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Reducing Absolute Poverty Levels Should Not Blind The Government To The Failure To Prevent Malaysia With The Worst Income Disparity Between The Rich And Poor In South-East Asia Press Statement by Lim Guan Eng (Petaling Jaya, Wednesday): Housing and Local Government Minister Datuk Seri Ong Ka Ting statement of the reduction of the poverty rate in the country from 49.3 % in 1970 to 5% in 2002 should not blind the government to its failure to prevent Malaysia from its unfortunate achievement of having the worst income disparity between the rich and poor in South-East Asia. Ong said that in 1970, 58.6 % of families in rural areas and 24.6% in urban areas lived under the Threshold Poverty Line Income(TPLI). TPLI was RM 529 in Peninsular Malaysia, RM600 in Sarawak and RM 690 in Sabah. In 2002 the rate was 11.4% for rural areas and 2% for urban areas, an improvement when 60& of the country’s population lived in urban areas. However such improvements ignore two important indicators, one absolute and the other relative. In absolute terms, the present TPLI is too low and should be in fact doubled as for one family in urban areas to subsist at RM 529 per month with high rentals and living costs is just not practicable. A family in Kuala Lumpur or Johor Baru with an average 4 children on RM 530 is in practical terms living in poverty even though it may not be considered living in poverty for academic purposes. TPLI should be increased to reflect the high cost of living in urban centres. More importantly, absolute poverty figures ignores the unfair distribution of the country’s wealth between the few who are rich to the many who are not. In the report by the latest United Nations Human Development (UNHDP) Report 2004, Malaysia has the worst income disparity between the rich and poor in South East Asia, higher than Philippines, Thailand, Singapore, Vietnam and Indonesia. The UNHDP Report 2004 shows the richest 10% in Malaysia controls 38.4% of our economic income as compared to our poorest 10% controlling only 1.7%. This compares unfavourably with Singapore’s richest 10% controlling 32.8% of economic income as compared to its poorest 10% controlling 1.9% of economic income. We can be proud of reducing absolute poverty levels but we should equally be ashamed that Malaysians have the most unfair distribution of wealth in South-East Asia(see table below). Such unequal and unfair distribution of wealth is caused by BN’s pro-rich economic focus of producing more bumiputra millionaires instead of creating wealth that can be enjoyed by all Malaysians. This policy failure is morally wrong as highlighted UMNO Vice-President and Melaka Chief Minister Datuk Seri Mohd Ali Rustam in the Melaka State Assembly on 26 October 2004. The Melaka Chief Minister proudly measured the success of his economic management in the state from 1999 with 10 bumi millionaires created by him which was preferable to creating 100 middle-class bumis with RM 100,000/-. When DAP Melaka Assembly State Opposition Leader Betty Chew asked whether it is better to have 1,000 Malaysians with RM 10,000 instead of only 10 persons sharing RM 10 million, the Melaka Chief Minister preferred the 10 millionaires to the 10,000 ordinary Malaysians. It is morally wrong to help create the few who are rich at the expense of the many who are poor. This is the integral difference between DAP and BN social and economic policies- BN is interested in creating more millionaires whereas DAP focuses on creating wealth for everyone, especially the poor. The success of BN’s economic policy of creating millionaires can be seen when the richest 10% of the population is 22.1 times richer than the poorest 10%. Prime Minister Datuk Seri Abdullah Ahmad Badawi should prove his commitment towards economic justice by creating and distributing wealth for all The generous terms given to Projek Lebuhraya Utara Selatan allowing it to increase the already high toll rates by 10% every three years apart from the hundreds of million of ringgit of compensation received is one example of crony capitalism. PLUS made RM 760 million in 2004 before the toll increase and will add an extra RM 154 million from the 10% toll hike to record a RM 937 million profit in 2005. Despite such huge profits not one cent goes to Malaysian taxpayers as PLUS is exempted from the 28% corporate income tax. Additionally, interest payments is waived for PLUS RM 1.65 billion loan from the Malaysian government One company’s interests is more important than the welfare of 25 million Malaysians. Economic wealth should be distributed to all deserving Malaysians who work hard and not to produce the few millionaires, whether bumi or non-bumis, who are beneficiaries of crony capitalism. Clearly the UNHDP 2004 Report validates DAP’s fears that under the BN’s crony capitalism, in relative terms the rich has become richer.
UNITED
NATIONS HUMAN DEVELOPMENT REPORT 2004
(2/2/2005) * Lim Guan Eng, DAP Secretary-General |