The hike in fuel prices has caused lots of protest in Malaysia.
People are blaming the government for the price hike and protesting that it is unfair and that Malaysia being an oil supplier should not charge so much for petrol. I am disgusted that some parties wrongly use it as a political agenda.
The truth is the hike is because of simple economics of demand and supply. When demand rises, prices increases. Simple as that. Over the years, the government has been subsidising the price. This market interference by the government is actually not healthy over the long run because the price should be determined by market forces to achieve equilibrium in demand and supply. All these might sound very theoretical economics but it is how the whole economy operates to achieve efficiency.
The main problem with the inflationary pressure in many countries at the moment is because of the boom in China. The rural folks in China who used to be farmers have now migrated to the cities to work. Because of the industrial boom, and agricultural decline,China now has to start importing food to fulfil its increasingly affluent population. This significant increase in demand from China has led to the global price hike in food and oil prices.
While the UK and US is facing the consequences of the credit crunch, the emerging economies like China and India are booming. The boom however will not be able to cushion the recession brought about by the credit crunch of the west because of the inflationary pressure due to significant increase in demand from China.
This is a time to be prudent for we have become a wasteful society.
We waste food.
We waste time.
We waste money.
Perhaps the price increases is a wake up call for us not to be so wasteful.
2 comments:
demand & supply
this ideology can definitely good for everyone
but, there're hands everywhere controlling the demand & supply of not only fuel but other thing as well
when ppl having problems in butter & bread (or rice)
they won't care what's it about 'demand & supply'
(me & you would not know how hard are these ppl suffering)
generally, ppl are pissed about the government for not helping much in increasing the productivity of the country
& also spending unreasonably on white elephant projects, like the angkasawan
kian hui,
even though, i didn't grow up with problems of not having rice to eat because my parents were able to provide for me, i know it is hard because i was brought up with 'just enough'.
im sure it was a tough decision for the government to make because they know the consequences of the obvious protest that it will cause. but the decision has to be done eventually because it is not efficient over the long run. perhaps it should have been done gradually to reduce the shock.
i think there is no need to get pissed by what the government has done because there is nothing that can be done for what that has been done.
the next election will be interesting. if the opposition wins, we can look forward to seeing what changes they can bring - or not. afterall they are all the same - politicians. but we'll see and be hopeful that change will come.
i still think the cause of all these inflation problems is China. I heard they are even importing pork from Malaysia now. China seriously needs to do something to control this inflationary spiral that is getting out of hand.
it is always fun hearing your political views kian hui. i miss that. ;-)
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