On the Pemandu whitewash

It is clear that we do want a high-income nation by the year 2020, as set in the 1990s by Tun Dr Mahathir Mohamad as part of a greater vision of our country’s future.

On August 23, Performance Management and Delivery Unit (Pemandu) CEO Datuk Seri Idris Jala said that the gross national income (GNI) per capita has climbed steadily.

He says Malaysians are making close to US$10,000 in 2013 compared with some US$7,000 in 2009, a growth of 42.5%.

But again, what exactly does this mean?

And furthermore, are the prices of goods and the cost of living in tune with this increase in income?

What Idris is not telling everyone, or not even bothering to mention, is the fact that while GNI is up, employees will not be seeing a similar raise in income. In fact, good luck on trying to tell your bosses that your paychecks should be increased in the same manner.

The truth is that Malaysians are grossly underpaid in Malaysia. In 2011, our aggregate household income is only 46%, whereas member states of the Organisation for Economic Cooperation and Development (OECD) average at about 70%.

While Minister in the Prime Minister’s department Datuk Seri Abdul Wahid Omar is saying that our gross domestic product is showing a stellar 6.4%, it also does not reflect in salaries and wages. This is because most of our GDP is in business profits, not in tax and subsidies or even wages.

In developed nations, the wage share in GDPs range between 45% and 60%. Let’s look at a close example.

In Singapore, for every dollar they make as a nation in 1997, their employees get 42 cents, businesses get 47 cents and the government gets 11 cents.

In Malaysia in 2005, for every ringgit the nation makes, Malaysian employees only get 28 sen, the company gets 67 sen and the government gets 5 sen.

In other words, not only are Malaysian companies paying less in taxes, they are paying less in wages as well compared to our sister down under some 17 years ago.

We have asked the government about this, and the last time we asked the minister for international trade and industry (MITI) about this figure, he says that now Malaysians are earning 30 sen, up 2 sen.

Well, rejoice. I guess we can all just retire peacefully now, can we?

This is the major problem that we have right now. It is a symptomatic one with Malaysian corporations, a point that Idris Jala does not have in his report cards. Now, in order to achieve this high-income nation that Idris Jala is driving about, what would that mean if this continues?

It would mean that Malaysians would be pressured to earn higher by making company profits go up so that their salaries, which is 28 sen to the ringgit, goes up with it.

And with that pressure, and continued unemployment of fresh graduates, what we will see is a country that will slowly but surely see stress related issues come to mind.

We are talking about increasing mental illnesses and depression, stress related illnesses, worst case scenario even an increase in cases of suicide.

In addition, there will be more slums due to increasing cost of living within urban areas, an increase in crime and the establishment of even more red light districts to relieve stress and pressure.

But the bigger problem for Idris is this. Most of the economic transformation programmes (ETPs) are focused in the urban areas.

As such, how will the rural areas cope with this growing disparity of wealth?

Here lies the major issue with us Malaysians as well. While we can talk about how the economy is doing better as a whole, does it reflect on the ground in Kelantan, Terengganu, Sabah and Sarawak?

These are states where their local population are living on average lower than the rest of Malaysia.

So, what is being done to transform their economies to the same level as ours?

The minimum wage policy is one measure to ensure that Malaysians can survive, but is earning some RM800 in this day and age truly reflective of the cost of living?

It is not. Neither is it fair for companies to earn 67 sen to a ringgit while employees get 28 sen.

This is why the government wanted to introduce the goods and services tax (GST), not so much that the country is bankrupt, but more so that there are people in this nation dodging taxes like bullets in The Matrix.

Idris and Pemandu needs to understand that while a high-income nation is a great idea, but in the end, if it leads to an increase in slums, red light districts and a metropolis with suicides taking place each day, perhaps the driver needs to consider other factors that lie in wait. – August 26, 2014.

*This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.