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the common good is to be understood as "the sum total of social conditions which allow people, either as groups or as individuals, to reach their fulfillment more fully and more easily" (CCC, 1906). The common good consists of three essential elements: it presupposes the respect for the person (CCC, 1907); requires the social well-being and development of the group itself by “…make[ing] accessible to each what is needed to lead a truly human life: food, clothing, health, work, education and culture, suitable information, the right to establish a family, and so on (CCC, 1908); and requires peace, that is, the stability and security of a just order (CCC, 1909). In the context of Malaysia, the Federal Constitution of Malaysia captures the common good for all Malaysians and those who reside here as it provides "the sum total of social conditions which allow people, either as groups or as individuals, to reach their fulfillment more fully and more easily". However, there appears to be a stark difference in the understanding of the common good between the Government of Malaysia (GOM) and large segments of society. The GOM appears to be violating all or some of the essential elements of the common good at regular intervals. The Bersih 3.0 rally on 28 April, 2012 which saw the largest ever public protest in Malaysian history, follows a long list of public protests where participants have demanded that Constitutional rights are protected. Since 1998, the demands have ranged from good governance of the Reformasi movement, HINDRAF’s demands for the rights of minority Malaysian Indians, the Orang Asal’s demands for their traditional rights and ownership to lands to be recognised, to specific causes such as the anti-Lynas, anti-ISA, anti1
Greg Lopez is the editor of the New Mandala’s Malaysia section, an academic blog based at the College of Asia Pacific, Australian National University where he is completing a PhD on institutions and economic growth in Malaysia at the Crawford School of Public Policy.
Catholic Church (2000) Catechism of the Catholic Church. 2nd Edition Vatican.
privatisation of healthcare and public utilities, anti-fuel price hike, anti-GST, minimum wage, and many others. The GOM typical response is harsh and excessive. Is there a stark difference in the understanding of what is the common good between the GOM and large segments of society? If there is, why is it so? This article approaches these two questions through Malaysia’s track record on economic growth and the distribution of wealth and income. Malaysia’s economic performance since independence in 1957 has been remarkable. In 1993, Malaysia was one of the eight “East Asian Miracle” economies recognised by the World Bank for recording “miraculous” economic growth rates.3 Malaysia was also one of the thirteen countries to have recorded average growth rates of more than 7 percent annually for twenty five years or more. Malaysia achieved this from 1976 to 1997.4 During this period, Malaysia reduced absolute poverty from 52 percent in 1970 to 4 percent in 2009, a truly remarkable feat. However this remarkable achievement is diminished by the fact that absolute poverty still exists. In the states of Kedah, Kelantan, Perlis, Sabah, Sarawak and Terengganu, the absolute poverty levels are above the national average. More shockingly, almost 20 percent of Sabahans live below Malaysia’s poverty line. Furthermore, all these states are resource rich with the exception of Perlis. Kelantan, Sabah and Sarawak and Terengganu, have large reserves of petroleum, natural gas, timber and agriculture land while Kedah has all except petroleum and natural gas.
World Bank (1993). The East Asian Miracle: Economic Growth and Public Policy. New York: Oxford University Press. The World Bank classified eight Asian economies that had “miraculous” economic growth rates (real GDP growth of around or above four per cent) from 1960 to 1990 as high performing Asian economies: Japan, the ‘Four Tigers’ – Hong Kong, the Republic of Korea, Singapore, and Taiwan, Province of China – and the three newly industrialising economies of Indonesia, Malaysia and Thailand.
