ACCORDING to the Forbes Malaysia Rich List 2015, the 50 richest Malaysians collectively own more than RM265bil. That is 40% of the assets of the Employees Provident Fund, the retirement savings of 14.4 million Malaysian workers.
Yes, we should admire the hard work and business skills of Malaysian billionaires.
They do deserve all their success. At the same time, we must put things in perspective, especially as income disparity is getting out of hand.
In 2012, Peking University reported that in China the top 1% of households own more than 30% of the total wealth, with the bottom 25% owning a miserable 1%.
The report includes an alarmingly high Gini coefficient, a measure of inequality with 0 representing total equality and 1 representing total inequality. China’s Gini index in 2012 was 0.73. In the United States, the index is 0.56.
Income disparity is widening in the US and almost every free market economy.
Such income disparity is not socially, politically and economically sustainable.
Already household debt is increasing in most countries. This means that demand and consumption are financed by credit and debt, not by real income.
Another interesting fact of Malaysia’s richest list is that 15 of them are in the real estate business, indicating that the ever-increasing cost of houses and properties have made billionaires out of developers while the rest of us struggle to own a roof over our heads.
Other billionaires are in palm oil, indicating that it is a lucrative business.
And they keep saying that Malaysia cannot afford to pay the minimum wage of RM800 a month.
Despite acute labour shortage, the alarming dependency on foreign workers and the state government’s policy of no more oil palm plantations on state land, they still want to develop NCR land for oil palm. The excuse? This is the only way to lift rural folk out of poverty.
This brings me to another issue - is it wise to put all our eggs in one basket? Should we not open more land for food cultivation, especially rice, our staple?
The fundamental problem of high inequality and income disparity is that it perpetuates the problem. Why? If the rich control the wealth, you can bet they will use that control to enhance their own wealth, creating more inequality.
For example, because there is a demand for high-end homes, housing developers concentrate on building such houses. This in turn will push up prices of affordable homes until they are out of reach of wage earners and ordinary folk.