1. First of all, I would like to congratulate the organizers for having this forum at a very opportune juncture in our history. Our country faces new challenges as we approach the year 2020 and we will pay close attention to the upcoming 11th Malaysia Plan that is supposed to take us to the status of a developed country in 5 years’ time. But at the same time, we need to remind ourselves that the problems of poverty and inequality are still very much present in our midst despite the many self-congratulatory statistics that are being used by the government to highlight our many so called ‘achievements’.
2. The gap between not just the ‘haves’ but the ‘have-a-lot’ and the ‘have-nots’ could not have been in starker display in our country in the past three months. While low income families have been struggling to cope with the increase in the price of petrol, electricity and other basic necessities, billions have been squandered by politically connected individuals on expensive champagne in Las Vegas, penthouses and mansions in New York and Beverly Hills, round the world shopping trips and partying with Hollywood celebrities. While some shopkeepers, especially from the older generation, have been forced to close their business because they cannot cope with the introduction of the Goods and Services Tax (GST), our First Lady of Malaysia hopes that the GST won’t increase the price of her RM1200 hair-dye house call. While the average Malaysian is worried about the increase in the toll charges, taxi and bus fares, the Prime Minister’s Office goes out to spend almost half a billion ringgit on a new plane!
3. According to the Economic Planning Unity (EPU), Malaysia has almost ‘solved’ its poverty problem. The poverty rate in the country was a mere 1.7% in 2012. And according to the preliminary results from the 2014 Household Income Survey, the average household income has reached RM5900, up 18% from RM5000 in 2012.
4. And yet, these gaudy statistics do not reflect the reality on the ground. How many people in this room, for example, have seen their salaries increase by 18% in the last 2 years? As elected representatives, many of us still meet a large number of individuals and families who cannot make ends meet and who require our assistance. These include single parent households, the disabled and those with family members with a serious illness. The urban poor, especially among the Indian communities which have been displaced from the rubber plantations and estates are especially vulnerable when it comes to family illnesses and accidents significantly affecting their income earnings.
5. In Sarawak, where the official poverty rate has fallen to a mere 2.4% in 2012, we still observe many longhouses in the interior areas with no electricity or water supply. Many Dayaks and other native Bumiputeras barely eke a subsistence living from selling agricultural produce in their family farms or ‘kebuns’. In Sabah, the incidence of poverty fell by a remarkable 11.1% in 3 years, from 19.2% in 2009 to 8.1% in 2012. And yet, anyone who has driven through the urban slums and travelled through the remote highlands of Sabah would find it hard to believe that only 92% of households in the state earns more than the Poverty Line income of RM1090 a month.
6. Among the Orang Asli, it is estimated that their poverty rates was as high as 50% in 2009. Less than 10% of the Orang Asli population graduated from secondary school, according to 2009 estimates.
7. The disconnect between government statistics and the hardships felt by the people on the ground was in stark display in the Bantuan Rakyat 1 Malaysia (BR1M) handouts. For example, 5.2 million households or 80% of total households received BR1M 1.0 when it was first given out in 2012. While some of this may have been overpayment to ineligible households, nevertheless, it should be tremendously worrying when 80% of households were given financial assistance in a country where the average household income was RM5000 in 2012.
8. While the middle class and the poor are being squeezed as a result of stagnating wages and increases in the cost of living, the rich continue to enjoy the lion’s share of the country’s economic wealth. The total wealth of the top 40 richest Malaysians to the total GDP increased from 15.7% in 2006 to 22.4% in 2012. The comparable figure in the United States was only 4.8% in 2012. In other words, in a RM1 trillion economy, which was achieved in 2014, the total wealth of the top 40 Malaysians would add up to RM400 billion. On the other end of the spectrum, 26% of Malaysians have zero property assets in their name.
9. The reality on the ground clearly shows that we still have to focus on poverty, especially relative poverty, which still affects a significant number of Malaysians. At the same time, we cannot forget that inequality, not just in terms of income, but also in terms of wealth, is still a very significant challenge in present day Malaysia. The issue of inequality is even more prominent today due to the widespread availability of information and increased urbanization which shows the stark differences between how the ‘have-a-lot’ live compared to the ‘have-nots’.
