Malay & bumiputra rural voters will determine the winners or losers of coming Malaysia’s GE14


Down the wire with the Malays

– With urbanites caught up in social media debates, it will be the quiet rural folks who determine the winners (and losers) of GE14

IF you haven’t already heard this one before, it will be the Malay and bumiputra voters, mainly in rural areas, who will determine what the next government looks like.

Despite the racket from urbanites, be it in private discussions or from the many irate postings on social media, it will come down to the relatively quiet rural folks who make up the decisive voices.

Out of the 222 parliamentary seats, there are now 117 rural Malay seats in Peninsular Malaysia, following the delineation exercise – up from the previous 114 Malay majority seats in the previous general election. There are 19 seats each in Sabah and Sarawak, with predominantly bumiputra voters.

These 117 seats include the 52 constituencies in Felda settlements regarded the heartland of the Malays, where the primary concerns are racial and religious in nature.

Another election monitoring group, Tindak Malaysia, reportedly estimated the Malay majority seats at 115 – up one seat from the previous 114, before the delineation.

To form the government, all that’s needed is a simple majority of 112 seats. Prior to the dissolution of Parliament, the Barisan Nasional had 130.

Donald Trump won the United States presidency firmly backed by the rural areas, and not from that of New York, Los Angeles or Washington DC. In fact, he lost the popular vote by a bigger margin than any other US president in history, but he won, via the country’s electoral system, which saw each state assigned several votes that go to the candidate who wins the public vote in that state.

His Republican party won in what is regarded as swing states, such as North Carolina and Ohio, with huge rural votes. In fact, he won 67% of the rural American votes.

In Malaysia, our voting system is much simpler with its “first past the post” format, based after the British electoral system. Again, popular votes don’t count. But like in the United States, it will be the rural folks who will be the determinants. In Malaysia, it won’t be the traditionally anti-establishment Chinese voters in cities.

In the 2013 elections, there were 30 Chinese majority seats or 13.5% of the parliamentary seats, according to a recent news report, quoting social media analytics firm Politweet.

“The proportion of ethnic Chinese voters in these seats ranged from 52.27% (Beruas) to as high as 90.94% in Bandar Kuching.

“These seats can be found in Penang (7), Perak (5), Kuala Lumpur (5), Selangor (1), Melaka (1), Johor (3), Sarawak (6) and Sabah (2),” it said. From the 30 Chinese majority seats, the DAP won 29 and PKR one.

But Tindak Malaysia has claimed that the number of Chinese majority seats has dropped to 24. There is also another stark fact; even without the delineation exercise, the number of Chinese voters has continued to shrink sharply.

According to Malay Mail Online, despite blaming Chinese voters for the decline in votes for Barisan, they, in fact, only formed about four million of the total 13.3 million registered voters. It quoted Politweet founder Ahmed Kamal Nava as saying that the Chinese vote “is going to become less relevant to both Barisan/Pakatan Harapan over time because the Chinese majority seats are going to become mixed seats and eventually, Malay majority seats”.

The report also said that a comparison between the GE13 electoral roll and the electoral roll for 2017’s first quarter showed that the Chinese voters’ projection has already fallen by over one percentage point in seven states and in 79 of the 165 seats in the peninsula.

Going by current trends, the projection is that the number of non-Malays will continue to drop further, with some saying that by 2050, there could be 80% bumiputras and just 15% Chinese and about 5% Indians.

In 2014, 75.5% from the live birth total were bumiputras, followed by Chinese, at only 14% with Indians 4.5%, and others 6%.

Based on calculations, the Chinese birth rate at 1.4 babies per family in 2015 from 7.4% in 1957 means that their position in Malaysia will fall from 24.6% in 2010, 21.4% in 2015 to 18.4% or less in 2040.

In the 2013 elections, realising that it is the majority Malay votes that will tip the scale, the DAP readily tied up with PAS, hoping they would be able to capture Putrajaya. The DAP aggressively pushed the Chinese to vote for PAS, and many did willingly, but the pact failed to materialise. PAS paid a heavy price for sleeping with the enemy, because the rural Malays simply couldn’t accept the Rocket.

A random survey on PAS’ core voter base – rural Malays – by online portal FMT, found that many viewed its alliance with the “kafir” party DAP suspiciously.

PAS emerged a major loser in the 13th general election, managing to grab only 21 of the 73 parliamentary seats it contested. It even lost Kedah. In the 2008 polls, it secured 23 parliamentary seats.

