KUALA LUMPUR, May 12 — Former finance minister Lim Guan Eng today questioned if the government has any plans in the pipeline to address the nation’s acute labour shortage and rising prices of necessary items, amid worrying inflation rate and a weakening ringgit.
In a statement today, the Bagan MP said the announcement by Bank Negara Malaysia to increase the Overnight Policy Rate (OPR) to 2 per cent indicates that inflation and rising prices will be a bigger economic challenge than sustaining robust economic recovery.
“However, sustainable economic growth for 2022 could well be impeded by a weak ringgit and structural problems relating to acute worker shortage in key sectors of the economy as well as lack of institutional reforms that promote transparency and accountability,” he said.
He added that the impact of a weak ringgit, particularly dipping to historic lows against the Singapore dollar, is unexpected with rising global prices in oil and basic commodities such as oil palm.
“At the same time, economic growth is spotty with many key sectors such as tourism, hotel, entertainment and recreation as well as small and medium enterprises (SMEs) still struggling to survive to reach 2019 levels. For the public, rising prices are not mitigated by rising wages.
“The government needs to offer assistance to these key sectors and quickly overcome severe labour shortfalls as well as address the impact of rising prices caused by supply shortages as well as the weakening ringgit,” Lim added.
After hitting a five-year high last week, the Singapore dollar continued its upward trend against the Malaysian ringgit, hitting an all-time high of 1:3.1688 at the time of writing according to Bloomberg.com.
This came a few weeks after the reopening of borders, following Malaysia’s transition into the endemic stage.
Malay Mail’s check on Bloomberg on April 25 showed the exchange rate as of 4.10pm was steadily holding at the 3.1683 mark beating the previous high of 3.1650 from five years ago.
Lim also lamented that while the government has refused to listen to economic suggestions put forward by the Opposition, there is also still no real economic policy planning apart from allowing the withdrawal of Employees Provident Fund (EPF) savings of up to RM10,000, which has seen over RM40 billion pumped into the economy.
“This short-term measure creates an illusory feel-good factor that addresses the urgent financial needs of the public that does not have enough money to spend and manage rising food prices. However, what is the government planning to do when the RM10,000 is used up or the RM40 billion EPF-induced injection dries up?” he asked.
The Star yesterday reported that the palm oil plantation sector, one of the nation’s significant economic contributors, is at breaking point owing to a serious manpower shortage.
This is following the government’s yet to be fulfilled efforts to bring in some 32,000 foreign workers, with fruit harvesters in palm oil estates, especially at a critical stage, The Star reported, quoting the Malaysian Palm Oil Association chief executive officer, Datuk Nageeb Wahab.
The report said that many plantation companies have been waiting in vain for the arrival of foreign workers since late last year.