Can you survive in Malaysia on RM800/month?

Inclusive growth is the need of the hour

Commentary Written by R B Bhattacharjee of theedgemalaysia.com Thursday, 30 August 2012 11:38

Sovereignty is indeed cherished by all peoples and is an attribute that acquires renewed meaning around Independence Day. In order to appreciate the feeling of freedom that belongs to an independent nation, it only takes a simple comparison between Malaysia’s situation and the struggles of subject people elsewhere to be free of domination, a phenomenon which is seen in quite a few nations in Southeast Asia, and certainly in other regions around the world.

However, it is also inevitable that the sense of freedom that belongs to a sovereign people becomes a little muted after many decades, as the independent status of the nation is taken as a fact of life.

After 55 years of Independence, this may be somewhat true of Malaysia, where about 88% of the population have been born after Merdeka and have not experienced the realities of life as a subject citizenry.

For the record, this percentage is just a little lower if the formation of Malaysia in 1963 is taken as the reference point, in view of the relatively sparse population in Sabah and Sarawak.

In this context, the focus tends to fall on the achievements of our independent nation, such as the fruit of economic development and the prominence of its citizens in a variety of fields, including sports, business, education, diplomacy, the arts and many things besides.

There is no doubt a long list of accomplishments that can and have been paraded in terms of our progress in socio-economic growth, physical development, financial performance and socio-cultural transformation, to signal some of the key indicators that can be used to map the nation’s progress.

Iconic developments like the Petronas Twin Towers, for a while the tallest building in the world, have put us on the global map, while the opulent design of Putrajaya stands as a symbol of the nation’s wealth, if we are inclined to measure prosperity in these terms. And of course, the North-South Expressway and the many other well-travelled tolled highways are testimony to the transformation that has taken place in our lifestyles compared to the early days of our nationhood.

Yet, the picture would not be complete without a balancing view of the gaps in Malaysia’s progress report. If we care to look beneath the veneer of our apparent prosperity, there are deeply disturbing signs that the distribution of wealth is very uneven.

More pressingly, the numbers of the poor and disadvantaged in our midst indicate that something is seriously wrong with the mechanisms of economic management that have allowed these socio-economic imbalances to grow to their current state.

A major sticking point is the basis for the Economic Planning Unit to report that the incidence of poverty had declined to 3.8% of households in 2009, according to the current available data, down from 49.7% in 1970.

This is based on a poverty income line (PIL) of RM800 for the country or RM763 for Peninsular Malaysia.

This figure has been criticised as unrealistic by many opinion leaders, notably social activist Jayanath Appudurai and prominent economists, including Tan Sri Ramon Navaratnam and Dr Lim Teck Ghee.

As Jayanath points out, the poverty income level is an income that is necessary for a household to meet its nutritional needs and other basic necessities like clothing, rent, fuel and utilities, transport and communications, medical expenses, education and recreation.

For an average household of 4.4 persons, the RM763 used as the PIL works out to RM5.80 per person per day — clearly an impossible feat even in a rural environment. Consequently, the calls to address the growing issue of poverty and income disparity are becoming increasingly frequent. This month alone, at least two significant initiatives have surfaced.

In mid-August, the Centre for Public Policy Studies, which Navaratnam heads, called for a new ministry or agency to be established that would address the concerns of the bottom 40% of households.

He noted that the rising inequalities in society, deprivation, sense of hopelessness in the face of inflation and crime are negatively impacting the low income group, especially the urban poor living in low-cost, high-rise flats in urban centres.

Almost in tandem, two civil society groups presented a Draft Social Inclusion Act (SIA 2012) “that offers our society probably the most durable passage out of abject poverty and marginalisation”.

In their media statement, the Saya Anak Bangsa Malaysia group, represented by Jayanath, and the National Human Rights Society (Hakam), represented by lawyer Malik Imtiaz Sarwar, pointed out that 42 years after the Rukunegara was adopted, the vision of achieving a just, equitable and inclusive society enshrined in the charter has yet to be achieved.

Malik said the underprivileged are trapped in an inter-generational cycle of poverty and inequality that require long-term solutions, while Jayanath pointed out that the bottom 40% of households have an average monthly income of RM1,529 compared with RM10,208 earned by the top 20%.

Complicating the picture is the entrenched race-based political culture, which affects all aspects of the people’s lives.

To break free of the politics of ethnicity that the country is trapped in, the draft Act proposes the establishment of a Social Inclusion Commission directly answerable to Parliament and given the mandate to oversee all matters related to poverty reduction, affirmative action and social inclusiveness.

Another dimension of the divide between the haves and have-nots in Malaysia is the relative under-development of Sabah and Sarawak despite being rich in resources. A World Bank study in late 2010 hit home the point that Sabah is the poorest state in the country, with Sarawak not far behind. This situation is proving to be a cause for growing disaffection against Putrajaya and cannot be disregarded as a cause of future tension within the federation.

As we celebrate Merdeka Day, it is worth reflecting that the complicated issues arising from the income disparities among the population point to the need for a fresh approach to the delivery of economic justice to its disadvantaged groups.

However, given the political challenges facing the government with the coming general election, it may be rather difficult for its leaders to focus their minds on this burning issue.

R B Bhattacharjee is associate editor at The Edge.

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