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Last week, I was with a few friends and the conversation entered around the price of things in Malaysia. The common grouse was things are expensive. Cars are expensive, petrol is expensive, cigarettes are expensive, beer is expensive, houses are expensive, etc, etc. My friends who run businesses complained that the salaries are expensive. I can understand people grumble about the price of stuff. Nobody wants to pay high prices.

There were blames all around. Some blamed government policies for the high prices. They blamed the Americans and the Europeans for our high prices. They blamed private businesses for making too much profit. They blamed middlemen. They blamed Indonesians and Bangladeshis for pushing salaries low (not realising that if the Indonesian and Bangladeshi asked for higher salaries, the prices of other goods and services will go up). One guy even blamed Singaporeans for the prices of goods in Malaysia.

Before I proceed, I ask you to ponder over these :

Many people from Peninsular Malaysia, when they go to Sabah, will always buy salted fish, ikan bilis and frozen seafood to bring back home. Those things are cheaper in KK compared to KL. Do you know why?

When I go back to my kampong in the “small town” of Sitiawan, Perak, the price of many things (such as toothpaste, chocolates, biscuits, wine and cooking oil) are more expensive that what I pay in Carrefour or Mydin in the “big city” of Subang Jaya. Do you know why?

Petrol and diesel are controlled items. The price is the same all over the country. Actually no. If you have been to Bario and Bakelalan in Sarawak, you would have learnt that a litre of diesel costs over RM 6 which is 4 times the price in Miri or Kuching. Do you know why?

If you have climbed Mount Kinabalu, you would have learnt that a can of Coke costs RM 8 at Laban Rata. In Kota Kinabalu, the same can of Coke costs RM 1.50. Do you know why?

When I was doing my post-graduate research in Manchester in the 90’s, many things were very expensive. But books were cheap. Clark shoes were cheap. Cherries were cheap. (i.e. cheap meaning cheaper than in Malaysia). Do you know why?

I was trekking in Nepal in 2011. A packet of potato crisps costs me about RM 2 in Katmandu. The same packet cost me about RM 8 in Namche Bazaar, RM 10 in Dingboche and RM 15 at Lobuche – little villages in the Himalayas. Do you know why?

A lot of things are cheaper in Indonesia than in Malaysia. But not all. I learnt that cooking gas is expensive. Do you know why?

My work took me to Bangladesh in 2009 and 2010. I learnt that jackfruit (nangka) is very cheap in Dhaka. You can buy a big fruit for RM 5 (the same big fruit would cost you RM 50 in KL). But I also found out that eyedrops were very expensive. I purchased a small vial of eyedrops for about RM25, the same vial would have only cost me RM 5 in KL. Do you know why?

Have you wondered why cars are relatively cheap in the US but haircuts are damn expensive? It costs you 10 times more to get a haircut in Los Angeles compared to getting one in say KL or Jakarta? Do you know why?

I have been to Italy 7 times. Almost everything there is more expensive than in Malaysia. But high-quality shoes are cheaper than they are in Malaysia. The locally produced liquor Lemoncello and Marsala wine are, of course, much cheaper than those found in Malaysia. Do you know why?

Many west African countries produce and export cocoa. But high quality chocolates are expensive in those countries compared to the prices in Europe. Do you know why?

The prices of houses in Japan, especially in urban area, are ridiculously expensive – probably 10 times the prices in Malaysia. Do you know why?

Labour costs (salaries) are lower in Sabah and Sarawak compared to KL. Labour costs in Kelantan, Pahang, Terengganu and Perak are also lower than those in KL. But the labour costs in KL are much lower than that in Singapore. And the labour costs in Singapore are much lower than those in Germany. Do you know why?

A plate of nice crunchy pisang goreng (8 pieces) in Nabawan (in the interior of Sabah) costs only RM 1. The same plate costs RM 2 in Kota Kinabalu. It cost about RM 3 in KL. Do you know why?

There is a place north of ChiangMai, Thailand where they have planted macadamia. You can buys packets of macadamia nuts rather cheaply. But macadamia nuts cost a bomb in KL. Do you know why?

The cost of computers has declined significantly over the past 20 years. A computer in the 1980s with the same computing power and storage capacity of my notebook would have cost more than USD 1 million. Do you know why?

Many things are cheap in India. However the hotel room rates in big cities in India are damn expensive. A room that costs RM 200 in KL will easily cost RM 700 in Delhi or RM 1000 in Mumbai. Do you know why?

Complaints over the price of goods and services are common all over the world. Every single country I have visited, the locals have the same complaints - that prices of goods are high. Singaporeans, Australians, Indians, Nepalis, Bangladeshis, Thais, Italians, British, Dutch, Indonesians, Americans, Vietnamese, etc. – everyone has the same complaints [note : Singaporeans are the biggest whiners]. 

This is not new – people have complained about high prices for generations.  In fact, complains  over rising prices have been very common all over the world in the past - including in Europe and the US. People in Europe have even rioted over the price of theater tickets and the price of beer.

I think it is important that we try to really understand why things cost what they cost. A thousand and one things affect the price of goods and services. The cost of labour, the cost of transportation, the cost of raw materials, taxes and duties, government policies, social engineering measures, demand, supply, weather and of course, corrupt practices and profiteering. [Cutting corrupt practices and improving efficiency will of course help lower costs - but try telling the Singaporeans about this].

But end of the day, it is you and I who collectively determine prices through our demand for goods and services viz the availability of such goods and services.

Simply blaming policies, private companies, Singaporeans, weather, the Olympic games, etc, etc won’t help bring prices down. Before you blame others for things being cheaper or costlier in some places, we need to do our homework thoroughly.

Otherwise, we could end up implementing wrong policies or measures simply because some hare-brained politician wants to win votes. [anyone who claims “kalau saya jadi PM, harga barang turun” is simply misleading the people]. The government may be able to cause prices of a few goods go down in the short-term but can never beat the market forces in the long-term. MonyetKing

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