World Bank (2008) “The Growth Report”, Washington DC. The 13 economies identified by the Commission on Growth and Development were: Botswana, Brazil, Hong Kong SAR, Peoples’ Republic of China (PRC), Indonesia, Japan, Republic of Korea, Malaysia, Malta, Oman, Singapore, Taiwan, Province of China and Thailand. http://www.growthcommission.org/index.php? Itemid=169&id=96&option=com_content&task=view
More critically high income inequality has remained relatively unchanged in Malaysia since Independence. Income inequality, measured through the Gini coefficient,5 has only reduced marginally from 0.513 in 1970 to 0.441 in 2009. Evidence of income and wealth inequality in Malaysia is widely available.6 Almost 83 percent of Malaysians earn less than US$10 a day while about 3 percent earn more than $20 a day. Almost 50 percent of total income in Malaysia is captured by the top 20 percent of households7 in Malaysia while the middle 40 percent has 36 percent and the bottom 40 only has 14 percent of total income in 2009 (Chun, 2010).8 The average monthly income for households in the top 20 percent was almost RM10, 000, while the average income for the middle 40 percent was RM3, 631 and the bottom 40 percent was RM1, 440. The average income of all three income groups was RM4, 025. Stated differently, in 2009, more than 80 percent of Malaysian households earned less than the national average (Mat Zin, 2011).9 The 10 Malaysia Plan10 noted that in 2009, the bottom 40 percent had a total household income level of less than RM2, 300 per month. There were a total of 2.4 million household
Income Gini coefficient is a measure of the distribution of income (or consumption) among individuals or households within a country from a perfectly equal distribution. A value of 0 represents absolute equality, and a value of 1 absolute inequality.
This paper provides some of the most recent studies on income inequality: McKinley, T. and P. Martin (2011) ‘Social inclusiveness in Asia’s Middle Income Countries.” Report prepared for Asian Development Bank and the International Labour Organisation http://www.scribd.com/doc/63639745/SocialInclusiveness-in-Asia%E2%80%99s-Middle-Income-Countries-Paper
Defining households has evolved. It has implications on individual welfare as a larger household would be worse off than a smaller household for the same amount of income theoretically. The first official poverty line in 1977 used 5.4 persons as a household. In 1987, household was 5.14 persons, in 2006, it was revised to 4.6 persons for Peninsular Malaysia and 4.9 for Sabah and 4.8 for Sarawak. It is likely that this figure has now been revised downwards following the decreasing size of the average household in Malaysia.
Chun, N. (2010) Middle Class Size in the past, present and future: A description of trends in Asia, Asian Development Bank Economics Working Paper Series No. 217. http://papers.ssrn.com/sol3/Papers.cfm? abstract_id=1688710
Mat Zin, R. (2011) Malaysia’s New Economic Model: An Assessment of Its Strategies for Inclusive Growth, Asian Development Bank. http://www.scribd.com/doc/63639744/Malaysia-s-New-EconomicModel-An-Assessment-of-its-Strategies-for-Inclusive-Growth-Paper
Economic Planning Unit (2010) The 10 Malaysia Plan, Malaysia. http://www.epu.gov.my/html/themes/epu/html/RMKE10/rmke10_english.html
in this category. More distressing was that the average income of the bottom 40 percent was only RM1, 440. Approximately 73 percent of these household were Bumiputera. Muhammad Abdul Khalid (2011)11 study using the Malaysia’s 2007 Household Income Survey provides the following results. 10 percent of Malaysian households per capita control 35 percent of the country’s wealth12 while the bottom 40 percent owned only 8 percent. The Gini coefficient for savings was 0.98, investment asset was 0.90 and real estate was 0.52 demonstrating very high concentrations of wealth in investment and savings assets. Muhammad’s research also showed that in all asset class, that the distribution of wealth was highly unequal, within the three major racial groups (Table 1). Table 1: Distribution of Asset Classes by Ethnicity in Malaysia in 2007 (%) Distribution
B Top 20 Middle 40 Bottom 40 50.8 41.6 7.6
C 49.8 38.4 11.9 I 54.0 42.4 3.6
real estate assets
B 50.8 42.2 7.0 C 49.6 38.8 11.6 I 54.3 42.7 3.1 B
C 92.6 7.4 0.0 I 95.8 4.3 0.0
94.5 5.5 0.0
Note: B – Bumiputera; C – Chinese; I – Indian. Source: Muhammad (2011) Muhammad’s research also found that the Bumiputeras remain the most backward community.13 72 percent of the 14.3 percent of Malaysians that were without wealth were Bumiputeras. In all asset classes, the Bumiputera share was lower than the Malaysian Chinese and Indian communities.
