Middle classes need to ‘feel’ success are trapped, disillusioned


TRAPPED AND DISILLUSIONED: Populist moves will not deliver in the long term

Rita SimTHIS is a story about M. She is 38 years old and lives in Cheras. Working as an accounts executive in a small company, she earns less than RM3,000 a month, which barely covers her rental, car loan, as well as expenses for herself and her elderly parents.

Her parents' medical expenses have already landed her in debt. While their treatment would be cheaper in Hospital Universiti Kebangsaan Malaysia, the waiting times are too long and she cannot spare the time off work.

Every month, she has to stretch her salary to the last ringgit before the next cheque comes in.

There are many other stories like M's, from a special category of the urban poor who are educated, earn above the poverty line and live in a middle-class area, but have difficulty making ends meet.

These middle-classes are increasingly frustrated that the economy has done little to boost their income, while the prices of things -- food, petrol, property -- keep going up.

M recalls that when she first entered the workforce 18 years ago after earning her diploma, she could live comfortably on her starting income of RM1,000, but since then, her salary has not increased proportionately with the times.

Many others bear the additional burden of raising children and saving for their education.

The stagnant income of many middle-class earners has been described as a "trap". It is an apt description, because a large proportion of the population are struggling to claw their way upwards to wealth, but the gap between them and the high-earners keep widening.

According to the National Economic Advisory Council, income growth has been strong only for the top 20 per cent of Malaysian earners, while the bottom 40 per cent of households have experienced the slowest growth of average income, bringing home less than RM1,500 per month in 2008.

People like M are becoming increasingly unhappy with the government for what they perceive as its failure to address their desperate situation.

Although there have been radical moves under Prime Minister Datuk Seri Najib Razak's administration to overhaul the economy and governance of the country, these efforts have had to battle a great deal of cynicism and pessimism from the people.

The New Economic Model (NEM), the Economic Transformation Programme (ETP) and the Government Transformation Programme (GTP) seek to create a high-income economy, which will eventually lift middle-income earners like M out of their rut.

In principle, the ETP and GTP should ultimately increase investments, create high-wage jobs, develop talent and reduce disparities between the rich and the poor.

If last year's achievements are anything to go by (gross domestic product growth of 5.1 per cent, GNI per capita of US$9,500), Malaysia is on track to achieve high-income status by 2020.

Unfortunately, it is not the value of the ETP and GTP, per se, that is being called into question.

It is the fact that the ETP and GTP are being carried out against a backdrop of distrust.

Some groups in the country are not even impressed by the fact that nothing about these transformation programmes is business as usual for the government.

Instead, these middle-classes are so disillusioned that they are attracted by populist moves, such as abolishing tolls, making cars cheaper or promising RM4,000 monthly income to all households.

But there is no such thing as a free lunch, as taxpayers will eventually come to realise.

The government has to inspire confidence in people, and prove it is the right government to take the country through a transformation process that, however painful, is the right move for Malaysians.

Citizens like M need to "feel" the success in their lives, not read about it.

The middle-classes are frustrated that the economy has done little to boost their income, while prices keep going up. Pic by Syamim Tg Ismail

Writer is a co-founder of the Centre for Strategic Engagement (CENSE)

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