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Saturday, October 31st, 2020

GDP growth and competitive rank, yet to benefit the people — Joshua Woo

by September 30, 2017 General

SEPTEMBER 30 — The recent reports on the economic wellbeing of Malaysia, trumpeted by the ruling party Barisan Nasional, is nothing more than cosmetic. Substantial change is negligible.

The 5.7 per cent GDP growth in the first half of this year and the 23rd position in the World Economic Forum’s (WEF) Global Competitiveness Report 2017-2018 are quoted as evidence of the country’s progress.

These reports by themselves do not represent reality. Worse, they are being exploited to manipulate our actual experience, to convince us that all is well while persistent problems swell.

To get a better grasp of reality, these reports must be read alongside others. One may begin with the rising cost of living.

The average inflation rate for the first six months is 4.1 per cent. Compared to the same period last year (2.6 per cent), this is an increase of 58 per cent. The estimated rate will be between 3-4 per cent for this year, which is high among our neighbours: Singapore (1.1 per cent), Brunei (-0.1 per cent), and Thailand (1.4 per cent).

Hence, inflation is referred to as the fourth most problematic factor for doing business in Malaysia, by the World Economic Forum’s Global Competitiveness Report.

The devaluation of Ringgit Malaysia is worrying. In 13 January 2014, the exchange rate of 1USD was RM3.26. The same day this year, it was RM4.46. Within a year, the value of our currency, in relation to USD, was reduced by 37 per cent.

Following that, the trajectory of our Gross National Income per capita, that reflects the average income per Malaysian, is badly affected.

The Economic Planning Unit’s “The Malaysian Economy in Figures 2017” report states that the Malaysian average income of 10,644 USD in 2014 was reduced to 9,242 (2015), then to 9,102 (2016), and at 8,906 USD this year.

That means, if without salary increment, we are on average paid 16 per cent less now for the same amount of work we did three years ago!

Salary increment must be no lesser than 16% over four years to at least be stagnant. If inflation is accounted for, we need more than that.

GDP growth and competitive rank, by themselves, cannot be measures of economic and social wellbeing. Things are not cheaper. Rather, it has become more expensive to live in Malaysia.

Recent poll corresponds to these data. More than half of those surveyed, 56 per cent remarked that their financial situation had worsened, and 86% deemed that the average wage was low.

GDP growth and competitive rank have not been shown to benefit the average Malaysian. There is clearly a huge gap in the system. The present government has failed to translate productivity growth and competitive edge to the people’s advantage.

Increased production and reduced red tape for foreign investors are not indication of the public’s increased disposable income and consumption. GDP growth and competitiveness, by themselves, are irrelevant to the local’s standard of living.

Sadly, the ruling government seems contented in mere cosmetic, exhibiting neither innovation nor serious effort to fix the systemic gap.

* Joshua Woo Sze Zeng is a councillor at the Majlis Perbandaran Seberang Perai (MPSP) and Democratic Action Party Socialist Youth chief for Bukit Mertajam branch.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.