Pinch on the wallet

THE economic news internationally is not good. Markets are tumbling and inflation is up. For us here, we have the added pressure on the ringgit’s value which continues to decline against the US dollar.

The biggest culprit to our purses is inflation. As inflation rises, spending power takes a hit.

The actual amount of goods and services a Malaysian can buy will be squeezed from the evaporation of purchasing power from the value scrubbing impact of inflation.

This will also have a telling impact on consumer spending and when the government announced that there will be relaxation on the importation of foodstuff into Malaysia, there was hope that maybe there could be some form of mitigation against higher food prices locally.

There has been much argument against the use of approved permits to bring in food.

Having the security of government commitment to those importing foodstuff will give foreign suppliers the comfort that there can be security of payment for food that is being imported into the country.

But on the other hand, if the cost of importing food is exorbitant, then there can be an artificial cost of profiteering from those who possess the right to import food into Malaysia.

Examples of how much more Malaysians are paying for some foodstuff because of limited sources of suppliers has been brought up before and if the relaxation of approved permits is limited only to selected foodstuff, then the entire purpose of allowing competition will be blunted.

It has been proven that competition is the best arbitrator for maintaining competitive prices.

But supply disruptions are causing headaches throughout the world where the price of food has escalated because of knock-on effects.

As prices go up, there will be hard choices to be made for households. There should be pressure valves being relaxed to ease that but an overhaul of the existing structure of food security should be looked at with more earnest once conditions return to normal.