PAS president Datuk Seri Abdul Hadi Awang must have found his dabbling with danger a painful one. It didn’t help that the relationship between the DAP and PAS had soured following the elections.

Fast forward to 2018. The DAP, again, is explicitly aware the Chinese cannot hope to dump Umno without the Malays, so a new pact with PKR, Parti Pribumi Malaysia and Parti Amanah Negara has been forged.

It is even prepared to drop its iconic Rocket symbol, its organising secretary Anthony Loke admitting the Malays are wary of it.

The test now is whether the Malays in the rural areas will accept the idea of having Tun Dr Mahathir Mohamad and Lim Kit Siang, whom the former had demonised the past 30 years of his political life, as emblems of a party taking care of their interest.

If no Malay tsunami materialises, and if the Chinese, again, place their chips on the Opposition – which seems to be the sentiment currently in urban areas – then, it will be the third consecutive elections in which the Chinese would have bet on the losing side.

The implications will be far-reaching for the community, especially if the Chinese representation in the government is weakened or non-existent when it involves legislation with religious overtones. It will also mean the possibility of being cut off from the mainstream involvement in crucial policy making and areas of development.

More so with whispers of a tie up between Umno and PAS, in some form, after the general election.

If the Barisan continues to get the mandate, as expected, DAP could end up occupying the biggest seats on the opposition bench since the rest of the Malay parties are generally untested, with PKR the exception.

Not many city folk, with the rising political temperature, want to hear or accept that this is simply a fight in the rural Malay heartland. Reality check: it will be the Malays and bumiputras who will have our fate in their hands.


By Wong Chun Wai, who began his career as a journalist
in Penang, and has served The Star for over 27 years in various
capacities and roles. He is now the group’s managing director/chief
executive officer and formerly the group chief editor.

On The Beat made its debut on Feb 23 1997 and Chun Wai has penned the column weekly without a break, except for the  occasional press holiday when the paper was not published. In May 2011, a compilation of selected articles of On The Beat was published as a book and launched in conjunction with his 50th birthday. Chun Wai also comments on current issues in The Star.
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Penang Forum Planning for Penang’s Future


NGO draws up own manifesto to assist the next state government

(From left) Anil, Ben, Dr Chee, Khoo Salma, Dr Anwar and Dr Kam at the press conference to launch the Penang Forum Agenda 2018 at Penang Heritage Trust in Church Street.
(From left) Anil, Ben, Dr Chee, Khoo Salma, Dr Anwar and Dr Kam at the press conference to launch the Penang Forum Agenda 2018 at Penang Heritage Trust in Church Street. 

PENANG Forum, a loose coalition of non-political civil society groups, has come up with its own ‘manifesto’ with emphasis on three principles namely good governance, social inclusion and sustainable development.

Dubbed the ‘Penang Forum Agenda 2018’, six members shared insights into various areas that could be improved by the new state government.

The agenda, supporting transit-oriented development, walkable downtowns, mixed-income housing, public green open spaces and social inclusion was discussed by forum members comprising of activist Datuk Dr Anwar Fazal, scientist Dr Kam Suan Pheng, social activists Dr Chee Heng Leng, Khoo Salma Nasution, Anil Netto and Ben Wismen.

Khoo Salma said in the past 10 years, the state made progress on some fronts but it was over dependent on growth driven by the property sector and tourism.

“A far-sighted vision for Penang requires a paradigm shift to new urbanism, sustainable transport and environmental resilience.

“We are willing to work with the next state government to come up with different economic strategies so that we are not over reliant on the construction sector and mass tourism,” she told newsmen at the Penang Heritage Trust in Church Street after the event yesterday.

Khoo Salma urged the new government to look into making public buildings, spaces and transport accessible for people with disabilities.

“Employment and housing quotas should be fulfilled for them as well.

“Public facilities at council and state flats need to be updated to an elderly-friendly design,” she said.

Khoo Salma also urged for the new state government to adopt a comprehensive approach to the housing policy, prioritising social housing for the low-income category.

Anil said that affordable housing should be not more than three times the annual income for the middle-income group.

“It does not mean we need to stop building but we need to look at the needs of the population, we should look for property development for the two categories rather than high-end development.”

Scientist Dr Kam shared that the agenda was not only to give ideas to political parties but to survive beyond the campaigning period.

