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Oct 7, 2014

1/10/14 MALAYSIANS' INCOME GROWTH......theory and reality?

Lately, I spent a length of almost two weeks traveling all over the Nation. I stayed in Kuala Lumpur for two days from 25-26 Sept., 2014. Then again on the 2 Oct., 2014 I bypassed Kuala Lumpur, I drove to the North. Somewhere near Tapah, I look back, the hazy Selangor was behind me. Indeed earlier as I drove down from Kota Bharu, before leaving Pahang reaching to the Selangor boundary, the smell of smoke made me cough heavily. Accordingly as I was in Pagoh, Johore on the 1 Oct, the haze seem to disturb the lives within those enclaves. I wonder how much bio-systems are badly affected by the recurrent haze problem in this reagion.  Kuala Lumpur was the worst. Kuala Lumpur seem to turn into a lung hazard zone which impact negative health incidence among the elders and young. Definitely such will eat into the ever rising cost of living particularly in Klang Valley. Kuala Lumpur is a becoming a city of social hazard in beauty. Is there any long term solution to this? Probably the haze is the metaphoric of the Nation and regional political chaotic situation. The force to the formation of the ASEAN community must be highly geared in the National and regional agenda soonest.

(2) My idea of taking this long traveling East-South-North and later to Sabah was to get a feel of all those Macroeconomic Confidence that Mohd Najib and Zetty had been talking all this while prior to the 2015 Budget Tabling this 10 Oct., 2014 as well as looking for some windows for private investment. My concern is on how true would be the Economic Growth and most important how significant will the National Economic Growth affecting positively to the Household Income Growth of the Malaysian. In short will the Household Income Growth respond succinctly into the Economic Growth? As we all know, statistically, about 70 per cents of our population are living in the urban places. This means, out of 30.00 million of our population, 21.00 million are estimated to live in urban areas. Klang Valley whereby Kuala Lumpur, Petaling Jaya, Shah Alam and stretching to Kajang and Puchong-Putera Jaya, probably housing about 60 per cents of those urban citizens, which means about 12.60 million of our citizens are inhabiting the larger Klang Valley.  Judging from the Global Household Median Income Structure Trend, the most I would say about 50 per cents or 2.50 million of our adult (age above 24 years old) urban population are within the Middle Income Category. Thus the balance about 2.50 million of our urban adults are within the Lower Income Bracket. Nonetheless in term of total Low Income Group Category I could comfortably estimated about 7.50-8.50 million of our population in the Larger Klang Valley are within the Low Household Income Group. Nonetheless, indeed I was delighted to see all those urban phenomena sprawling all over our major cities apart from those in Klang Valley. Heavy machinery at work is the joyful economic landscape of our major cities. Definitely Klang Valley heading most of the cities in term of the construction sector activeness.

(3) Definitely Mohd Najib can bet on the emerging of the Construction sector as one of the key mover of the National's economy. Huge properties and plants development are going on a great spin in Klang Valley, Iskandar Johore, Bintulu, Sarawak and to some extend in Kulim, Kedah. Accordingly, manufacturing as sounded aloud by Mustapha Mohammed through good stream of FDI inflow is another great player. Initially FDI would spur good growth in our Construction and FIRE economic sectors. Accordingly, with the social chaotic in the Middle East, the West Anti-Islam, and the political uncertainties still hanging in Thailand and Indonesia, Malaysia could quickly tape into the regional present milky tourism sector. These I would say are the key economic sectors that we could rely as the Nation short term sources of Growth. On the other hand, the agriculture or rural sector I would say is on a very slow growth if not stagnant or going negative. Based on the present commodities prices and farmers productivity with high input cost, I have a great feeling that the rural sector is pulling the Nation to the downhill of Growth. With the downhill growth of the rural sector, definitely it would then affect negatively to the Household Income Growth of the balance 30 per cents of the population. Accordingly, the rural sector, particularly the Plantation sub-sector is dominated by the foreigners. My estimation, about 70-80 per cents of the Plantation sub-sector is dominated by the foreign labor forces. The fisheries and livestock sub-sector won't help much due to aging population and never changing industrial paradigm. FELCRA, RISDA, MARDI, FAMA, LKIM etc had not change much ever since in term of their effectiveness and business prosperity return to the people. I can't yet see the effect of ETP and GTP on all these institutions. Thus Income Increment to the sector, would give minimal impact to the local population. The foreigners are benefiting greatly with our Minimum Wage Policy.

