Three-sen egg price drop has small impact, focus on improving disposable income - Economist

18 Jun 2024 08:30pm
Photo for illustration purposes only. - Photo by Bernama
Photo for illustration purposes only. - Photo by Bernama

SHAH ALAM – The government should improve household disposable income rather than reduce expenditure prices for a more meaningful impact for the people.

Universiti Malaya (UM) Social Wellbeing Research Centre senior research fellow and economist Dr Zulkiply Omar emphasised the need to move away from a subsidy-focused approach, warning that reliance on subsidies could disrupt market prices and necessitate improvements in production and distribution efficiency.

He highlighted the importance of the government's policy to focus on improving disposable income for Malaysians to be more productive and have a meaningful impact.

"In terms of effectiveness, I believe that the procedure is unreliable in the long term.

"If the government was really to help people afford goods, specifically foods, they should focus on helping children affected by food crises, as highlighted by the United Nations, such as by donating to the children's food programme or increasing the family's disposable income in order to be able to afford foods for their children," he said.

He added that the reduction in the price of eggs by three sen was not that beneficial.

He said it was essential to examine the issue and ensure that people were consuming appropriate foods, noting that reducing prices could influence the perspective if saving was a targeted goal.

"It would be more meaningful if reducing the price of expenditure impacts the children, which currently does not and is more doable if we increase household disposable income instead, where parents can help children get free foods, rather than reducing the income of goods like eggs.

He emphasised the importance of prioritising children's needs in any governmental policies.

Meanwhile, political economist Dr Khadijah Md Khalid said the government's decision to reduce the price of eggs by three cents was unreasonable.

"The focus should be on lowering gas and petrol prices, where the people are currently struggling with while making ends meet," she said.

"Stop importing eggs, as this is one of the food security initiatives.

"Save our local currency, the ringgit," she said.

She added that importing foods like eggs was an unnecessary initiative, especially when maintaining food security simultaneously.

She said the government must address the issues and challenges of food security and at the same time, build economic resilience.

"It is amazing that we now have to import eggs from other countries.

"Why? Is it due to egg cartels? What about importing coconut milk from Indonesia when we already have so many local coconuts but lack workers to ensure coconut milk supply?," she said.