Economist pans revival of Najib-era KR1M stores

An economist has dismissed a suggestion to revive the Kedai Rakyat 1Malaysia (KR1M) initiative established during former prime minister Najib Razak's administration.

Speaking to MalaysiaNow, Carmelo Ferlito expressed scepticism about the proposal, citing the initiative's past ineffectiveness.

"This has to be expected. Economic activities, to be successful, must respond to market stimuli and, in particular, to price signals," said Ferlito of the Institute for Democracy and Economic Affairs.

Previously, it was reported that Deputy Domestic Trade and Cost of Living Minister Fuziah Salleh would study the proposal, with plans to implement it through a strategic partnership with the Rahmah Sales initiative.

Umno Youth chief Dr Muhamad Akmal Saleh, meanwhile, urged the government to revive Najib's initiative following the recent hike in the price of goods, especially essential items.

"Today, many have come to realise that these establishments are the ideal choice for the people in Malaysia.

"Hopefully, the current administration will reintroduce similar outlets, catering exclusively to the needs of Malaysians," the Merlimau assemblyman said.

The KR1M initiative was launched in 2011 during Najib's administration to allow low-income groups to obtain cheaper groceries.

The government-owned chain of convenience stores was closed in 2017, six years after its launch, due to the termination of the contract with its operator, retail chain Mydin.

Najib then announced the KR1M 2.0 initiative during the tabling of the 2018 budget.

Pakatan Harapan, which formed the federal government in 2018, had reviewed the need for the stores.

Mydin managing director Ameer Ali Mydin previously criticised the initiative, saying that he suffered losses of over RM100 million while managing the first KR1M project. 

He described the KR1M 2.0 project as "a joke".

Ferlito, meanwhile, said that the price of any item is determined by the market and cannot be set by authorities.

"Political prices, technically speaking, cannot be defined as prices, and therefore they fail to exercise their information transmission function.

"This makes it impossible to know what to sell, in what quantity, and at what price. Technically speaking, it cannot work."

Ferlito also said that while inflation is moving slowly, that does not mean the prices of goods are going down.

He added that prices are currently moving towards "normal".

"As inflation in most cases is government-driven, what should be done is to limit the discretionary power of the government over the creation of inflation."