Half Year Economic Performance: PR Promises RM4,000 Minimum Household Income Within 5 Years of Administration

The nation’s economic figures released yesterday were as anticipated. The growth of 8.9% in the second quarter and 10.1% in the first quarter, while commendable, came on the back of a contraction of 1.7% in 2009.  Compared to Indonesia and Singapore, our half year economic growth provides a glimpse of our comparative prosperity vis-a-vis our neighbours’ in the future, if reforms are not carried out immediately.

Singapore is expected to grow at 13% to 15% for 2010, compared to Malaysia’s growth forecast of 6% to 7% by the end of the year. On the other hand, Indonesia is anticipated to register a growth of above 6% for 2010, continuing a 4.6% growth in 2009 when Malaysia was in recession.


The disconnect between an announcement of stellar economic performance and realities on the ground is symptomatic of an economic management that is unable to eradicate income inequality in society. The adage that in Malaysia the rich get richer and the poor become poorer comes to mind each time the economic disparity in our society is discussed.

There is not going to be much celebration on the streets as the economic reality for the majority of Malaysian households is different, especially when they have had to put up with a few price hikes in the last two years. This remains a key concern for Pakatan Rakyat, that while cost of living continues to rise, 2.4 million families or 40% of the households earn less than RM2,300 per month. They form the poorest section of our society and 75% of this group are Malay/bumiputra families.

Low wages continue to put pressure on Malaysians as they grapple with steadily rising cost of living. The majority of graduates entering the job market struggle to pay for the bills, let alone to save.

The Economic Transformation Programme (ETP) released by the Prime Minister’s Department on 17 August 2010 did not indicate a roadmap to close this disparity. It promises massive improvement to the economy, tripling the Gross National Income to RM1.7 trillion in 2020 from RM600 billion in 2009. It claims that this will translate to an income per capita of RM49,500 by 2020 – on the back of 3.3 million new jobs to be created.


This sounds credible as a plan, similar to other plans previously unveiled by Barisan Nasional. It has become standard modus operandi that the Federal Government throws a lot of big numbers and hides behind assumptions and premises that eventually are proven wrong.

In order to achieve these targets, Malaysia requires RM2.2 trillion new investments, 92% of which is expected to come from private sectors. 75% of this 92% is projected to come from domestic direct investments while the rest is from FDI.

This is where the projections and assumptions are not grounded on reality. Announcing a set of ambitious economic targets to be built almost entirely on private investments is irresponsible to say the least, when Malaysia has been relying on pump priming for the past 12 years and private investment growth was minimal. This is akin to planning for the impossible and ignoring past track records for the sake of an announcement.

Similarly, a promise of 3.3 million new jobs and income per capita of RM49,500 by 2020 is detached from the hardship of the people for the last 10 years. The reality is 34% of our workforce earns below the poverty line (less than RM700 per month) and the average salary increase for the last one decade is only at 2.6% (compared to 10% for Indonesia in between 2007 to 2009).

The act of perpetually throwing new numbers to distract the public’s attention from economic realities on the ground perpetuates the habitual refusal to address the root cause of the problems. I am confident that the public will quickly conclude that ETP is another instance in a long line of public relations gestures meant to delude the public when the realities on the ground hardly changes over the past two years.


That is why I have always emphasised economic programmes that can alleviate the poverty of the people such that there is no disconnect between the supposedly good performance of the economy with the realities on the ground.

A staggering two-thirds of our population survive on a household income of below RM4,000 a month. These four million families will continue to face hardship due to the rising cost of living, unless priorities are given to increase their income level drastically and quickly.

Therefore, after a series of consultations and studies, Keadilan has agreed to set a target of RM4,000 minimum household income within the first five years of Pakatan Rakyat’s federal administration as our flagship economic target . This policy proposal will be brought to Pakatan Rakyat’s leadership council for further deliberation.

Keadilan will work with its partners within the framework of Pakatan Rakyat government to implement a series of policies to step change the level of wages in the country to achieve a minimum household income of RM4,000. These policies include strong commitment to plug leakages, determination and honesty to fight corruption, reforms of the judiciary and public institutions to bring back the credibility and promoting transparency and accountability to attract new FDIs.

The country must move away from concepts and economic promises that had never been achieved or translated well to benefit the public. The 30% equity promise by Umno remains unfulfilled and hardly has any effect on Malay families grappling with low wages and high cost of living. Yet it is bandied as a cornerstone of gift from Umno to the public.

Keadilan’s gift is more straight-forward and easily translatable to dollars and sens to the public. Under a Pakatan Rakyat government, there will not be a family which earns below RM4,000 within the first five years of our administration.



19 AUGUST 2010

2 thoughts on “Half Year Economic Performance: PR Promises RM4,000 Minimum Household Income Within 5 Years of Administration”

  1. Salam, appreciate it if you can share references for the quoted numbers in this post.

    After a tough and challenging couple of years in state government, it is very commendable the amount effort put in by most state reps. The sincerity and intellectual capcity of PR reps are undeniable. The achievements so far such as direct support for the people(allowances for the elderly and for families of the deceased, water subsidies and the continued struggle for a fairer water tariff/supply and many others, I’m sure), have not gone unnoticed.

    However, while this minimum household income is a good long term strategy, more tangible short term achievements are important for the people too. What can the people of Selangor and Penang, for example, expect within the next couple of years until the next election? Or rather, what can the state government realistically achieve for the people? Something tangible, I hope.

    We don’t just need a clean government (if we were to compare with the previous administration, that would be setting the benchmark to low if you ask me), we need a high achieving and high performing one as well.

  2. Sdr Zamir,

    1) Statistics on poverty & income levels are given in RMK10 at length, this is the official figure actually

    2) Growth statistics are from BNM and similarly central banks of other countries

    3) ETP targets are from ETP released by PMO

    4) 75% of the families earning

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