM 6,000; and

• RM 3,000 annually to singles whose monthly income is less than RM 3,000

The time has come for Petronas to share its oil revenues with 27 million Malaysians. Better to give us some of Petronas annual profits of RM 80-100 billion than to lose it through corruption, mismanagement and wastage. If an oil importer like Singapore can give S$2,500 to each family, why can't an oil exporter like Malaysia give annually RM 6,000 to working families or RM 3,000 to singles?