Aidila Razak
Malaysiakini
Mar 23, 2013
COMMENT
Whether 41 percent or 49 percent, the numbers in the Economic Transformation Programme 2012 annual report is essentially trying to tell us this – Malaysia will reach high income status by 2020.
That gives the impression that the average Malaysian will be bringing home about RM48,000 (or US$15,000) a year by that time.
But will they? Does the average Malaysian feel 41 percent – or even the more modest 24 percent in ringgit terms – richer today compared to 2009? Are their pockets deeper?
The simple answer is no.
So is the government lying to us? Not exactly.
Let’s start with the incomes of our average households. As official data is collated and reported in ringgit terms by the Department of Statistics, the following arguments will use the ringgit.
The last survey on household income was conducted by the department in 2009. In 2009, it reported that average household income was RM4,025 per month or RM48,300 a year.
Taking into account a household size of 4.3 persons, each person in a household would bring home an average RM11,232 in 2009. Compare that to the gross national income (GNI) per capita for the same year – double the household income at RM24,879.
If Malaysians really did bring home the almost RM25,000 in income per capita, it works out to more than RM1,000 a month extra per person, enough to feed a small family. So where did that extra RM1,000 go?
Richer corporations, not richer workers
Why is GNI per capita not reflective of household income? The discrepancy can be explained in the way GNI and household income is measured.
GNI measures income from all recorded economic activity in a country plus whatever income that comes in from Malaysian entities operating abroad after subtracting income repatriated out by foreign companies operating here. Household income is measured through how much the household earns in wages, salaries, dividends, etc.
In other words, corporations and businesses may have done better and as a result the entire economy’s income is higher. But they may not necessarily be paying their workers any better, so workers may not be much richer.
Official data shows that nominal salaries grew at a slower rate compared to nominal GNI.
In the private sector, Bank Negara Malaysia observes, annual growth rate of nominal salaries in 2009 to 2012 was between 4 to 5 percent. In contrast, compounded annual growth rate for GNI over the same period, however, is 7.39 percent.
Wage data worldwide can be obtained on the International Labour Organisation’s website, but it only publishes data up to 2011.
According to the ILO, which gets its Malaysian data from the Department of Statistics, growth in nominal wages from 2009 to 2011 was 13.42 percent, lower than the 19 percent GNI per capita growth for the same period
And then there is inflation. For simplicity sake, let’s take on the ETP’s expectation that things will be about three percent more expensive every year from 2010 to 2020.
But inflation figures are measured by a selected number of goods, and is widely acknowledged to under-record the actual experience of consumers.
You may have to stretch your ringgit in other places, but if you can manage it, you’d much rather feed your baby better quality milk formula than a generic brand likely monitored for the consumer price index. Your household expenses may then grow higher than the inflation rate for the year.
Don’t forget income inequality
Taking all this into account, how much is left of your salary hike then?
You and I are not richer by either 41 percent or 49 percent. Our incomes didn’t even grow by 24 percent after the appreciation of the ringgit against the US dollar is taken out of the equation.
But it does not mean that the numbers are not kosher. What’s less than kosher, however, is using these numbers to make it seem like the household purse is getting fatter.
You and I don’t need numbers to realise that our pockets have not grown that much deeper in the last three years.
What we need, however, is a government which honestly spells out that reaching high income status would not automatically mean high income for the average Malaysian.
What we need is a government which does something to bring high income to you and me.
AIDILA RAZAK is a member of the Malaysiakini team.
the number apply only to umnoputra didahulukan pencapaian wang ringgit didahulukan. Joe public you are not included
When Najib first brought up 49% increase in GNI, I was one of the first to ask this question. But the truth is even at the best of circumstances, the answer would always be no because the world is simply Darwinian and those on top always gets a bigger piece of the pie and in our case given our GINI coefficient, its laughable to even ask.
The real reason why this issue deserved to be raised is because if Najib think he can be so smartly hypocritical, raising this points out that any Tom,Dick and Harry can also do the same AND STILL of better ethical standard than HE IS.
A PM is suppose to set a higher standard in their work than the average NOT the same level as a fake medicine seller on Chow-Kit Road.
Why is Najib AND Mahathir NOT able to get rid of Taib despite his own desire since he took office AND in the face of obvious proof? Its precisely for the same reason. Their standards IS JUST AS BAD. They are hostage to their own low standards of ETHICS and a system that indulges them..AND They are SIMPLY WRONG – this is NOT how the developed world behave. This is NOT TOLERABLE of a proper OR improving system.. THERE IS NO TRANSFORMATION. We are NOT FREE CITIZENS OF MALAYSIA still the same and slaves of cronyism and Mahathirist wrong-headedness. This country do not belong to us, it belongs to THEM..
The issue is will we change it..
