Are Malaysians six times better off than they were in 1970?

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GDP per capita (in real terms, after adjustment for inflation) now is apparently six to seven times more than it was in 1970, but do you feel much better off?

Malaysia GDP per capita

Here are some other figures:

1970 (Source: Statistics Department)
Gross National Income: RM11.6bn
Population: 10.9m
GNI per capita: RM1070

2013 (Source: EPU figures, Sept 2013, estimated figures)
GNI: RM981.0bn
Population: 29.7m
GNI per capita: RM33010

But this has to be adjusted for inflation i.e. prices have risen by more than 4.5 times since 1970.

The problem is only about a third of national income goes to workers’ wages (while the remainder goes to corporate profits and the super wealthy) and neoliberal policies (privatisation, increasingly regressive taxation, financialisation, speculation in commodities and properties) have further burdened the people.

This is why GDP growth rate figures are virtually meaningless to the ordinary person on the street. They do not show how the increase in goods and services/wealth is distributed.

Anyway, MP Dr Jeyakumar Devaraj shares his experience in Sungai Siput in this piece published in Aliran:

Beratus-ratus pekebun kecil getah merana kerana harga getah beku telah jatuh ke bawah RM1.80 sekilo. Mereka yang menoreh kebun milikan orang lain dengan kaedah “bagi dua” lebih susah lagi.

Ada beratus-ratus keluarga di Bandar Sungai Siput yang tidak mempunyai rumah dan menduduki rumah papan atas tanah orang lain – dengan izin “ground tenants”. Mereka hadapi risiko diusir keluar apabila pembangunan sampai ke kawasan mereka.

Ada berpuluh-puluh ibu tunggal yang tidak dapat membiayai keperlulan asas anak-anak mereka kerana gaji mereka rendah – hanya RM400-500 sebulan, dan bantuan kebajikan yang maxima hanya RM450. Pendapatan mereka tidak mencukupi untuk bayar sewa rumah, bil air dan lektrik, membeli makanan dan hantar anak-anak mereka ke sekolah.

Saya percaya ini tidak berlaku hanya di Sungai Siput. Kita ada lebih kurang 400,000 pekebun getah kecil di Malaysia. Mereka ditekan dengan harga getah rendah yang berlarutan.

Kita juga ada 850,000 keluarga yang diketuai oleh ibu tunggal. Mereka ini tidak dapat membesarkan anak mereka dengan sempurna. Pemakanan dan pelajaran anak-anak mereka terjejas, dan kitaran kemiskinan disambung dari satu generasi ke generasi baru.

29 peratus daripada keluarga-keluarga di Malaysia memperolehi pendapatan bulanan sekeluarga di bawah RM3000. Mereka hidup dalam keadaan susah. Mereka tidak dapat memenuhi keperluan asas kanak-kanak mereka.

Di kawasan bandar, mereka terpaksa menginap di rumah pangsa sempit dan kotor. Urban high rise slums, Dato Speaker. Mereka terpaksa kerja lebih masa. Ibu pun kerja. Mana ada masa untuk bersama dan interaksi dengan anak-anak mereka. Inilah sebab utama masalah sosial di bandar-bandar kita.

Graduan university pun mengalami tekanan kewangan. Mereka dibebani oleh pinjaman PTPTN antara RM25,000 hingga RM100,000. Harga rumah telah melambung tinggi. Graduan pun tidak dapat membeli rumah mereka sendiri.

Inilah situasi kita di Malaysia. Negara kaya, GDP telah berlipat ganda dalam 44 tahun yang lalu. 20 kali lebih besar dalam nilai ringgit sebenar.

Pendapatan per kapita juga naik 6 kali dalam nilai sebenar. Walaupun negara kaya, kebanyakan rakyat tidak dapat hidup selesa.

Gaji hanya merupakan 33 peratus daripada pendapatan Negara. Hutang isi rumah (household debt) adalah 85 peratus GDP. Jika dibanding dengan pendapatan isi rumah dalam satu tahun, hutang isi rumah telah mencecah 215 peratus.

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25 COMMENTS

  1. Some nut says we are better off after 53 years under BN’s rule. …

    My conclusion – i think animals can reason better than some humans do, sometimes.

    • Only fools will say they are not better off. Its either they are too lazy, stupid or cannot move with the times but have to whine whine whine just because of some inequality. Go to some angmo country and see how you fit especially in the US. Even my English brother in law rather buy a house and stay here. Anyway with an accord, a double storey house and 3 apartments, how can I say I am not better of than before but then its not rosy work. Like you said animal can think better than some human. Now we see what you are made off. The animal is better than you and I am the animal no problem.