“If they like certain things or better still all of our recommendations, it would be great.

“I hope that the next state government will take a look at our manifesto and incorporate some of the ideas,” she said.

Dr Anwar said the Penang Forum Agenda would be shared with all concerned parties as well as posted online for the public to view.

For further details on the agenda visit https://penangforum.net/  by N. Trisha The Star

Penang Forum has a list of demands which it calls on Penang’s newly
elected officials of 2018 to act upon and deliver. These demands are
related to the three principles of good governance, social inclusion and
sustainable development. Read More

China buyers eyeing Penang property in growing tourism


Worthy investment: Mah Sing sales executive Victor Cheah (left) introducing the M Vista project to visitors at StarProperty.my Fair in Queensbay Mall, Penang.
Visitors checking out MTT Properties &  Development Sdn Bhd’s Botanica CT Centre during the StarProperty.my Fair in Queensbay Mall, Penang.

PENANG recently come under the radar of investors from China, said Property Talk principal Steven Cheah.

“It used to be Australia that attracted their interests, but now it is Penang. So, we can expect to see potential house buyers from China at the fair,” he said.

Cheah was speaking at the sideline of the StarProperty.my Fair 2018 which opened at Queensbay Mall yesterday and will end on Sunday.

He said the China investors were interested in high-rise properties near the sea priced at around RM1mil to RM2mil.

Cheah added that house buyers were now more selective due to higher interest rates.

“Most of them will be paying attention to the new launches in the southwest district and in Seberang Prai, where it is still possible to find properties priced below RM500,000,” he said.

Cheah said with the right location, good road connectivity, product type and concept, demand for properties in Penang would still be strong.

Potential house buyers checking out BinWan Development Sdn Bhd’s Gelugor Heights during StarProperty.my Fair in Queensbay Mall, Penang. Potential house buyers checking out BinWan Development Sdn Bhd’s Gelugor Heights during StarProperty.my Fair in Queensbay Mall, Penang.

“Malaysia’s strong fundamentals augur well for the outlook going forward.

“Malaysia’s population is young with an average age of 30 to 31 years old, and many people are still looking to start a family. This is a good sign for the property market.

“There will be weaknesses in between as the market is adjusting to the supply and demand situation.

“From the medium to long term perspective, property is still one of the choice investments preferred by investors,” he said.

Meanwhile, Yew Chor Hian, who hails from Kedah, said he was interested in a high-rise property priced at around RM600,000.

“I work in Bayan Baru, so I am interested to stay on the island.

Visitors renewing The Star newspaper subscription at The Star info counter at the fair.
Visitors renewing The Star newspaper subscription at The Star info counter at the fair.

“The size and location are important to me,” he added.

Australian Ray Stubb said he was looking for a high-rise condominium.

“We are interested in getting a unit near the sea,” he said.

A total of 17 exhibitors are displaying their products at the fair, of which 15 are developers.

The developers are SPNB Aspirasi Sdn Bhd, Mah Sing Group Bhd, Ewein Zenith Sdn Bhd, Iconic Land Sdn Bhd, Regata Maju Sdn Bhd, JKP Sdn Bhd, SP Setia Bhd, MTT Properties & Development, Galeri Tropika Sdn Bhd, Devoteshens Sdn Bhd, Binwan Development Sdn Bhd, Bertam Properties Sdn Bhd, Corfield Development Sdn Bhd, Penang Development Corporation and Pembangunan Rasa Sempurna Sdn Bhd.

The other two exhibitors are Property Talk, a Penang-based real estate agency, and East West One Marketing Sdn Bhd, which is an oil palm investment company.

The Star by David Tanby david Tan

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 Bringing smiles to house buyers

MCA launches its general election manifesto – a plan for better future


KUALA LUMPUR: MCA has unveiled the party’s manifesto for the general election, just some 12 hours after Prime Minister Datuk Seri Najib Tun Razak revealed Barisan Nasional’s manifesto on Saturday (April 7) night.

Party president Datuk Seri Liow Tiong Lai outlined MCA’s 10 promises and 10 initiatives for the next five years, which will complement Barisan’s manifesto.

He said MCA will become the key driver of various initiatives targeting the masses with its main pillar being youth empowerment.

Liow also stressed on the party’s commitment towards transforming MCA-established education institutions into a global education hub, the second pillar of MCA’s 14th General Election manifesto.

