21st May 2007 - A lot of my close friends and unknown viewers of this blog ask me to write an article pertaining to the salary increament of the government servants. It is my intention of writing the article late after our PM announced it officially this afternoon at PICC so that I'll have a clear picture of what should I write.
You guys will be surprised of what I'll say about the announcement made on the subject matter:-
Yes! It was a very good decision by our PM and the announcement made, came exactly at the right time for us to adjust on the current inflation rate.
Why did I made the statement above? Some of my friends opined that the salary increment will trigger inflation and thus creating a balloning price rise among the businesses and effecting the consumers in a bad way. I had to disagree on that. As for myself, inflation already happened. It is due to the booming international markets and the high speed rise of a certain ex-communist nations (Communism and Marxist-Lenin beliefs proved to be futile and fools errand) such as China, East European Countries, Vietnam, India (a nations once believed on the state centralizing capital and complete socialism).
The prevailing of the Capitalism world and end up of government interference and economic barriers has made the international markets very competitive especially on the basic necessities products such as flour, rice, milk and etc (just to name a few).
This effect thus creating a very competitive markets among the international consumers and increasing the inflation rate world wide. For an example, I took flour on the domestic market scenario. MITI and Treasury alongside with Cabinet Ministers (not solely KPDNHEP) had agreed on the decision to raise the flour price not due to the incapability of the enforcement (KPDNHEP) in enforcing the regulated price on the item above, but due to the swelling up of the flour price on the international markets.
The competition of getting the products produced by a few companies on the international markets i.e. flour had gone very high and deliberately increasing the product prices in the internal market. If the government decided to keep the old price of the flour as RM 1.20 as previously gazzeted, sooner or later, there will be no flour sold within the boundry of this nations and creating an unwanted black markets just for the products. It is not only unnecessary, but also unfair towards the business community.
With the decision made by PM today at PICC on the subject matter (real income). I see it as a way in adjusting the real income to the current inflation. The decision and the rate announced today had been made based on the calculated by subtracting inflation from the nominal income. Inflation will happened no matter how we stemmed it. A lot of people will gained purchasing power compared to fifty years ago due to the booming economic environment and the collapse of the communism-socialism state.
One of the way in allying oneself to the inflation occured is increasing/ stabilising the purchasing power among the consumers and at the same time, utilizing the public money in encouraging growth with development projects such as infrastructure and high quality human produts.