Closing the wealth gap – Sin Chew Daily

The recent controversies around our overdependence on migrant workers should offer the policymakers, local businesses as well as the public an excellent opportunity to reflect on ourselves how we are able progress steadfastly towards our ultimate goal of a high-income developed nation.

Malaysia's 2015 Millennium Development Goals Report showed that wealth disparity among Chinese Malaysians was way more serious than that of the Indians and Malays, based on the 2014 Gini Index figures.

The Gini coefficient for Chinese Malaysians was 0.405, higher than the 0.389 for Malays and 0.396 for Indians.

Geographically, the capital city of Kuala Lumpur registered a Gini coefficient of 0.407, higher than the national average of 0.401.

Gini coefficient or index is used to gauge the income distribution of a nation or area.

The higher the index, the more unequal in income distribution.

Normally a coefficient of 0.400 is seen as a "warning level".

So, what has actually caused the wealth inequality among Chinese Malaysians?

The report did not elaborate further on this although a more comprehensive analysis is essential so that the local Chinese community could understand the situation better.

However, the report pointed out that Malaysia had drastically reduced the levels of abject poverty and starvation over the years, with the poverty rates of all ethnic communities more than halved from 1999 to 2014 while the the wealth gap between urban and rural Malaysians was closed.

The report also highlighted the fact that the country had fulfilled its eight major goals, including the reduction of hardcore poor although there was still room for improvement.

As such, the country must strive to address the many problems encountered by the underprivileged and low-income groups.

The mounting inflationary pressure, sluggish rise in income and sense of insecurity towards the economic situation have all become common problems many Malaysians have to encounter, and such negative sentiment could have a significant bearing on our social development.

Notably, the middle and low income groups have grown increasingly frustrated with the overconcentration of wealth in the hands of the elite few, misappropriation of public funds and unequal chances for promotion.

Perhaps many have got themselves confused between social inequality and the overall economic environment of the country, and have consequently become discontented with the authorities.

Gini index is not the only barometer to gauge wealth distribution, which can also be deduced from our observations of market activity such as trends in the housing and automobile markets, or the consumerism patterns of individuals from different income groups.

Judging from the statistics alone, Malaysia's income disparity might have closed somewhat, but the phenomenon of inequality is still very much evident if we were to inspect from other angles.

The report said the impact of GST was biggest to the bottom 40% household income group (B40).

Although the incomes of these households have increased steadily over the years, their expenses have expanded at even faster rates.

Moreover, the liabilities of B40 group are seven times their annual household incomes.

The government must help this group of people improve their livelihoods by way of more effective and appropriate measures.

Instead of giving them a fish, perhaps the government should consider teaching them how to fish, and supplement their incomes.

The recent controversies surrounding our overdependence on migrant workers should offer the policymakers, businesses and general public a unique opportunity to reflect on ourselves how we can progress steadily towards the ultimate goal of a high-income developed nation. – mysinchew.com, February 29, 2016.

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