The saga of Captain Caveman. It belongs to the rakyat but the rakyat are just so nice to let them be. Don’t blame them. Ask the rakyat, Bigjoe.
umnoputra didahulukan pencapaian wang ringgit diutamakan
Why Gini Coefficient Never Appear in the 2010 Census Result?
http://www.nkkhoo.com/2011/08/01/why-gini-coefficient-never-appear-in-the-2010-census-result/
One can earn 41% more compared to decades ago and feel like 41% poorer. Economic transformation policies of 5 years cannot unwind 5 decades of policies nurturing entitlement attitudes. Playing on divide & rule principles and telling one section of people that demographically could deliver most votes of perceived socio-economic unfairness that needs correction by mother coddling help from govt one creates a sense of entitlement that produces 2 results: (i) a feeling that what one has is always not enough; (ii) one is entitled wealth based on collecting rent and toll on the back of others’ working. Wealth creation based on value creation from hard work takes a back seat. There is no meritocracy to encourage competitiveness. Also the factor of corruption and leakages, every item of public use from using highway to an imported product including cigarette or milk imported, has some one collecting a toll or mark up upon it besides the State’s need to increase more and more taxes, if not direct then indirect to replenish coffers that leak.
Then we have the generation of the young. The internet and social media sites (especially Facebook) have made it very easy to see how others are living their lives and what privileges they’re being afforded, either by their wealthy upbringing or by the government’s help. There’s a lot of envy going on. To live up to Joneses they expect parents to fund their spending, sign on the credit cards, borrow to buy car and household expenses. When perception that value of money is diminishing, everything is premised upon getting more and more money to hedge against inflation & financial insecurity due to perception of tough and uncertain times ahead, you get people on the top putting principles of right and wrong aside doing all kinds of things forpersonal financial advancement, people in business risking all kinds of ventures started on hopes of financial upsides without regard to practical obstacles and risks, which when materialised leads to bankruptcy. Even those whose jobs are not risky like say marketing personnel in banks, they keep on pushing out credit to over leveraged people to meet their job KPIs and commissions causing more people to be enmeshed in debts.
Youngsters To Gain Most From Transformation Agenda – Najib. Who is your friend ? The computer. In time, one world order will emerge.
D CROOKS in S’wak n UmnoB/BNputras hv pockets deeper than 41%; CORRUPT is their middle name
Depends on how you manage your money. Where you live.
///After lifting the ban on Hindraf, the premier now wants to meet them ahead of dissolving Parliament.///–Malaysiakini
The best Hindraf can get is to be called bumiputras. There are Malays who are bumiputras who want change. Is Hindraf satisfied with the crumbs? Before that Hindraf may want to learn from the Suqiu group and be briefed on how they were fooled.
If Indians are happy that they get 3% of whatever share, it means that they are happy to have human God in the form of the PM. Why don’t they ask to be treated fairly? Whether they would get more of less than 3%; at least they are rewarded for their effort.
Najib still plays the divide and rule, and only Hindraf seems not to know. Maybe Hindraf leaders also plays MCA game, where the leaders are rewarded for selling the race.
No!!
Recently, I lost a number of coins because my trouser pockets are full of holes!
Truth be told, I can’t even afford new pants.
Hindraf belum kena, belum tahu; sudah kena, baru tahu – but then too late lor
Of cos, NR n UmnoB/BN will promise Hindraf anything n everything b4 GE13 to buy their souls n votes
After GE13, who knows, Hindraf will again b declared an illegal entity: REWARD, JAILed
Exactly! It is the pocket that get 41% deeper, not the income that pocketed.
And najib is telling the world, we have the deepest pocket in the world, so what? Look at reality of ground, 500 brim, 900 min wage, najib’s fear of election,…. all these tell us, najib is lying thru his teeth.
Minister in PM Department and Pemandu CEO Idris Jala claimed the so-called ETP would triple the country’s GNI from RM660 billion to RM1.7 trillion with Malaysia’s economy set to jump to a super-impressive level in just another 10-year, thanks to an economic road map involving investments of about US$444 billion (RM1.3 trillion) to power the country towards becoming a high income economy by 2020. Provided you believe this is not another one of those gimmicks to create feel-good factors before the next snap election, that is. It was definitely an award presentation by Idris with all the acronyms such as ETP, GTP, NKEA, NKRA, SRI, NEM and whatnot thrown in. The Wish List presented includes:
1. The country’s GNI would grow at 6% annually and set to hit US$523 billion by 2020 from US188 billlion in 2009 – that’s a whopping 178% improvement “wow”
2. GNI per capita will jumped to RM48,000 by 2020 from RM23,700 in 2009
3.Estimated new jobs creation – 3.3 millions. etc..
Some of the hidden problems the government would not share with us:
1. The projected 6% annual growth rate for 10-years did not take into consideration the possible recession or slowdown within the period. The country has never experience annual growth rate of more than 5% from 2000 to 2010.
2. The plans did not take into consideration of currency fluctuation although the ringgit has strengthened against the dollar recently.
3. The government inefficiency in fighting inflation and almost all the time the inflation figure released were cosmetic job to the taste of the government. Even with the strength of the ringgit now, the prices of consumer goods have actually gone up instead of going down.
4. Not much has been said about preventing brain-drain, one of the most important factors in driving the so-called ETP.
5. The question of leakage in any government projects. RM1.3 trillion, mind you!
Nope.
I think most private sector employees had salary adjustments of at most 5% each year over the three year period but this was negated by run-away inflation, especially over the past few years. 30 years ago, a fresh grad was paid around RM1200 to RM1500 per month. Today the pay has probably doubled but during the same period the cost of food, lodging and transport has probably tripled while residential property prices have sky rocketed many times.