“As MCA’s roots still rest with the lower income groups, we must also continue to look after the well being of the people requiring assistance. This is the third pillar, social economic well-being.

“In order for this agenda to succeed, a multi-racial approach must be adopted to tackle various issues that confront the community.

“The party will continue to reach out to understand their needs through active stakeholder engagements,” Liow said during the unveiling ceremony at Wisma MCA here on Sunday morning.

This is the first time MCA is having its own manifesto for the general election.

MCA’s 10 promises are:

1. Safeguard moderation

– Uphold the Federal Constitution and Rukun Negara

2. Ensure checks and balances

– Represent the constitutional rights of Malaysian Chinese and other communities

3. Youth and women empowerment

– New businesses, jobs and training opportunities

– Appoint

youth and women into key positions

– Reskilling youths for digital revolution

4. Enhance the quality of Chinese education

– Committed towards recognising the Unified Examination Certificate (UEC)

– Systematic approach in construction of new SJK(C)s and allocations

5. Setting forth education in the world stage

– Modernise and globalise education through UTAR, TARUC and Vtar

6. Harnessing the Belt and Road Initiative

– Connectivity with China and Asean

– Open up trade opportunities in China

7. Digital economy and innovation

– Help SMEs ride on wave of e-commerce

8. Quantum leap in business and finance

– Establish the Kojadi Co-operative Bank

– Enhance the functions of the Secretariat For the Advancement Of Malaysian Entrepreneurs (SAME)

9. Neo-urbanised townships

– Transforming new villages

10. Accessible healthcare

– Establish UTAR Hospital with Western and complementary medicine

MCA’s 10 initiatives are: 

 

1. Establish a Central Monitoring Unit

– monitor fair and effective implementation of government policies

2. Global and regional connectivity

– MCA Belt and Road Centre to strengthen ties with China

– make Malaysia a gateway to China’s Belt and Road Initiative in Asean

3. Establish a Digital Economy and Innovation Council

– gather feedback for formulation of policies and legislation

4. World class tertiary education

– UTAR to set up teaching hospital in Kampar

5. Developing the next generation

– transform TARUC into full-fledged technical university

6. Technical and vocational education training

– expand Vtar Institute into a well-equipped TVET development and training institution

7. Wealth generation for SMEs and lower and middle income groups

– introduce an investment scheme for Malaysian Chinese

8. Neo-urbanised townships

– stimulate and modernise new villages

9. Protecting welfare of women, children and the elderly

– champion the progress of women in Malaysia

– help stateless Malaysians get citizenship

– ensure enforcement of legislation against paedophiles

10. Continue outreach services for the community through the:

– Public Services and Complaints Bureau

– Chang Ming Thien Foundation

– 1MCA Medical Foundation

– Legal Advisory and Women’s Aid Centre

A plan for better future

Manifesto aims to lessen burdens the community faces now

KUALA LUMPUR: The rising cost of living and the widening income gap are what the public is most concerned about these days, says Datuk Seri Liow Tiong Lai.

The MCA president said the urgency of the situation prompted MCA to come out with specific actions to address it in the next five years.

These actions are listed out in MCA’s 14th General Election Manifesto with 10 promises and 10 initiatives which the party must implement, he added.

Ready for battle: Liow, MCA deputy
president Datuk Seri Dr Wee Ka Siong and other senior party leaders at
the launch of the manifesto at Wisma MCA in Kuala Lumpur. — SAM THAM/The
Star

“This also needs the support of the Government, including allocations for execution.

“The MCA’s performance in this election will have a direct impact on the party’s efforts to help the people,” Liow said when launching the manifesto at Wisma MCA here yesterday.

On GE14, Liow said voters aged between 21 and 35 made up 45% of total voters.

“The youth play an important role in the country’s economic development and democracy,” he said when outlining the manifesto, which focuses on steps to help the people, especially youth, to progress.

Full turnout: MCA members listening to
Liow’s presentation of the manifesto for GE14 during the launch at the
Wisma MCA in Kuala Lumpur.

 

It spans education, training, jobs, business and investment opportunities.

Saying that the MCA’s political struggle is for the long haul, Liow assured the people that the party would not make empty promises to fish for votes.

On that note, Liow said it was important to not only address current issues but also to create favourable conditions for the Chinese community’s youth to face new challenges.

“There will be major changes in the global economy, labour market and business.

“The digital revolution will not only encourage the growth of a new economy but also change the lifestyle of future generations.

