KUALA LUMPUR, June 23 — Malaysia’s policy planning should not just be based on the Gross Domestic Product (GDP) or the Consumer Price Index (CPI), but also take into account its population’s real needs and concerns, the Federation of Malaysian Consumers Associations (Fomca) said today.
Its secretary-general Datuk Paul Selva Raj today proposed the Consumer Well Being Index that measures the satisfaction levels of Malaysians about daily life issues.
“We need to move beyond measuring GDP and CPI to metrics that shape the well-being of people today,” he said in a statement.
He said that there was a need for a shift in policy as there was a growing gulf between the statements of policy makers and the lived experience of ordinary consumers.
“Making a statement that the GDP is improving or the CPI is decreasing and expecting that the people will rejoice with these statements, will just not happen.
“If a housewife who bought vegetables and fish finds that the prices in the pasar malam have increased more than double since the previous week, a low CPI means nothing.
“If we rely on indicators that are out of sync with people’s real experiences, this could easily develop into a lack of trust of the government in understanding and acting in the best interests of the rakyat,” he said.
Paul said that instead of GDP and CPI, voters cared about employment with fair income, employment for their children, job security, increasing cost of living especially for food, affordable housing, healthcare, children care and education, and water supply.
“Their lived experience will determine their quality of their well-being. For example if the only jobs available for themselves or their children is in the gig-economy or low- income job opportunities, an improved GDP is meaningless,” he said.
The Consumer Well Being Index will use three metrics: Subjective well-being (SWB), economic security and trust in government.
“The SWB metrics measures the level of satisfaction of the rakyat in issues impacting their lives such as cost of food, housing and healthcare. It can also measure whether people are positive or negative about their future,” he said.
For example in a World Bank study in Malaysia from 2012-2018, both rural and urban households have felt growing hardship in their life conditions.
Urban residents, those who felt their lives were thriving decreased from 28 per cent in 2012 to 16.2 per cent in 2018, while those who felt their lives were struggling increased by 12 per cent between 2012 and 2018.
According to Paul, SWB indicators are powerful indicators that signal wider problems in people’s lives, capture prevailing sentiments and predict behaviour, and are better predictors for voting behaviour.
Economic security metrics measures how vulnerable consumers feel to the environment that possibly could affect their personal incomes, like when the recent Covid-19 pandemic destroyed or severely impacted economic life for many workers.
More recently, the use of digital finance, e-commerce and robotics has impacted those in the banking, retail and manufacturing sector respectively.
Paul said there has been great concern about the impact of artificial intelligence and the potential impact on almost every sector.
“Also of real concern is the constant politicking in Malaysia and its impact on foreign investment and its impact on the future on the employment opportunities for their children,” he said.
The third indicator measures the trust in government and institutions and regulators that impact on the well-being of consumers.
“Trust enables the government to make difficult decisions that may bring short term pain but are necessary for long term benefit of the nation.
“For example the government implemented the unpopular GST but was eventually accepted by the people. The current government is seeking to reform the subsidy system as well as the healthcare funding system. Does enough trust exist in the government for people to accept these changes?” Paul said.
Internationally, there are large differences across other countries.
For example, a survey in 2014 said that in Norway, 68 per cent of the population are trusting of others while in Malaysia, only 9 per cent were trusting of others.
“For Malaysia to move forward, broad measures such as GDP and CPI are useful but certainly not enough. If policy makers want to ensure ‘real progress’ at the level of the rakyat, they need to understand their perceptions and sentiments and form policy and put that into practice,” Paul said.