  2. Bananas n superficially or yang can still access to WiFi now at Putra World Trade Centre to write frivolous comments in defence of last 2 decades of mismanagement and denial to find scapegoats among the others???

  3. In a town or village in 1970, a family would have been comfortable with RM 500 p.m. The key is not the proportion of GDP/GNI for salaries mentioned in the article but inflation, inequality (Gini coefficient) and median income. This is a global problem, though ordinary people in the West have only just woken up to the danger. TPP and TAP wil finish us off.

    “Since the 1930s, the call… of the druids of economics has been the incantation of GDP figures – the monetary value of all economic exchanges. GDP growth benefits from all kinds of social breakdown including war and pollution. As its originators cautioned, it does not measure vast vital areas including family care and community work. The alternative measures threaten the promotion of growth at any cost. They include Measure of Domestic Progress, Index of Sustainable Economic Welfare, Genuine Progress Indicator, Ecological Footprint and Happy Planet Index.” – Andrew Simms, 2009

    “One might feel better about income inequality if there were a grain of truth in trickle-down economics. Markets are shaped by the rules our political system has written. These rules allow abusive lending that transfers money from the bottom to the top, and bankruptcy laws that provide priority for derivatives. The mobility of capital puts workers at a great disadvantage. Textbooks claim that a more egalitarian society comes at the expense of growth or efficiency. However, closer analysis shows that inequality itself contributes to social, economic and political instability and lower growth… It is mere propaganda that (a) reducing inequality reduces the incentive to work (b) those promoting equality want total equality (c) government is just a source of wastage. It is the current, unfair system that reduces the incentive to work hard. It is rent-seeking – monopolies, predatory lending, excessive pay for executives, speculation, etc. – that distorts and destroys the economy. It is the low taxes and lenient bankruptcy laws on these activities that promote them. Many of the matters ordinary people depend on – including adequate schools, health care, police, roads and the Internet – depend on government spending. It is deregulation – implemented partly due to ideology and money politics – that produced this bloated financial sector, more wealth at the top, less wealth at the bottom and the government paying prices as quoted without bargaining.” – Prof. Joseph Stiglitz, 2012

  4. DPM at Umno General Assembly noted that Bumiputra wealth, salaries are still lagging after all this time although the party has run the government since Merdeka. he used this argument to justify for a new NEP. In the words, that is akin to the management of a listed company producing losses every year and yet have the audacity to ask that shareholders keep their positions while rehashing the same ideas over and over again (NEP), which is completely absurd!

    • In every year Umno General Assembly, looks like they have NOTHING to talk besides Accusing/Warning others from Insulting Malays and the Islam.

      Umno has NOT tackled any of the Malay Community/Social Problems which they are supposed to address, but every year is the same old TUNE to Warn the NON-Bumis for Insulting the Malays and Islam.

      Is that what UMNO is all about? What about the Welfare of the Malay Community, Community Progress, Community Present and future Problems? Umno has NEVER touched on all these Problems instead Blame others for their shortcomings and failure.

  5. In 1970, Malaysians are happy watching free-to-air RTM’s P Ramlee movies and Empat Sekawan on their 20″ Black and white CRT televisions.

    Today Malaysians are paying Astro RM25 on top of the hefty subscription fees to watch HD programs (assuming it is not raining to get the reception) on their 40-60″ LED/4K flat screen TVs.

  6. After a bit of research, I’ve come up with this:

    Starting pay for fresh university graduate in 1970 — about RM 1,000

    So, this is my conclusion:

    Pay of fresh university graduate has increased only 3X (2014 compared to 1970)
    but the prices of other things have all increased more than this.
    Increase in house prices have been the steepest, thus making life for fresh
    university grads difficult.

    My guess would be that those fresh univ grads who are lucky enough to be able to live
    at home in PJ or KL, obtained financial assistance from their parents in buying their
    car, eat at home for most meals, do not have to support younger siblings, would be the most “well off”.

    As for the other fresh univ grads, they would have to pay for renting a room in someone else’s
    house, make monthly car loan payments, pay for meals eaten outside etc. They would have little
    savings left over at the end of the month.

    Is it any wonder why so many young Malaysians go overseas (including to Singapore) to
    work ?

    • You are right, Phua Kai Lit on all accounts. We would be better off with efficient public transport. Yes, stall food is more expensive even though the foreign food assistants are paid less, to say the least……

      • Singapore has a good efficient transport but many could not afford private car ownership.

    • Your last paragraph needs correction. Mostly non-Malays go overseas to work hard for more income. Most Malays stay put as civil servants (senang diri) and continue to complain they are marginalised with low income at every Umno General Assembly.