“The youth of today will dominate in this major change,” he said.

Saying that education is the foundation of every nation, he pointed out that the 69-year-old MCA’s role in the sector has evolved to meet changing times, from pre-school to primary school, vocational training to tertiary education.

Liow and MCA deputy president Datuk Seri Dr Wee Ka Siong (left) with the manifesto booklet.

Singling out the party’s 16-year-old Universiti Tunku Abdul Rahman (UTAR), which is ranked second in Malaysia after Universiti Malaya by Times Higher Education, he said it is in the process of setting up its teaching hospital in Kampar, Perak.

“UTAR Hospital is set to be a premier healthcare institution that combines modern and complementary medicine like traditional Chinese medicine and Ayurveda,” he said of the party’s promise to provide accessible and quality healthcare to the rakyat.

In confronting global competition and pressure from the rising cost of living, Liow said MCA promises to open up more economic opportunities, including setting up Kojadi Co-operative Bank with branches in various states to provide financing for young entrepreneurs and small to medium enterprises.

“Times have changed. While we face more challenges, we also encounter more development opportunities,” he said of how the party consistently works hard to help the community brave the changing times.

On the country’s 465 new villages set up by the British colonial government with MCA’s help during the Emergency (1948-1960) to cut contacts between the Chinese community and communists of the era, Liow said those “barbed-wire” settlements have evolved over the decades.

He said MCA has drawn up plans for a digital revolution in these villages to rejuvenate them.

 

Sources: The Star, by foong pek yee, tho xin yi, and royce tan

Malaysia’s low wages: low-skilled, low productivity, low quality, reliance on cheap foreign workers! Need to manage!


Survey: Most workers not paid enough to achieve minimum acceptable living standard

 

Wages too low, says Bank Negara – Survey: most workers not paid enough to achieve minimum acceptable living standard

ALTHOUGH the income levels of Malaysians have increased significantly over the years, voices of discontent are mounting over the decline in purchasing power.

Low and depressed salaries are among the grouses of executives and non-executives amid the apparent lifestyle changes of Malaysians.

With the rising cost of living, they lament that there is now less room for long-term savings and investments.

According to the Employees Job Happiness Index 2017 survey by JobStreet.com, one in three Malaysian employees want a pay rise, with rewards constituting 52% of the domestic workforce’s motivation to work.

In its 2017 Annual Report, Bank Negara points out that the expenditure of the bottom 40% (B40) of Malaysian households has expanded at a faster pace compared with their income.

From 2014 to 2016, the average B40 income level grew by 5.8% annually, marginally lower than the 6% growth in the B40 household spending in the same period.

It is also worth noting that half of working Malaysians only earned less than the national median of RM1,703 in 2016.

The central bank, in consideration of the low-wage conundrum, has recently recommended that employers use a “living wage” as a guideline to compensate their employees for their labour.

Essentially, the living wage refers to the income level needed to achieve a minimum acceptable standard of living, depending on the geographical location.

Citing Kuala Lumpur as an example, Bank Negara estimates that the living wage in the city two years ago was about RM2,700 for a single adult. The living wage estimate for a couple without a child was RM4,500, while for a couple with two children, the living wage was RM6,500.

As much as Malaysians support higher wages, which can outgrow escalating living cost, the bigger question is whether their employers are willing to increase wages significantly.

Also, is it realistic for employers to pay higher salaries in line with the suggested living wage?

Speaking to StarBizWeek, Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan says that the living wage is unsuitable for adoption in Malaysia – for now.

He believes that the living wage will turn out to be damaging to the domestic labour market, given the rising cost of doing business in recent times.

Shamsuddin: While employers in Malaysia are more than happy to compensate workers for their work, people must also understand that they are bogged down by escalating costs. << Shamsuddin: While employers in Malaysia are more than happy to compensate workers for their work, people must also understand that they are bogged down by escalating costs.
Shamsuddin: While employers in Malaysia are more than happy to compensate workers for their work, people must also understand that they are bogged down by escalating costs.

“The living wage concept is unrealistic in Malaysia for the time being. While employers in Malaysia are more than happy to compensate workers for their work, people must also understand that they are bogged down by escalating costs.

“However, if the workers are proactive and upskill themselves to increase their productivity, then I do not see any reason for employers to refrain from offering higher pay packages.

