Economists are expecting Bank Negara Malaysia (BNM) to increase the overnight policy rate (OPR) as inflation continues to creep in our economy.
However, economic analyst Prof. Emeritus Datuk Dr Zakariah Abdul Rashid has a different opinion on the current economic situation in the country.
Speaking to Astro Awani, Dr Zakariah believes that the long-term solution to combat the issue of rising living costs is to increase the income of domestic workers.
He said that many people had the false impression that the increase in the cost of living is only linked to the price of goods or inflation.
“I’ve said it before, a few years before the Covid-19 pandemic. The cost of living is not high, but it is about our low income,” Dr Zakariah reiterated.
“When income is low, we feel the cost of living is high. But our cost of living is actually not high. So it means that the solution is simple. The solution to the issue is to increase income, not control prices.”
Improve wages by improving productivity
Meanwhile, Dr Zakariah said that the majority of the labour force in the country is unskilled labour.
According to Dr Zakariah, if employers continue to depend on unskilled labour, the problem with country’s economic structure will continue.
Thus, he called on employers to improve the productivity of their workers by improving their skills.
Nonetheless, he said that the government has two objectives right — to increase the minimum income and control the price of goods — but added that the real issue remains unresolved.
“The right steps have been taken, but that does not mean the problems are solved. The costs of living that we’re talking about does not involve small amounts,” he added.
He said that the measures taken by the government have only alleviated the problems but not resolved them.
Do you agree with Dr Zakariah’s opinion on this matter? Share your thoughts!