Malaysia praised, Singapore near bottom of pile in inequality index

Oxfam commended Malaysia for increasing the universal minimum wage to more than 20 per cent of its GDP. — Reuters pic
Oxfam commended Malaysia for increasing the universal minimum wage to more than 20 per cent of its GDP. — Reuters pic

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KUALA LUMPUR, Oct 9 — Malaysia ranked 75th worldwide in a new index by international aid agency Oxfam spotlighting government policies to reduce income disparity between the rich and poor in their countries.

Among Asean members, Malaysia was ranked the second best performer after Thailand (74th globally) while the bloc’s wealthiest member Singapore bottomed out in the Commitment to Reducing Inequality (CRI) Index 2018 released today, limping in at 149th. Only Laos ranked worse at 150th.

Singapore was also among the 10 worst performers globally in a list that included Nigeria (157), Uzbekistan (156), Haiti (155), Chad (154), Sierra Leone (153), Bhutan (152), Madagascar (151), Laos, and Bangladesh (148).

Singapore came in the bottom 10, partly because of practices which facilitate tax dodging, Oxfam said.

The agency noted that the Lion City raised personal income tax by two per cent, but capped the ceiling for its highest earners at a “very low” 22 per cent.

It added that the island state spent only 39 per cent of its Budget on education, health and social protection combined, trailing behind Thailand and South Korea which set aside half their national budget on these areas.

Singapore also has no universal minimum wage, “except for cleaners and security guards” and its salaries are discriminatory against women workers while its laws on both rape and sexual harassment are inadequate.

Oxfam said tackling inequality does not depend on a country’s wealth, but on political will.

It commended Malaysia for increasing the universal minimum wage to more than 20 per cent of its GDP, among the “dramatic increases.”

Indonesia, the third best performer in South-east Asia and ranked 90th globally, also earned praise for raising its minimum wage by nine per cent.

Oxfam noted that Indonesia’s per capita income today trumps that of the United States when the latter passed the Social Security Act in 1935 despite having some of the lowest tax collection rates in the world at 11 per cent of its GDP.

The agency noted that many middle-income countries are capable of doing more to bridge the rich-poor gap than they are currently doing, and cited Indonesia as an example.

“In Asia, Indonesia has proposed a regional minimum wage to help prevent the competition between nations that all too often results in poverty wages for workers.

“This could be even more effective if done in collaboration with workers’ representatives.”

The other Asean members listed in descending order are as follows: the Philippines (94th), Vietnam (99th), Cambodia (121st) and Myanmar (138th).

The world’s 10 best performers were all found in Europe, led by Denmark and followed by Germany, Finland, Austria, Norway, Belgium, Sweden, France, Iceland and Luxembourg.

Oxfam said inequality had reached “crisis levels”, with the richest one per cent of the global population holding four-fifths of wealth created between mid-2016 and mid-2017, while the poorest half saw no increase in wealth.

It warned of severe social economic implications globally unless governments committed themselves to bridge inequality.

“Unless they do so, the World Bank predicts that by 2030 almost half a billion people will still be living in extreme poverty,” it said.

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