We Want More And More…

“More is better”, really?

In 2018, Sultan Nazrin Shah said Malaysia must develop a more resilient society and economy, create a just and equitable society and take advantage of the current wave of technological transformation. Recently, His Majesty said, a nation’s success should not be measured solely by towering skyscrapers, expansive highways or robust economic growth, but by its commitment to upholding human dignity and supporting those facing life’s greatest challenges.

Ongoing chase for a better future for everyone is a constant. Governments then and now commit to programmes to meet these goals. Despite having credible economic growth in the last few years, economists cautioned we cannot rest on our laurels and need to have comprehensive reforms to achieve high-income (HI) status.

Macroeconomic indicators and optimistic news show it is possible. The World Bank said, Malaysia will hit the target by 2028.

Some are celebrating the appreciation of the ringgit to help speed up the process but the World Bank – Atlas Method – averages exchange rates over three years and adjusted for inflation. Sustained foreign exchange strength and real income gains is more relevant as any upgrade is fragile if the currency normalises.     

Sadly, official statistics showed that more than eight million Malaysians received from STR and Sumbangan Asas Rahmah (SARA) payments totalling RM15 billion and the figure is expected to increase to nearly nine million recipients by year-end.

Believing the economy is doing well and what the people really feel reflects a K-shaped economy i.e. different parts of the economy moving in opposite directions at the same time.

What’s next?

Are we knowledge and innovation-driven or still dependent on investment? We talked about high value activity and knowledge creation but our construction industry still suffers from low R&D and heavy reliance on low-skilled foreign labour.

Malaysia’s consumption-driven economy delivers short-term growth but with severe long-term risks.

Do we have large pools of capital and liquid financial markets to easily absorb foreign risks and dominate international venture capital and financial intermediation?

Apart from GNI/GDP, are our public services, infrastructure and national health systems efficient and robust?

In which areas do we have economic dominance?

Is our education system at par with other HI nations?

What about disparities between towns and states in terms of investments and high-value job opportunities, social safety nets and an aging population? Excessive inequality erodes social cohesion, triggers political polarisation and lower economic growth. The US has one of the worst distributions of income across its population.

Are our institutions strong enough with adequate enforcement, combating corruption, effective regulation on competition and an effective protection of property rights?

About 70.2% of the country’s formal workforce earn RM5,000 and below and the purchasing power erodes with the rising cost of living. The richest region generates more than seven times the income of the poorest state.

More than 60% of Malaysians lack access to any old-age pension scheme, and even those covered often receive inadequate payouts.

Our tax-to-GDP ratio is around 12%, one of the lowest in the region and significantly below the OECD average of roughly 34%. In advanced economies, taxes and transfers decrease income inequality but we raise social spending to do the job.

Are we ready to face tougher environmental and trade regulations?

A word of caution in chasing the HI status.

Our policies such as budget cuts on education and healthcare weaken essential public services and destabilise socio-economic developments. For subsidy removal, it inflates the cost of living and disproportionately harms the middle and lower-income groups.

For 80 years, both the IMF and World Bank have failed to provide resilience and stability to global finance.

Citizens and economists in HI countries frequently express discontent such as extreme cost-of-living, wealth inequality, and the “high-income trap”.

To remain competitive, work cultures become more stressful. Singaporean has some of the highest global burnout rates, poor work-life balance and 1 in 3 facing work-related stress or burnout. Malaysia is not far behind with 3 in 10 workers either unhappy or neutral about their jobs. In 2024, South Korea (GNI per capita of over US$36,000) showed 73.6% experiencing at least one mental health issue in the past year.

Suicide rates in South Korea, Singapore and Malaysia per 100,000 is about 29.1 (nearly three times the OECD average), 7.7 (highest in Southeast Asia) and 5.7 respectively.

And the cost of living is definitely higher for both Singapore and South Korea, making Malaysia one of the most cost-effective yet high-quality destinations.

Malaysia generally offers a high quality of life, through a relatively low cost-of-living, excellent healthcare access and strong cultural vibrancy. The official Malaysian Well-being Index (MyWI) highlights ongoing national progress, while global expat data routinely praises the country for its affordability and diverse lifestyle.

How can we ever have enough if we don’t appreciate what we have?

Rather than focusing solely on raising absolute national incomes, we should transform prosperity into subjective well-being where resources are converted efficiently into lives of meaning and fulfillment.

Economic measures and political agenda are not everything. Social, psychological and cultural needs present both a challenge and an opportunity to prove compassion, justice and an equitable society.

Whether we want to reset or rewire the economy, we need strong leadership with good governance to create a more competitive economic environment, a quality workforce, commitment to upholding human dignity, reducing disparities and supporting those facing life’s greatest challenges.

The immediate focus is on reducing the nine million that are still receiving STR and SARA payments.

“How much better to get wisdom than gold, to choose understanding rather than silver” – Jewish Proverb.

Prophet Muhammad (PBUH) said, “If the son of Adam had a valley of gold, he would love to have a second one; and if he had two valleys of gold, he would love to have a third, for nothing fills the belly of the son of Adam except dust. And Allah forgives he who repents to Him”.

What say you…

 

Saleh Mohammed