10. Many people still think of inequality in racial terms where some communities are perceived to be more affluent than others, across the board. But according to the UNDP’s inaugural Malaysia Human Development Report 2013, inter-ethnic i.e. between races inequality has been steadily decreasing since 1970. In fact, by 2009, inter-ethnic inequality only contributed 4% to the overall level of inequality. This means that present day inequality is almost entirely explained by intra-ethnic inequality. In layman’s terms, this means that if a Malay or Chinese or Indian with a university degree will have a higher salary compared to a Malay or Chinese or Indian with only an SPM qualification. In other words, factors such as family background, level of education, where one is staying, matter more to one’s earning ability compared with one’s race.
11. What this means is that we need to focus on these factors in order to raise the incomes of those at the bottom of the economic ladder and decrease inequality. We need not only to examine the inequality in outcomes in terms of wages and wealth but also the inequality in opportunities which causes the inequality in outcomes.
12. One has to begin with inequality in educational opportunities in order to address inequality in outcomes. Without access to quality education, one’s access to stable and well-paying jobs with a good career progression are immediately limited. It was estimated that in the United States, the difference in lifetime earnings between someone with a university degree and someone with a high school qualification was US$830,000.
13. In Malaysia, as the overall workforce gets more educated, those who fail to obtain a post-secondary education often get left behind. Concrete steps need to be identified and implemented in order to decrease the drop-out rate post-Form 3 and post-Form 5. The number and accessibility of post-secondary education opportunities need to be increased especially for marginalized groups. Options for retraining and up-skilling have to be made available for those without post-secondary qualifications who are already in the workforce. Adequate resources need to be increased in order to achieve these goals.
14. But it is not only the education system which is important in determining educational outcomes. The living environment for marginalized groups need to be made more conducive to encourage positive learning outcomes. This means that existing low cost public housing needs to be upgraded and new lost cost public housing must be designed with adequate public spaces and facilities including libraries and learning spaces.
15. The existing BR1M cash transfers should also be redesigned into conditional cash transfers (CCT) in order to provide incentives for children of poor families to remain in school. Special scholarships for children from low income families to pursue post-secondary education opportunities should also be provided. Other welfare and employment schemes such as Singapore’s ComCare Transition Scheme to reward low income wage earners to continue to work should also be considered.
16. Thus far, I have not made any mention of the specific problems faced by the Indian community or the “Indian Question”, which is one of the main topics of discussion in this forum. This is not because I have forgotten the promises made in the 2013 Gelang Patah declaration to the Indian community in Malaysia. But rather, I choose to focus on the problem of poverty and inequality which affects all communities in Malaysia, including the Indian community.
17. That being said, it cannot be denied that the marginalized groups in each community faces their own set of challenges and unique circumstances in their fight against poverty and inequality. Therefore, specific policies must be outlined in order to identify the most effective way of eradicating poverty and reducing inequality for each of these marginalized groups. This is where this forum can make its unique contribution.
18. The problems and challenges faced by the Indian community are not new. Problems of statelessness, lack of documentation, poorly funded Tamil schools, lack of proper housing for ex-estate workers and their families, over representation in gang related activities, the lack of good job opportunities, are but some of the challenges.
19. Some of the solutions have been identified in the Gelang Patah Declaration such as the assurance that all National School Type Tamil schools become fully funded and the infrastructure of every single Tamil school is up to par with Sekolah Kebangsaan and to invest in technical and vocational training coupled with apprenticeship programs to provide an alternative education and career path for school drop outs from low income Indian families. But more solutions and ideas can and must be identified.
20. The creative ideas and specific policy proposals on the challenges of inequality in Malaysia, and in particular, the unique problems faced by the Indian community in Malaysia which have been thrown up at this Conference, with the expertise of Tan Sri Datuk Dr. Kamal Salih, Datuk Dr.Denison Jayasooria and Dr. Lim Teck Ghee as resource persons, will be useful and timely inputs in the current debate on the 11th Malaysia Plan which is presented to Parliament in May.
21. I will like to end by calling on the Prime Minister, Datuk Seri Najib Razak to depart from past parliamentary practices of tabling the 11th Malaysia Plan in Parliament a few days before the actual debate. Let there be a full national debate to precede the parliamentary debate, which will be able to benefit from a national discussion on the 11th Malaysia Plan. Parliament will meet for 16 sittings from Mayt 18 to June 18. I call on the Prime Minister to make public the 11th Malaysia plan by middle of April to allow for a full month of national dissection, discussion and debate of the 11th Malaysia Plan before Parliament debates the next five-year plan which will end with the 30-year Vision 2020.
[Speech when closing the Conference on ‘11th Malaysia Plan (11MP)—Inequality in Malaysia and Challenges for the Indian Community’ at the Shah Alam Convention Centre on Sunday, 22nd March 2015 at 4 pm]