The Push For High-Income Status Vs Sustainability…

Meeting our wants must not compromise future generations to meet theirs as Earth has finite resources with limited capacity to absorb all our needs and wants at the same time. Additionally, progress is not just about increasing consumption but also improving the quality of life environmentally, economically, socially and human sustainability.

A study by evolutionary anthropologists, Colin Shaw and Daniel Longman argues that the modern world has developed faster than human biology can adapt. Constant pressure of today’s life will overstimulate the stress systems and erode both health and reproduction. Evidence ranges from global fertility declines to chronic inflammatory diseases. 

To attain high-income, countries are told to push for economic growth. The World Bank defined it as having a Gross National Income (GNI) per capita of about US$14,000. However, GNI fails to account for true sustainability as it does not subtract the costs associated with environmental depletion, pollution, social inequality and the long-term health of natural capital while incentivises unsustainable practices. Avoiding periods of gloom and doom can erode the foundations of long-term well-being.

A high-income nation isn’t necessarily always fully “developed” by other measures and a “grow first, clean up later” approach will not work.

Our Wawasan 2020 explicitly includes becoming a fully developed, high-income nation by the year 2020. Multiple crises derailed the plan. Low productivity, reliance on low-skill foreign labour and failure to shift to high-value industries trapped us in middle-income. 

Currently, our target is just high-income and the World Bank projected Malaysia to hit it by 2028. 

Is it realistic and sustainable?

There were many initiatives drawn up but the journey has been hindered by challenges like slow productivity growth, over-reliance on low-skilled labour, an education system not meeting industry needs, weak innovation, fiscal constraints (low tax revenue), governance issues (bureaucracy, “parasite companies”), political instability, social divisions and inequality.

Our holy grail is productivity and our innovation ecosystem. From 2014 to 2023, productivity grew by only 1.7%, among the slowest in the region. This makes sustainable, high-rate wage growth difficult without companies advancing further up the value chain and maintaining a “low-pay, low-skill, low-value” trap. For 2025, the Global Innovation Index (GII) ranks Malaysia 34th among 139 economies. 

Many households find it difficult to improve their standard of living since the rate of income growth is slow, unevenly distributed and heavily impacted by inflationary pressures – a disconnect between macro-level growth and local purchasing power. Our salary growth is among the lowest in South-East-Asia with high reliance on lowskilled labour. 

Private consumption continues to be a major contributor, accounting for 60% of nominal GDP in December 2025. But longterm sustainability faces challenges due to household debt and income inequality. Private consumption and household debt, as a share to GDP continue to rise, indicating the growth model may be unsustainable.

As for approved foreign direct investments, it does not reflect actual spending and may take months or years to materialise, while some might not proceed due to changing business conditions. Would suggest the government to officially use gross fixed capital formation (GFCF) to paint a more accurate picture. In 1997, Malaysia’s total investments (including public) was 42.5% of GDP (2018: 24.6%) and as at September 2025, it was only 18.4%.

High-income countries can have significant income inequality due to high living costs. According to the Organization for Economic Cooperation and Development (OECD), the United States has the highest poverty rate among the most developed countries at around 10.6% in 2024.

The current craze, to achieve high-income nation, we are aggressively luring data center investments. Palm oil companies are earmarking some of their vast tracts of land with data centres. Don’t forget, the West continues to scrutinise the palm oil industry, for tropical deforestation, biodiversity loss, and high carbon emissions. But what about data centres – aren’t they high-power “energy hogs”? Recently, Johor grapples with a water crisis due to a prolonged dry spell.

Will we actually reap the benefits of this infrastructure, or we are just a physical hub (contributing cheap land, electricity and water) to someone else’s digital empire? Locals will be hired for operational roles to reduce costs and leverage but specialists for complex, specialised or senior positions, are often imported. 

Digital infrastructure without digital sovereignty is a ‘lazy way’ in trying to achieve high-income. We must aim to be a digital leader instead of just being a data landlord. A welcomed deal with Arm Holdings plc, aiming to help Malaysia transition to high-value chip design is now facing controversy.

The worry is, a study found that 95% of US firms report zero measurable returns on AI investments (MIT, 2025) – a widening ‘productivity paradox’ phenomenon.

Analysis in a 2024 paper, “Sacrificing sustainability for a higher GDP growth rate”, reveals a negative bidirectional relationship between sustainable development goals (SDG) scores and GDP growth rate. A steady-state economy is necessary for planetary stability instead of a continuous extraction of resources.

Measuring the real wealth of a country goes beyond GDP. A holistic, multidimensional metrics approach is required to avoid environmental degradation – such as Adjusted Net Savings (ANS), Human Development Index (HDI), Inclusive Wealth Index (IWI), Gross National Happiness (GNH) and Sustainable Development Goals (SDG) Index.

We are in the 21^st century where increasing consumption and financial success is merely a bookkeeping tool.

It should be as era of awakening. We have been manipulated for too long and now talking about having trillionaires. Do we really need a human colony on the moon or Mars when the rich are creating turmoil and starting wars on Earth? We are rolling back and witnessing a rise in bigotry, protectionism and authoritarianism akin to tyranny.

The world’s 500 wealthiest individuals added a record US$2.2 trillion to their collective fortunes in 2025. Billionaires/oligarchs are

allegedly linked to specific economic and policy choices due to their influence on lawmakers, as seen in the US. We have been breeding them since the Industrial Revolution through capitalism and at the expense of the working class.

The so-called ‘developed nations’ are in unison to create unrest in many countries that do not subscribe to their thirst and greed for more. 

Genuine progress is about improving the quality of life and affordability. If basic needs such as housing and healthcare are beyond the masses, is that progress?

Speed without direction equals danger. Economic growth is used as a political mandate and cash handouts are given in the name of assisting the rakyat. Temporary relief may help to support life’s challenges temporarily but does not help the rakyat to be resilient.  

Sustainability cannot be built on adhoc fiscal transfers alone. There must be a, clear, long-term and comprehensive reform strategy that protects the most vulnerable. It is more pressing amid prospects of an ageing population and slow productivity growth.

A reminder – Singapore, one of the richest countries in the world, its total fertility rate plunged to a record low of 0.87 in 2025 as parenthood isn’t worth it despite years of cash incentives.

We do not inherit the Earth from our ancestors, we borrow it from our children.

What say you…

 

Saleh Mohammed