Transformation is not all about income only


  • Business
  • Monday, 18 Mar 2013

TRANSFORMATION is not all about income. Yes, income is the key part and we put a lot of emphasis on and look at ways and means to increase that, but we are equally aware that income must reach everyone.

There must be inclusiveness in development that is, the drive towards achieving developed status by getting a per capita income of US$15,000 (RM46,795) a year by 2020 must include as many people as possible in that process.

Importantly, we must develop at a pace which we can sustain over time without putting too much strain on our available resources, not rush at breakneck speed with no thought of the morrow.

We must also give thought to the preservation of the environment and conservation in our development plans. These highlight the need to keep our development sustainable in addition to being inclusive.

This balanced approach to development, which combines high income with sustainability and inclusiveness, is what provides us with a sense of perspective about development, the ultimate purpose of which is improve the quality of life for everyone.

Many countries in their development programmes did not focus on the other aspects of development such as inclusiveness and sustainability. They paid the price for it with lop-sided development and an increasing gap between the rich and poor.

We have much to do in this respect as our Gini Coefficient (a measure of the gap between rich and poor where low means greater income equality) is very high and we are taking measures to deal with this.

In my last column, I wrote about why there was a pressing need for minimum wages. Some 3.2 million workers earn less than RM700 a month. When we set the minimum wage at RM900 per month for the peninsula and RM800 for Sabah and Sarawak it will have real impact on these workers because their wages will increase.

Minimum wages directly help to reduce the income between the haves and have not's by ensuring that those who can afford to have labour pay a much fairer wage for that. That will directly help to close the income gap.

The Government's payment through BR1M (Bantuan Rakyat 1 Malaysia) is a direct payment of RM500 to households with a monthly income of less than RM3,500. This year, the payment would involve an allocation of RM3bil while last year 4.1 million recipients received a total of RM2.1bil.

That's just one of the many programmes that the Government has embarked on to help the poor and the needy. It has introduced the Klinik Rakyat to make health care more easily accessible and cheaper to the poor in cities and villages.

It has introduced Kedai Rakyat 1 Malaysia to alleviate shopping expenses of the lower income group by encouraging these shops and supermarkets to stock food and other essential items at much lower prices then in the usual outlets.

For workers whose lunch expenses are rising, we have had Menu Rakyat 1Malaysia to lower their daily meal costs. These do mean a lot to those whose income is constricted and who have trouble paying more as prices of things rise.

Sometimes, the best way to help the poor, especially the very poor, is to simply give them the money to alleviate their suffering. That's far better than subsidies which help everyone, rich or poor.

In addition to that, there are ongoing programmes for rural infrastructure to ensure that facilities in the more distant areas are up to mark and modern. We will continue to spend on the rural community.

For the bumiputra community, we remain committed to increasing their participation in business through training, financial help and giving them priority for government jobs.

The Government is able to do all these things because it has money. Money comes from better tax revenues and other income and depends on an overall healthy rate of wealth generation.

Despite trying external circumstances, we are focused and have concentrated on certain areas of high economic growth to deliver continuing impetus towards wealth creation. This is already showing results with the economy continuing to grow around 5% a year.

Last year, government revenue hit a record of RM207bil, a 12% increase or RM22bil more than in 2011. This extra income helps to give that leg up to the poor so that they can continue to move upwards and better their lot.

We are of course still focused on reducing the budget deficit as a percentage of total GNP (gross national product goods and services produced in Malaysia at current prices plus net income from overseas).

But because of our good financial position, we don't need to be austere, and while we remain prudent we will still do the needful to help the more unfortunate members of society in our midst.

The economic transformation that we are going through will only be truly successful when we not only hit our income target of US$15,000 per person in 2020 but also when the increase in incomes lift most of our poor out of their predicament.

In addition, we have to be inclusive of other segments of the population.

Some examples of our affirmative actions include efforts to make sure that we help the rural population by building a record 3,349km of rural roads in the last three years.

We are also working towards getting women to participate in the workforce, particularly holding managerial and leadership positions. To this end, our Prime Minister has set a target of ensuring that women hold at least 30% board membership in large publicly listed companies by 2015.

The Government is also doing its best to get more economic participation of the minority groups such as small tribal groups in Sabah and Sarawak and the Orang Asli.

Rest assured, we have not forgotten them in our pursuit of income and wealth.

Indeed, our Prime Minister has been leading the country on a transformation path to become a high income economy by 2020, which is inclusive of all segments of the rakyat in a manner that is sustainable, not just for the present but future generation as well as in terms of the environment. I believe that this new economic model which Malaysia is pursuing is the way to go.

● Datuk Seri Idris Jala is CEO of the Performance Management and Delivery Unit and Minister in the Prime Minister's Department. All fair and reasonable comment are welcome at idrisjala@pemandu.gov.my

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