(4) Despite the potential moderate growth in the Construction, Tourism and Manufacturing, if one really study the labor market situation of the sectors, mostly, again is out source to foreign workforce. Indeed the growth of the Construction, Manufacturing and Tourism benefit probably up to 70 per cents the non-local population. These are considered hard, low paid and poor ambient type of employment. The locals had long shied away from such jobs nature. Yet, no serious thought or studies being done to really understand such demographic shift rather many keep firing stray bullets into the darkness guesses. Thus I would say, the Growth contribution of these sectors won't help much to our urban population livelihood whom are much educated and having pretty selective career choice even among those lower income group. Observing cases in Sarawak, I had been seeing, the boom in the construction sector would always leading to urban poverty trap among the migran rural-urban population. Today indeed we keep hearing that most of our leaders seem to put heavy blame to these urban population rather scrutinizing our Economic Structure vis-a-vis our workforce market structure. Indeed our human resources development was and is too much dancing to the tune of our hungry short sighted politicians yet once the bad result-effect began to emerge, they accused the people as choosy and non-flexible. In the first place, had they not forecast all the possible pathways of our labor market prior to embarking into our Human Resource Development agenda? Did an Arab saying: The future 100 years generations is determine by the hands of the present made them realized the effect of their political greed? We are now indeed producing much more graduates within the soft-skill discipline rather the much techno-innovative manpower demand. We are too greedy to achieve the 99.90 per cents literacy rate and probably 70 per cents at least at diploma level of education attainment, yet we are producing wasteful workforce. Again I would say Mohd Najib's ETP and GTP had not able to integrate between our HR and socio-economic development.

(5) Lately I did also visited a number of Hospitals and High Learning Institutions in the Country. These includes both the public and private institutions. Stream of sick Malaysian at non-stop rushing to tired looking doctors and nurses for care. Definitely from the political stand point, there are numerous good great things about the growth of our Education and Health sectors. In my young days, I did postulated that the growth of these sectors impact positively to our Economic Growth. Indeed it was true in those day since Health and Educational services are in scarcity and high on the basic need demand. Good health and education among the people are paramount to their productive economic contribution. Nonetheless as I see them now, both our Education and Health Sectors would drag the Nation into the long run economic burden. With the rising cost of living and political instability, the amount of subsidies for these two sectors would be on the up rising. Politicians, especially among the ruling parties would behave as Santa Claus in selective areas and timing dishing out token gifts to the needy as a meant to win the people vote. Such pork barrel political approach would take the Nation to nowhere except to a greater social instability and structural economic problem.

(5) From the public health point of view, the Country indeed is running into a very bad eating habit and lifestyle which in the long run is turning the Nation into a large unproductive or less productive population. Our mass media indeed had been sending lots of false signal and even emulating a bad lifestyle culture among our young. Huge public expenditures are wasted to care for these bad habits and unproductive citizens. Accordingly, the Country is facing serious shortage of health facilities to curb with the results of bad health habit of her people. More and more health facilities are to be built with lots of foreign-based medicines to be imported. In respond to such, lots of private health related skill development centers were built by the public and private sector to the extend of no clear coordination and direction, where at last graduates were produced with poor qualification and thus unmarketable. Unfortunately these were among the poor group strata. Along side with our people friendly political slogan of the ruling parties, we are indeed moving into a high gear of a Welfare State. Nothing wrong about it, as long as the element of true professionalism are adhered in the distribution of the welfare schemes. But, unfortunately the matter had becoming a political mileage rather a solution to our increasing neglected old folks and needy. All these are indeed impacting negatively to our Economic and Households prosperity.

