OCTOBER, 10 — Last Saturday, Shared Prosperity Vision 2030 was launched by the prime minister. This vision signals a new era in Malaysia’s economic policy, where inclusivity and sharing the economic pie become the main focus, vis-à-vis growing larger economic pie as envisioned previously.
This newly launched Shared Prosperity Vision 2030 put great importance in reducing income inequality, while at the same time encouraging fair and inclusive wealth distribution to targeted groups.
Unfortunately, there has been limited discussion on geographical income disparities, despite the glaring importance. In order for Malaysia to move forward as a high-income nation, the state-inequality that is slowly turning to be evident needs to be acknowledged and curbed.
Khazanah Research Institute in their recent report “Demarcating Households: An Integrated Income and Consumption Analysis” highlighted that in eight states, the B40 group dominated half of the total households. These states are Perak, Sarawak, Kedah, Sabah, Kelantan, Pahang, Terengganu and Perlis.
Report of Household Income and Basic Amenities Survey (HIS) 2016 by Department ofStatistics Malaysia outlined the huge gap of household income between states. For instance, the median monthly household incomes for Kelantan and Kedah are RM3,079 and RM3,811 respectively, in contrast to the median national household income of RM5,228.
On the other hand, Putrajaya, Kuala Lumpur and Selangor ranked at the top, with median household incomes of RM9,073, RM8,275, and RM7,225 respectively. Unsurprisingly, these states constitute the least proportion of B40 group.
In discussing the matter of inequality, the government seems to be missing that it can be largely associated with uneven development across states. In the past years, we have only seen major developments taken places in the cities. In contrast, basic amenities in other states are not being taken care of.
Ironically, the government has allocated huge sum every year to bridge the urban-rural development gap, yet the results of these investment remain questionable. Basic amenities in rural areas are yet to be improved.
HIS 2016 found that some states were lagging in some areas of basic amenities. For example, only roughly 55 per cent of rural household in Kelantan, and below 65 per cent of rural household in Sabah and Sarawak had access to pipe water.
With lack of development and limited economic opportunities, this contributes to a large share of B40 outside the cities. If this prevails, the community is most likely to fall into the vicious cycle of poverty. Consequently, the poor will remain poorer.
Budget 2020 should be aligned with government vision of Shared Prosperity 2030.
Government should acknowledge and take action in mitigating state-inequality. A significant amount from the budget should be allocated for infrastructure development in other states that desperately need advancement too.
Instead of spending a large amount in investing into mega projects, the government should shift its focus in providing basic amenities and infrastructure to the rural areas to ensure Shared Prosperity vision is achieved.
* Izzura Izhar and Mohd Ariff Mohd Daud are with the Institute for Research and Development of Policy (IRDP).
** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
