Wealth Distribution

Dear my blog followers,

I believe Malaysia fares much better than most of the countries in terms of wealth distribution. To be fair to the current government, yes, our income disparity isn’t that bad at all. Having said that, the issue is still to be resolved and remain one of the big stumbling blocks to Malaysia’s dream of becoming a fully developed nation. In the States, the issue of equal distribution of wealth has become a very big issue dominating the campaign during the U.S Presidential's electoral process - in which Mr. Obama emerged as the eventual winner. And during my study years, I can still remember one of my Professor teaching startegic Human Resource Management, saying that Malaysia have a considerably high dependency rates, meaning we have a quite a number of people depending financially on one successful family member.

Dear My Friends,

Why do this income distribution is important? First and foremost, we have to understand what it means by income distribution. Income distribution means the percentage of wealth of the nation is shared among all citizens - whether it is equally shared or a big share of the wealth is monopolised by certain groups of the society.

We used to associate Income distribution with social issues, but it is actually a very big economic issue which affects the competitiveness of the nation. Inequality of income distribution brings social problems to society, creates human capital issues, and hinders innovation, creativity and will spark corruptions. Income distribution reflects prosperity of a nation. And it will eventually effects the competitiveness of the country.

Actually the issue of income distribution is far more complicated than the matter of distributing the nation’s wealth equally. When we talk about income distribution in a multi-racial country such that of ours, it is a very delicate and complicated. I have two main points under this topic: 1) Access to education 2) Polarization of ethnic group based on working sector.

We have heard since long ago that education is the key to improve one’s standard of living. Education can be a gateway for the poor to climb up the social ladder to become rich. This is true, provided, everyone is given a fair opportunity to gain knowledge through the education sector. Education is important indeed, but access to it is far more important. Urban folks and well to do families are lucky that they have access to good education. First grade schools are within their vicinity or they can hire a personal tutor to teach their child. But people in rural areas say, in Tumpat Kelantan cannot afford to go to good schools or hire a private tutor, even they are brighter than those who schools in Kuala Lumpur. With poor education infrastructure and good teachers, they will probably be farmers for the rest of their lives. They will be poor, forever. What is the most terrible thing can happen to ones? The most terrible things can happen to anyone is they are left without choice. If they are born poor, then they will be poor forever without any chance of coming out of that poverty. I can tell you, that’s hell. That is the worst thing can happen to anyone. So, access to good education is vital to gives the son of a farmer and the son of a doctor a fair chance of moving up the ladder in the social hierarchy.

The second point that I want to touch is the polarization of ethnic group based on their working sector. We have seen that the Malays dominated the public sector. Civil servants are synonymous to the malays whereas the Chinese are known as traders and businessmen. You ask every young graduated malays and their main objective is to become a PTD and you can ask any Chinese graduate and their ambition is to open up a store selling something.  This polarization scenario contributed to these two ethnic groups financial power. The Chinese is richer and the malays are poorer because of their professions. Hence, the issue of unfair distribution of wealth is further complicated with the our country’s ethnic demographic structure. I’m aware that the JPA is doing a lots to attract Chinese and Indians into the public sector. Sometimes yes, you need political will, and sometimes you need more than that – keikhlasan dan a very open mind to accept change. Reciprocally, we need more malay entrepreneurs. We have to understand  that this will need time. Business and trade is not malays’ culture. We are known as businessmen only within 2 or 3 generations whereas the Chinese are known to be traders and businessmen for all their generations. Changing the malays to be entrepreneurs will means changing their social culture and this will need time.