Cash hands memo to PM

Daily Express

Kota Kinabalu: The Consumer Association of Sabah and Labuan (Cash) said regional disparities in economic and financial opportunities have contributed to hardship in Sabah that is symbolised by the increasing prices of essential items.

Its President, Datuk Patrick Sindu, said this in a memorandum that he presented to Prime Minister Datuk Seri Abdullah Ahmad Badawi at Terminal Two, Tanjung Aru, before the Premier left for Kuala Lumpur after a two-day visit to Sabah on Feb. 15. A copy was extended to the Daily Express.

Cash said very little of the State's revenue from its major exports returned to Sabah. In this respect, he said, the fuel adjustment for Sabah needs to be reviewed.

"The fuel hike had been significant in 2005 and 2006 and (because of that) the State's economy cannot contain such drastic adjustments without sacrificing the purchasing power of the public," he said.

As a result, many consumer items have become more costly as the raw materials being imported items were more expensive.

Cash said it is an irony that while Sabah has contributed significantly in the past three decades in oil production, it still could not derive some relief from the fuel price increases.

"Therefore, an overhaul of the system is inevitable because the spiralling prices of goods will have a devastating effect on everything," it said.

Cash said it had good reasons to demonstrate its concern with the recent increases in general price levels in Sabah.

The situation is very serious and depressing at the same time, it said, citing the case of the 12-year old Sarawakian who hanged himself for failing to go to school due to lack of money in January this year.

It said 2006 had been a difficult year for many due to the fuel hike that has been used to offset the fuel subsidy twice as the Government pushed to reduce the subsidy to zero.

While it may be reasonable to deter smuggling of comparative cheaper fuel in Malaysia due to the subsidy, Patrick said the impact of the double adjustments had affected many people especially the poor in the employment sectors throughout Sabah.

Price of essential food items from the peninsula sold in the supermarkets last year have generally increased. "Even food items like plain fried mee and the like are also more expensive."

Cash said unless the government deals with the woes faced by the people with increasing intensity, their livelihood and the standards of living would worsen.

It said there are several groups who would be adversely affected by the escalating prices of goods and essential items such as:

- Large young families with the father as the main bread winner: - The landless and renters; - Those with substantial mortgages and car loans: - Single mothers or fathers with small families to care for: - Elderly people with or without adult children with or without pensions; - The sick and disabled (either from birth or due to accidents) and/or unable to work fulltime; and - Victims of natural disasters, retrenchment and failed businesses

Cash said the Government must be proactive in addressing their needs now lest the people degenerate in terms of health. It said traders escape the effect of price increases by "passing" these on to the raw materials and purchases to the consumers.

Consumers with fixed income, it said, have to spend more money on daily necessities that would have a cumulative effect on their disposable incomes.

Subsequently, there will come a time when these consumers request for substantial pay rise to make ends meet.

But employers, on the other hand, may find it hard to oblige accordingly, it said.

"(Hence) sorting out such dilemmas that arose from the implementation of government policies would need some softening measures to avert more consequential economic and social implications," it said.

It contends that several factors have led to the present scenario, namely:

Timber, oil palm plantations, infrastructure, revenue from levies and penalties, enforcement pressure, education and training, lopsided deals, abuse of power and corruption, climatic consideration, human resources and business disability, systems of dysfunction, brain drain and wealth flight and leakage and wastage.

Cash while the timber era ended more than a decade ago, the price levels are still pegged to that tradition. "Actually, the price levels of several major components of cost of living had increased rather than declined," it said.

In terms of oil palm plantations in Sabah, Patrick said 85 per cent of them are owned by peninsula-based companies and their income is largely remitted back across the South China Sea.

Not to mention also ecological considerations.

"Lack of adequate infrastructure in large quantity is incapacitating the marketing of local produce," it said adding that damaged infrastructure have contributed to the costs of doing business in Sabah.

The quality of infrastructure in the State also is rendering poor accessibility to the rural areas. On revenue from levies and penalties, it said these are not part of good sustainable business activities.

It said the level of education in terms of skills and understanding of languages both in written and spoken for non-graduates is still far from satisfactory.

Because of the "prevailing" situation in Sabah, it said even the educated group who studied overseas in the years after independence have chosen to remain outside.

"Millionaires created from the exploitation of the rainforests have also gone elsewhere with their wealth."

So Sabah should look into producing its own food since there is still much idle land available, it said.