(6) In the Educational system, in view of high level of Low Income Earners among our population, the Nation need to provide lots of Educational subsidies to support not only the elementary and secondary education, but to the tertiary level as well. While this was reasonable then, yet it seem to no end as we go along in achieving a Developed Nation status within the next six years. Much more educational and skill development facilities are to be built, yet the type of graduates that we are producing are more toward meeting our political mileage rather career market demand. Indeed among the Malays, I dare to say, we are channeling our people to the wrong jobs signal. Our kids normally landed to the wrong job placement that require the Nation to retrain them. Their Income Structure does not reflect their educational attainment. Worst, our Educational System is unable to  surface talents and great qualities among our young, yet we had and continue to spend much more on them. What a waste of fund, time and talents?

(7) The other critical element that may cause a drawback to our Net Economic Growth is in the area of security. It seem security issue is on the uprising which may signify the bad side of modernity. The Nation is paying high bill to care for our security measures. Unfortunately we are dancing to the tune of such treat, that seem to draw us into a deep ravine of High Security Cost of Maintenance. Much more security personnel are being recruited both on the public and private bill, yet the issues keep mounting to much more complexity. Accordingly more security facilities are to be built and upgraded. Indeed all these are Unproductive Expenditure. Can't we not think and work hard to eliminate numerous social issues that are leading to these security matters, while we are pursuing hard to be a Developed Nation? How? Allah indeed had shown how the Japanese, German and even New Zealand did it, yet we are too busy politicking rather observing, thinking and taking action. We are rushing for Growth, we began to neglect heavily the demand for distribution of wealth and morality nurturing.

(8) Definitely the highest contributor to our economic draw back are abuse and hijacking of funds, power abuse and corruption. What would Mohd Najib target in term of curbing these chronic heart disease. These are element of greed which only could be tackle with the proper Life Long Integrity Implant and Enforcement. Our leaders must set the record straight to be clean, trustworthy and cost-effective. I have no issue if the salary of our Prime Minister to be raised to RM750,000.00-1,000,000.00/month with the honorable politicians at RM75,000.00-150,000.00/month rather for them to work extra hard from dust to dawn to care for their political and future personal needs to be involved in all sort of immoral business and undertaking. Our Civil Service System should also be streamline to bring much more efficiency and cost-effective delivery and business facilitating ambient to our people. Indeed, I believe the Malaysians should stand firm to make this Nation a Nation of Great Integrity. We can't be just being ignorant about our present state of inefficiency and non-cost-effective. By saying so, definitely there are people whom want to challenge me over the fact that there are recognition on some of our public institutions which seem to be of World Standard. Well if there are such recognition on some, what about the rest? Even so, to me, such recognition would be very much depending on the method and scope of benchmarking. We can't be too happy to accept especially the Western Standard of recognition when we know they are always on the double blade sword.

(9) While Najib and Zetty can be very boosting about our Macroeconomic Indices, I dare to say, from the household perspectives, we are going to no where. Apart from taking care of the high cost of the basic needs, we are going to land into a higher financing of modern basic needs. Lots of our development policies and agenda are benefiting foreign labor and enterprises. While one can argue that such is the price of modernity, then if all those really not giving our people their peace of mind, then what is that so great about modernity. To me, I can see that our economic system is trailing closely to that of the American but unfortunately we had forgotten the American had all their Check Gates to ensure certain National and Anglo-Jew agenda are well protected. Mohd Najib indeed is being trapped to comply to the American agenda of Gunting Dalam Lipatan and or Musang Berbulu Ayam.

(10) Is there a solution to the issues that I had raised? Indeed there is. Umar Abdul Aziz, the caliph of the Ummayyah Dynasty did managed to spur growth with the people fully benefiting to the system. The Muslims, especially we the Malays must study both Umars' Economic doctrines for our guidance in managing the growth of the State and the prosperity of our people. Mohd Najib and Muhyiddin should get our local Universities to really having a deep look into those doctrines and accordingly entrusting them to advice the Government professionally. Would they dare?

Note:
All Charts attached are sourced from the internet and merely illustrating of the subjects being discussed. Most of the Charts are about the American's economy. Those Charts are not representing any of the subject related to the Malaysian's issues in question but I believe trend representation is well denoted. Thank to all those that had posted all those Charts on the web.

KLIA2, Kuala Lumpur
7 Oct., 2014

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