COMMENT Malaysia’s social development policies are governed by its focus on economic growth.

The country’s interventionist policies are aimed at strengthening the economy through incentives such as the tax system, pricing, regulatory frameworks and prioritising certain investments, all of which favour industries in urban centres, not the rural poor.  

The resource rich states of Sabah and Sarawak remain the poorest states, despite their significant contributions to the federal coffers.

Rural and Regional Development Minister Shafie Apdal claimed a few days ago that Malaysia has learnt from the 1997 Asian Financial Crisis.

However, current price hikes and their impact on the poor reveal that lessons learnt from the Asian Financial Crisis have not been translated into pro people policies .

One of the key lessons from the 1997 crisis was Malaysia lacked  a social safety net system  and   its unpreparedness to manage the serious economic and social consequences of the crisis on workers.

The crisis revealed that workers were largely left to deal with unemployment problems when jobs were lost due to factors that workers had nothing to do with.

With modernisation, depending on family support during times of unemployment is not a solution. The need for a more formal system of social protection is vital .

That social safety nets should be an important part of a country’s social development strategy was proposed to the government by trade unions and economists during the 1997 financial crisis.

However, the BN-led federal government opted for policies that favoured privatisation and monopolies benefiting the politically connected.

Government-linked companies have the monopolies over water, electricity, transport, telecommunications and waste disposal.

Malaysia’s privatisation of  healthcare has put the people into a high-risk social environment that gives little protection for the poor. The increasing number of appeals we see in the media for donations to pay for surgeries for children is an indication the country’s privatisation policies are not just.

Protection, happiness and corruption indexes

About  34 percent of the 13 million-strong workforce earns less than RM700 ringgit  a month. The poverty line for household income for Peninsular Malaysia is currently set at RM720 and for Sabah and Sarawak, it is RM800 a month.

The brains that Shafie Apdal refers to seem to put on their creative thinking caps just before general elections.

Providing Bantuan Rakyat Malaysia 1 during elections is not a policy intervention based on meeting the needs of the poor. BRIM1 was a vote-buying tool , not a social policy intervention.

Despite the country’s oil wealth, Malaysia’s social policy development is in no way close to the social safety nets provided in Scandinavian countries such as Denmark and Norway.

In the 2013 World Happiness Report, these countries were ranked as the happiest countries out of 156 countries. Malaysia was ranked 51st.

Among the indicators used were social support, life expectancy and freedom to make life choices. These  countries performed very well in Transparency International’s Corruption Perception Index released in December 2013.

With the burden of price hikes, bearing the costs of corruption as well as various curbs on our freedoms, such as controls on names of the one we worship, Malaysians are very unhappy.

Malaysians work longer for a loaf of bread

An interesting examination of the purchasing power study of working time  would give politicians and bureaucrats insights on putting their brains together for understanding the difficulties faced by Malaysia’s working class in times of price hikes for most essential goods and services.

For example, a 1999 study by the International Metalworkers Federation showed the amount of working time needed by workers in the radio, TV and communications equipment industry  to purchase a loaf of bread in the a number of countries:

It took just four-and-a-half minutes to do so in Canada, and as long as 38.5 minutes in Malaysia! The other countries studied in the length of time needed to buy a load of bread were Australia (7.5 minutes); Chile (34.5 minutes); Denmark (3 minutes); India (17 minutes); Japan (14.5 minutes); the Philippines (33.5 minutes); and the United States (9 minutes).

Although this was in 1999, the salaries of Malaysian workers have remained largely low and they are likely to work longer than workers in other high middle-income countries to purchase a loaf of bread.

Malaysia belongs to the club of high middle-income countries. Malaysia has achieved most of its Millennium Development goals. However, income inequality remains a serious policy challenge for  this country.

Tomorrow: Our economic policies do not ensure a just society


JOSIE FERNANDEZ is a researcher, social activisit and Asian Public Intellectual Fellow.