    • The rich of all races have been investing or hiding their wealth overseas as they have no confidence in putrajaya and this has been going on since NEP. This may be the reason why our ringgit is so weak resulting in imported inflation over a wide range of products thereby making us all poorer.

  7. Let’s see (if I remember correctly):

    New single storey terrace house in Petaling Jaya in 1970 —– RM10,000
    Same single storey terrace house in PJ in 2014 —- selling for at least RM 300,000 !

    Visit to the GP in 1970 —- RM5
    Visit to the GP in 2014 —- between RM20 to RM50

    Haircut at Indian barber shop in 1970 —– 50 sen
    Haircut at Indian barber shop in 2014 —– RM12

    Bowl of hawker stall noodles in PJ in 1970 —– RM1 to RM1.50
    Bowl of hawker stall noodles in PJ in 2014 —– RM5 to RM6

    Lower end car in 1970 — RM10,000
    Lower end car in 2014 —- RM50,000 to RM60,000

    Starting pay for fresh university graduate in 1970 — RM ??
    Starting pay for fresh university graduate in 2014 — RM2500 to RM3000

    Rise in house prices are the most alarming (& low starting pay for fresh university graduates too).

    P.S. Blog readers, please correct any of my figures listed above that are wrong or wrongly remembered. Thank you.

      • 1974? That is after the oil price crisis of 1973 (Arab-Israeli War),
        so the prices would be higher because of the resulting inflation.

      • 2013 is where prices especially houses move the highest. This is what Jeyakumar is trying to do by using the lowest in 1970 and the highest in 1973 to paint a bad impression of the govt.

    • Lower end car 1970 RM10,000
      Lower end car in 2014 RM50,000 – RM60,000

      Why don`t you try these few instead. Proton at 35k – 42k, new Perodua Axia 25k – 35k, Myvi – 40+k. Have you gone overboard ??

  8. Yes, they are now better off than before and its because we have a good govt for 53 years. Many opposition critics would definitely jump in and say the rakyat life is very hard and blame it on the BN govt Like Tunglang said, its the bing chui factors that is driving them this way. In the 70s and 80s, you are happy with a mini, 120y or Proton. Now they go for Vios, Sylphy, Camry, Accord and higher prestige car. Previously many of them are happy renting a room or a small flat. Now they want condo and apartment with facilities. Previously you would be happy sipping coffee in the coffee shop. Now they do it in Starbuck, Oldtown, McDonald. Previously they are not able to own a handphone, now they are changing h/p like changing trouser. Its the lifestyle that`s that they are not able to cope up with the standard of living and not due to the govt but the opposition will be quick to capitalize on it. We should be happy with the BN govt that have given such prosperity and a good life the past 53 years.

    • Have you been overseas, or even S’pore recently? Can you justify anything by quoting from any scholars’ books? One has to travel overseas to broaden your outlook…..

      • Talking of Singapore, I think its not as rosy as you think. Normal average starting pay is about S1200 – 1500 for unskilled workers. Its just that those who can save can benefits from the exchange rate when they come back especially their CPF. I am a millionaire because of that. On the surface Singaporean are also like Malaysian having to scrap through their daily life just like us. Maybe you think the UK is rosy. Try going there or ask any British. My sister has a British husband with 2 kids in UK. And they like it here so much because of the lower standard of living. Why. ??? The exchange rate make them happy here just like many who work in Singapore. For the Singaporean or British or for any Indonesian, Filipino, Myanmar, Vietnamese, Hong Kongite, Ameriacan, Latin American, East bloc countries. The whole world is struggling with the exception of some oil producing countries. I am asking you now, have you been overseas or how many country you have been ?????. If Malaysia is not good, its not that bad either.

    • The majority of Malaysians will likely struggle in the event of income emergencies as they have no financial assets and no banking or financial account of any kind, the Malaysia Human Development Report 2013 revealed.

      More than half or 53% of Malaysian households have no financial assets, while one in three Malaysians do not have an account. Rural households have the highest number of those without any financial assets (63%), compared to 45% of urban households, and by ethnic group, Bumiputera and Malays chalked up the highest figures as those without such assets.

      About 57% of non-Malay Bumiputera and 55% of Malays have no financial assets, with the figure for the Chinese and Indians at 45% and 44% respectively, In other words, roughly one out of two Malays, non-Malay Bumiputera, Chinese and Indians have no immediate liquid financial assets, making them vulnerable in the event of an income or employment shock.

      http://www.themalaysianinsider.com/malaysia/article/with-zero-savings-majority-of-malaysians-face-dire-straits-in-emergencies

      ps: This is what we get after 57 years under BN?

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