Thursday 28 Mar 2024
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KUALA LUMPUR: Malaysia may have made great strides in reducing poverty levels, but it now needs to grapple with inequality in wealth distribution and opportunities for upward mobility, said an economist and author of The Colour of Inequality.

Muhammed Abdul Khalid said the widening income gap caused by inequality in opportunity for education, income and asset-ownership, will continue to affect upward mobility among low-income households.

Failure to address this was a recipe for social and political instability, and could pose a danger to economic growth, he told The Malaysian Insider in an interview ahead of his book launch this week. Affirmative action is still needed, and meritocracy might not work for everyone, said the 39-year-old, whose own childhood experience with poverty was an impetus for his interest in studying economics and wealth distribution.

Such a statement about meritocracy may come as a shock to some in Malaysia, where preferential treatment for a segment of people has become a political hot potato and a source of resentment. But, Muhammed has a qualifier: affirmative action should continue but targeted at low-wage earners instead of corporates; at poor rural children for education, rather than across the board for a whole race.

Muhammed, who helped his mother sell kuih to make ends meet, believes that needs-based affirmative action is what is needed to address the wealth gap between Malaysians, regardless of race. He dispels the popular perception that the bumiputera are still poor despite the New Economic Policy (NEP), arguing instead that in 1970 before the NEP, 65 out of 100 bumiputeras were considered poor. But, now, it is only two in 100.

“This is an undeniable achievement. And let’s not forget, poverty rates for all groups reduced significantly, although there are still pockets of poverty in certain areas, especially in east Malaysia. However, the issues now are less about poverty, but about vulnerabilities, lack of asset ownership and upward mobility,” he said.

The Petronas scholar said inequality should not only be seen in terms of education, income and asset-ownership, but also in policy-making itself.

“Policy should not be shaped by certain interest groups, which we see happening now, where we don’t hear the voices of those in Kelantan, Sabah and Sarawak.

“Policy-making must be more inclusive,” he said in the interview at his office in Kuala Lumpur recently.

There was now less upward mobility among the bottom 40% of households in Malaysia, and the current scenario did not bode well for future generations if public policies are not put in place to address certain worrying trends.

“While I had a better chance of having a better education and better income than my parents, I doubt children from low-income families can have that same upward mobility now, and this has to do with government policy,” he said.

The current requirement for all As in order to enter public universities, and even fully- residential boarding schools, was unfair to rural students and those from low-income households, who lacked the foundation in quality education.

The Colour of Inequality will be launched by former finance minister Tun Daim Zainuddin on Nov 11. — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on November 10, 2014.

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