By TK Chua
It does not matter that the Kedai Rakyat 1Malaysia (KR1M) has
launched a version 2.2 or any future version. To me the consequences
will be the same.
It is just another case of doing things without thinking, and using
government money for nothing. How we can have a government that is so
stubbornly inept is simply beyond me.
How would KR1M 2.2 be any different from the previous version? How
could it be selling products (presumably with similar quality) 30% to
50% cheaper?
How does Domestic Trade, Cooperatives and Consumerism Minister Hamzah
Zainudin know that the people’s response to KR1M 2.2 would be
favourable?
Did he base the response on a sustained basis or was it just a “flash in the pan” thing during the initial discount period?
Also, how can an occasional funfair-like sale change the cost of living for the people at large?
It is almost impossible for KR1M 2.2 to sell goods 30-50% cheaper unless the following three things take place.
First, KR1M 2.2 is super-efficient when compared with other retail chains.
Second, KRIM 2.2 is more altruistic, willing to make much less
profits than others, and, third, KR1M 2.2 is heavily subsidised by the
government.
It is not difficult to imagine how all the three factors above are neither viable nor sustainable.
To me, this is the second round of good money being thrown at a bad
programme. It is only a matter of time before we see who will be proven
right and wrong.
In a functioning market economy, it is the job of the government to
make it work more effectively. Direct intervention by mandating that a
certain number of stores be set up in certain locations is not going to
work.
On the other hand, the government must free up supply chain
monopolies, allow easy entry and exit as well a encourage greater
competition at all levels.
How can the government and KR1M 2.2 know whether a new retail store
is needed in a new location? I think an entrepreneur would be able to
identify any opportunity much better, not the government or KR1M 2.2.
Sometimes, I think it is better for the government to do less.
Setting up stores requires budgetary allocations and additional
subsidies which take up tax revenue.
If government programmes are not effective, it could actually
increase the cost of living. Hence, the government doing less could
actually lower the cost of living.
The cost of living is the consequence of many factors, not just
retail stores. The government must encourage new players, not become a
new player themselves or mandate that someone become a new player.
KR1M 2.2 will fail again because it has no economic underpinnings.
Incidentally, what has happened to the Mara Digital Malls? Can the relevant ministry provide an update on this?
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