Cover Story


Malaysia is rich with natural resources including petroleum and natural gas, how could more than half its citizens earn below RM3000 per month? The following statistics are a clear indictment of Barisan Nasional’s failure to create a high income society.

The inconvenient truth

Behind the façade of the massive, impressive infrastructure projects favoured by the BN government is a much more modest Malaysia.


Hundreds of billions have been spent on showcase projects and masterplans but:
· 60% – of Malaysian households earn less than RM3,000 per month; · 43% – of Malaysian households get by on less than RM1,500 per month.



Of this figure, 73% – are bumiputra.


Source: Pakatan Rakyat Alternative Budget Committee







Just how unequal is Malaysian income distribution? The figures will shock you. The richest 20% of the population earn 54.3% of total income! Whereas the poorest 20% make a measly 4.4%. The national poverty rate stands at 15.5%.

Spend first, suffer later

The various cash handouts announced by Najib might create an illusion of hype, as a sudden windfall makes people forget about their miserable standards of living for awhile.

But it would be delusional to think that one-off aid could address the core issue of inequity and other structural flaws that trap the majority of Malaysians in a low-income vicious cycle.

Temporary increase in disposable cash is not a long-term solution to rein in the high cost of living. DAP publicity chief Tony Pua called the handouts in Budget 2012 “a sugar-coated placebo” as the lack of reforms will “only tax you more later.”

Actual, concrete plans to improve livelihood of ordinary Malaysians are non-existent. Mr Optimus Prime has failed to deliver help for ordinary citizens struggling to cope with inflation. Instead, mega projects are announced and crony monopolies maintained.

DAP International Secretary Liew Chin Tong criticizes this as “Bush policies in disguise”. Liew explains that Najib is employing trickle-down economics by hoping that the rich will spend and benefit the poor. Bush was criticized for shifting the burden of taxation from the rich to middle and lower-income earners.

Sungai Siput MP Jeyakumar said that a government which cares for its people

would make provisions to cushion the effects of a possible global economic slowdown instead of giving cash handouts which would not improve the standard of living of ordinary citizens. He added that workers are most vulnerable to lose jobs, houses, and incur bad debts in the event of a recession.

Blue collar blues

Malaysia’s household debt increased to 76% in 2009, which is uncomfortably close to the levels seen in the US prior to the 2008 financial crisis.
It is also the second-highest level of household debt in Asia, after South Korea.
Consumer’s Association of Penang reports that on average almost half of a household’s income goes to repaying debts.


What transformation?

DAP Parliamentary Leader Lim Kit Siang points out that BN’s inequitable and corrupt system has bred decades of injustice, inequality and exploitation. These issues are completely untouched by Najib’s 2012 budget.

Reform and transformation is clearly not on the agenda as BN continues to dole out capital to cronies while rot in the country’s structures, systems and institutions are not addressed. It is like a doctor prescribing painkillers to a patient who really needs surgery.

Meanwhile, Malaysia continues to lose out in international competitiveness and be overtaken by more countries in Southeast Asia.

The Wall Street Journal last week commented that Najib’s combination of temporary handouts and welfare spending “doesn’t help Malaysia’s competitiveness”. The US newspaper also criticised Najib for failing to follow through with promised reforms.


Plug leakage before spending

MACC – 2012 allocation increased to RM211 million

While the Teoh Beng Hock and Ahmad Sarbaini cases were unsatisfactorily resolved, MACC officers who robbed KLIA money changers of nearly RM1 million last month were merely suspended. Does MACC’s performance justify extra funding?


FBC (media company) – RM94 million After the RM77million APCO fiasco, Najib intends to rebrand himself as ‘cool’, an exercise which apparently cost taxpayers millions of ringgit.


PM and DPM’s official residences – RM12million annually


“Cool Najib” chalks up a monthly electricity bill of RM160,000 and water bill of RM66,000.
PM’s trip to Kazakhstan – RM1million That the PM’s official visit coincided with his daughter’s nuptials in the same location raised eyebrows and invited allegations of misuse of official funds.


Network Centric Operations project involving the Ministry of Defence – RM2 billion Details are sketchy on this direct award project to Sapura Technologies, will it end up as questionable as the RM1.8million spent by the Tourism Ministry on its Facebook page campaign?


Bersih rally expenditure by police and FRU – RM2million

11,000 policemen were deployed and 1,700 protestors arrested. Official government estimate of the July 9 rally turnout was 6,000.



Effective spending: making it count

BN’s crony economy must give way to a people-centric economic framework. Instead of just developing projects, it should invest in people by dealing with the following policy challenges:
Raising incomes and productivity Help workers upskill and to introduce a minimum wage to break the vicious cycle of low-wage, low-skill and low productivity;



Help industries move up the automation and mechanization curve while curbing unskilled foreign labour and increasing real wages for workers;


Curtailing monopolies, oligopolies and cartels Introduce competition in areas currently dominated by monopolies such as the rice monopoly by BERNAS, sugar oligopoly and the MAS/Air Asia airline cartel facilitated by GLCs