ANALYSIS
On December 17, 2010, Mohamed Bouazizi, 26, a street vendor who was originally from a village, set himself on fire outside the governor’s office in Tunisia.
Despite the difficulties he encountered in life, according to the media reports, he was always keen to help others, often helping other poor families.
However, it was reported that he was targeted and harassed by police officers for years, and frequently had his produce confiscated.
According to a news report, he left his education in his early teens in order to provide for his family.
Frustrated at being unable to earn enough money for his family, he took a drastic action which gradually sparked protests against poor economic management and political autocracy.
In Tunisia, popular demonstrations led to President Zine El Abidine Ben Ali stepping down after 23 years of rule.
Bouazizi died 18 days after the incident but his action triggered demonstrations and protests not only in Tunisia but also in Egypt.
Bouazizi’s self-immolation is a manifestation of social and economic inequality. His case should by an eye opener for us in as far as wealth distribution and economic gap is concerned.
Prime Minister Tun Dr Mahathir Mohamad has stressed the importance of equal wealth distribution among all races in the country.
He said countries with obvious gaps between the poor and the rich had ended up in riots.
“That’s why we need to focus on tackling the social poverty of all races,” he said in an event earlier this year.
“It has become our duty to distribute the wealth equally or at least to a level accepted by all communities,” he said.
Economic inequality is a dangerous phenomenon, thus effective long-term and short-term strategies should be formulated by the Pakatan Harapan (PH) government to reduce the gap.
Here I would like to borrow the wise words of the General Secretary of the International Trade Union Confederation (ITUC) and a former president of the Australian Council of Trade Unions, Sharan Burrow, regarding the negative effects of inequality.
The first woman to become General Secretary of the ITUC since its inception in 2006 said, “Inequality is a poison that is destroying livelihoods, stripping families of dignity, and splitting communities.”
Without a doubt, Malaysia has made great strides in reducing economic inequality and poverty over the last five decades but there is still room for improvement.
The Gini co-efficient, which measures income inequality in the country, had declined from 0.513 in 1970 to 0.399 in 2016.
This means there was an improvement in income inequality in Malaysia over the past 46 years.
Malaysia’s Gini has fallen from 0.513 in 1970 to 0.399 in 2016. A Gini of zero means everyone is earning the same amount.
According to a study by Khazanah Research Institute (KRI) the income gap between the rich, middle class and the poor in Malaysia has widened since 2008.
Khazanah Nasional Bhd noted that the gap in the real average income between the top-20 per cent households (T20) and the middle-40 per cent (M40) and bottom-40 per cent (B40) households in Malaysia has almost doubled compared to two decades ago.
The report highlighted that in 2016, households with income below RM2,000 per month spent 94.8 per cent of their incomes on consumption while families earning above RM15,000 monthly spent only 45 per cent of their incomes on consumption.
“Worryingly, for households earning below RM2,000, the income remaining after accounting for inflation is only RM76 in 2016, reducing from RM124 in 2014,” the report said.
Therefore, this left them vulnerable to sudden financial shocks or unforeseen circumstances.
“In the past two decades, the actual differences in household income, adjusted to inflation, have almost doubled between the top 20 per cent households (T20) versus the middle and bottom 40 per cent (M40 and B40) households, respectively,” it added.
In fact, the gap between the rural population and its urban counterpart has not ameliorated.
This phenomenon should not be taken for granted because if left unchecked it can turn into a ticking social time bomb. We don’t want another Bouazizi in Malaysia.
Social cohesion and stability are the bedrock of economic growth and prosperity, and we can’t another ethnic or social riot in Malaysia.
Although the government has repeatedly boasted of eradicating hardcore poverty, relative poverty has increased by more than 50 per cent to three million households since 1995.
Relative poverty is defined as earning less than 60 per cent of the median income.
This means some 40 per cent of the country’s 7.5 million households are relatively poor.
PH in its manifesto before the last general election promised to share the nation’s wealth in a targeted and equitable way.
According to the manifesto, our country’s economic growth does not give equitable benefits to the citizens. The rich are getting richer while the middle and lower classes continue to be under pressure.
It also realised that the increase in median wage level of Malaysians has been too low whereas the number of people earning below RM2,000 per month is too high.
PH promised to correct these issues immediately but did it take steps to fulfil the promises? What are the concrete strategies taken so far to address the inequalities?
Or were the narratives on reducing economic inequalities only political propaganda and rhetoric just to win the hearts and minds of voters before the GE14?
“The nation’s wealth is being monopolised by just a few political leaders, their wives and children. They live lavish lifestyles while the people struggle to cope.
The Pakatan Harapan government will ensure our nation’s wealth is shared more equitably by the Bumiputeras and every citizen regardless of race and religion, including the Indians and the Orang Asal,” the manifesto promised.
“The B40 group is already facing a difficult life. But the M40 is facing hurdles too. Both groups will receive targeted help from the Pakatan Harapan government.”
On close scrutiny, the inequality remains stubbornly high among the Bumiputeras if PNB’s annual report about the average investment is to be used as a barometer.
According to the annual reports, the average investment of Bumiputera investors stands at RM14,097 per person as at the end of 2012. This figure is actually misleading as at a glance it suggests that many Malays have attained significant savings, but upon closer inspection, it tells a different story altogether.
Bumiputera unit-holders actually have an average investment of a mere RM611 per person. It is only the top quartile of Bumiputera unit-holders who are able to invest heavily in shares.
In fact, an economist Dr Muhammed Abdul Khalid, pointed out that the disparity of wealth is massive, whereby the top 0.1 per cent of Bumiputera investors have an accumulated portfolio that is 1,526 times more than the bottom 80 per cent combined.
The sharp increase in housing prices over the last decade in Malaysia can only exacerbate the widening gap between the rich and the poor. The wealth disparity will increase if no appropriate steps are taken to fix it.
House ownership has become more unaffordable, especially among the B40. By race, in terms of house ownership, Bumiputeras are the most affected by housing unaffordability as they reported the lowest median household income level of RM4,846 a month, compared to RM6,582 for the Chinese and RM5,428 for Indians.
This gap, if left unchecked, could be risky and harmful to the nation. It is a powder keg once ignited can create social jealousy and political stability. The enormous gap between the have and the have-not has to be narrowed. So where do we go from here?
Pakatan Harapan believes that assistance must be given so that no one is left behind. Like it or not, we don’t have any choice but to reduce income inequality and wealth distribution amongst various ethnic groups in this country.
Yes, as rightly said by Dr Mahathir, it was no use if equal right was restricted to only voting for a government.
“If we cannot achieve equality in status, comfort, and peaceful life and prosperity for all races, then we cannot be seen as successful in building the nation,” he said as quoted by the media.
The way forward is for the government to take effective steps by introducing pragmatic strategies and approaches otherwise the gap will keep on widening.
Associate Professor Dr Jeniri Amir is a lecturer and political analyst at Universiti Malaysia Sarawak.