Muhammad AK (2011) Household wealth in Malaysia: Composition and inequality among ethnic groups in Jurnal Ekonomi Malaysia, 45: 71 – 80, Universiti Kebangsaan Malaysia. http://www.ukm.my/fep/JEM/pdf/2011-45/jeko_45-8.pdf
Wealth here refers to assets. In Malaysia, 96 percent of wealth comes from real estate while financial assets make up the rest (Muhammad, 2011).
An important caveat is that the Household Income Survey does not include government held wealth for Bumiputeras.
Table 2: Wealth Decomposition by Asset Classes by Ethnicity, Malaysia, in 2007 (in RM) Asset class Savings Investment Assets Financial Assets Real Estate Wealth Source: Muhammad (2011) We can make several inferences from the above points. First, the GOM have been successful at achieving high economic growth. Second, the GOM have also been successful in ensuring this growth reached the poorest Malaysians. Third, income and wealth inequality is significantly skewed and transcends race and religion. Fourth, the GOM economic strategy and policies to address wealth and income inequality for the past 55 years is a qualified success despite having national unity and social cohesion as the overriding objective in all its policies. Fifth, the GOM attempts to address inequality among Bumiputeras for the past 40 years is also a qualified success. Finally, it may be possible that the qualified success of government policies in addressing wealth and income inequality and the attendant challenges that it creates may partly explain the rise in social discontent among large segments of Malaysians leading to the many public protests that were listed earlier. The GOM argues that in generating economic growth, reducing poverty significantly and providing peace and order, they have indeed protected and promoted the common good. The GOM of Malaysia argues that its policies such as the Government Transformation Programme and the Economic Transformation Programme will continue to generate high economic growth, and address wealth and income inequality. Bumiputera 567 1853 2419 70453 72873 chinese 2795 4629 7423 120903 128326 indian 1026 2058 3083 84146 87229
Detractors note that it is the duty of any government to ensure that the common good of all Malaysians are protected and promoted. A government that cannot provide this nor is responsive to the demands of its citizens should be replaced through free and fair elections. Furthermore, if there is/are other group/s that can further enhance the common good, better than the existing government, they should be given the opportunity to govern. Finally, there are a significant number of Malaysians who believe that the GOM trickle down economic growth strategy actually does not promote the common good but the interests of a minority that is aligned to the ruling coalition and is responsible for exacerbating wealth and income inequality. How then can society determine what is the common good for all Malaysians when there is conflicting views? Here is where the challenge begins. Consider the following facts: • There is a perception of mistrust among the three major communities – especially between the politically dominant Bumiputeras (Malays in particular) not trusting the Malaysian Chinese community in particular in relation to economic power; • The underrepresentation of the Malaysian Indian community and the Orang Asals of Peninsular, Sabah and Sarawak in the economic, social and political spheres; • Malaysians cannot agree that a living wage (not minimum wage) can promote the common good; • The way Malaysians treat migrant workers and the fact that migrant workers in Malaysia, almost 25 percent of the labour force, do not have equal rights as their Malaysian counterparts; • • Only about 1 million Malaysians actually pay taxes; and The present government is actually popularly elected. Despite the well documented electoral fraud, mismanagement and corruption, and the high wealth and income
inequality, the majority of Malaysians have actually voted for successive Alliance and Barisan Nasional governments. The CCC identifies the ultimate importance of the political community in ensuring that the common good is protected and promoted (CCC, 1910). Who is this political community? The CCC points to the state – the GOM – as this political community that is responsible in defending and promoting the common good of civil society, its citizens and intermediate bodies. Since there is a difference in opinion of what this common good is between the state and large segments of its society, and where the state has regularly failed in its duty to protect and promote the common good fully, society must then first, as individuals and as communities have an understanding and agreement of what this common good is. Only when society has a clear understanding of what this common good is, and is prepared to defend and promote it, will the political community respond because ultimately, the political community is put into power by society.
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