As ringgit worsens, more may lose jobs

Rumours about big companies closing down could become real due to the non-improving currency rates for Malaysia.

In less than two months the ringgit went from RM4.04 per US dollar on Aug 12 to RM4.42 to US$1 on Oct 2.

The exchange rate has dropped to levels not seen since the Asian financial crisis in the late 1990s while the further deteriorating MYR to USD has become 30% weaker compared with the same day last year.

Are more companies going to close down and what will happen to the less fortunate in the plummeting economy?

Reality may not have hit certain tiers of the workforce as Malaysian Trade Union Congress (MTUC) secretary-general N Gopal Kishnam says certain figures have not been reported back to the ministries.

“There are three areas which reflect that the economy is not doing well and one of it is that some companies are sending their foreign workers back earlier than their contracts have stated. The ministry is unaware of this because the companies are not informing them.

“The companies that are offering Voluntary Separation Scheme (VSS) are also not reporting to the ministries and the same goes to the retrenched numbers. When these numbers don’t go back to the ministries, they are not seeing the big picture of the current situation of the economy in Malaysia. Even if the numbers are small, a retrenchment is a retrenchment,” says Gopal.

Gopal also warns that the economy is not looking very good and that this is only the beginning.

“The worst has yet to come. What can be done with the situation? The government needs to come up with a solution immediately to at least help workers who belong to the lower middle class income earners. There are few things that can be done including subsidies and I think it is also time for the government to announce the minimum wage scale. They promised to reveal it in January 2015, we are clipping into 2016 soon,” he says.

He also says the government needs to review the Goods and Services Tax (GST) as the cost of living has increased by 20% to 30% since its implementation.

“This is a very high increment and why are they taxing the Rakyat that is already suffering? The Prime Minister also needs to postpone the signing of the Trans-Pacific Partnership Agreement (TPPA). Just take a look at poor cities around the region that has suffered from the TPPA and if Malaysia signs the agreement, the country is going to suffer more than it is suffering now,” says Gopal.

Parti Sosialis Malaysia (PSM) secretary-general S Arutchelvan also says talks about big companies closing down is in fact a reality that needs to be embraced.

“Sony is a big company and they are scaling down their employment while Yokohama Malaysia is moving its operations to the Philippines. We can anticipate that things will get more serious,” he says.

Arutchelvan says in light of the Malaysia’s economy situation, the party has worked together with MTUC to come up with possible ideas that would be able to help back the workers union to find a solution to sustain the downturn of the economy.

“We are trying to push the government to come up with a strong financial system to protect the poorer people especially with food supply at least. At least provide food for the poor. We are in the 21st century but we are still facing problems like insufficient food for the poor,” says Arutchelvan.

Having spoken to small shop owners, Arutchelvan notes that they are part of the Malaysian population that is suffering the worst.

“Simple food items like chapati used to cost RM0.60. Today it costs RM.160 as cost price has increased from the flour that is imported from India.

“The government is encouraging Malaysians to buy local products but at the same time there are not enough avenues for the local industries to grow. Just look at the property market that has taken up land which could be utilised as farmland and agriculture. People are opting to buy second or third-hand houses because they have no choice and cannot afford first hand houses. This proves that land utilisation has gone wrong,” he adds.

Arutchelvan adds that the country cannot deny that Malaysia’s economy is also affected due to the continuous power struggle and political situation that needs to improve.

“The government must realise that the country’s political situation and economic situation is very closely related hence the deterrence of investors,” he says.

---

Soo Wern Jun