“The Government on its part, should not micro-manage the economy to the extent of telling the employers how much to pay their workers. Instead, the Government can provide various incentives to the employers to bring down costs, which will translate into higher salaries or even exempt the employees’ bonuses from tax,” he says.

Socio Economic Research Centre executive director Lee Heng Guie welcomes Bank Negara’s living wage guideline “to prevent a wage employee from the deprivation of a decent standard of living”.

In order to push for the acceptance of a living wage in Malaysia, Lee recommends that government-linked companies (GLCs) adopt the concept gradually.

“The enforcement of commitments toward the living wage is a complex and costly issue, and more importantly, should be paid voluntarily by the employers.

“This would require extensive consultations and engagements with the stakeholders.

“Perhaps, as one of the largest employers in the country, GLCs can incorporate the living wage clause in their suppliers’ procurement contracts,” he says.

Concerns about Malaysia’s low-wage environment are not only centred on the low-skilled workers but across-the-board, as even executives lament about being lowly-compensated.

Are Malaysians being paid enough?

Based on data from the Statistics Department’s Salaries and Wages Survey Report 2016, most Malaysian workers are still paid significantly lower than the desired amount to achieve “minimum acceptable living standard”, at least in Kuala Lumpur.

Nearly 50% of working adults in Kuala Lumpur earned less than RM2,500 per month in 2016, notably lower than the RM2,700 living wage as suggested by Bank Negara.

In fact, up to 27% of households in Kuala Lumpur earned below the estimated living wage in 2016.

While wage growth has exceeded inflation over the years, real wage growth has been largely subtle. Real wage refers to income adjusted for inflation.

According to the MEF’s website, the salaries of executives were expected to grow by 5.55% in 2017, compared with 6.31% in 2013. As for non-executives, the average salary was anticipated to increase by 5.44% in 2017, down from 6.78% in 2013.

Given the 3.7% headline inflation registered in 2017, executives’ salaries may have just inched up by 1.85% on average, after factoring in inflation.

As for non-executives, their real wage could have grown by 1.74%, lesser than the executives in Malaysia.

While a slight moderation in headline inflation is expected this year, the purchasing power of Malaysians is unlikely to improve significantly.

In an earlier report by StarBiz, Shamsuddin described 2018 as a “bad year for employees and employers”, and projected Malaysians’ average salary increment to be lower than last year.

He blamed several new policies and measures introduced by the government such as the mandatory requirement for employers to defray levy for their foreign workers and the introduction of the Employment Insurance System, which would increase the costs borne by domestic businesses.

“It will be difficult for employers to raise salaries after this, given such dampeners,” he was reported as saying.

The biggest challenge now is to strike a balance between the market’s ability to compensate a worker and the worker’s required income level to achieve a minimum acceptable standard of living.

Sunway University Business School professor of economics Yeah Kim Leng says that more efforts have to be made to enhance the business and investment climate, in order to entice existing firms to expand and upgrade while new firms and start-ups emerge to create more high-paying jobs.

Yeah: A good quality and inclusive education system coupled with sound economic policies and effective implementation have enabled the two countries to sustain growth. << Yeah: A good quality and inclusive education system coupled with sound economic policies and effective implementation have enabled the two countries to sustain growth.
Yeah: A good quality and inclusive education system coupled with sound economic policies and effective implementation have enabled the two countries to sustain growth
.

He also calls upon business owners and employees to forge appropriate wage-setting mechanisms, which are benchmarked against the productivity of the workers.

“The Government should consider additional fiscal incentives for firms that provide worker benefits to meet the living wage standard. For example, double tax deduction for transport allowance and other cost of living adjustments for the lower-salaried employees,” states Yeah.

Meanwhile, Lee opines that employees should be given a higher share of the profit generated by their employers moving forward, in line with the practice in many high-income nations abroad.
 

“It is actually reasonable for Malaysian employers to allocate a larger chunk of their profits to reward their workers and motivate them,” he says. 

In 2016, the compensation of employees to gross domestic product (CE-to-GDP) ratio in Malaysia improved to 35.3%. The CE-to-GDP ratio shows the workers’ share in the profits made by business owners.

For every RM1 generated in 2016, 35.3 sen was paid to the employee and 59.5 sen went to corporate earnings, while five sen was given to the government in the form of taxes.

In its 11th Malaysia Plan, the Government aspires to increase the CE-to-GDP ratio substantially to 40%, from 34% in 2013.

While Malaysia’s CE-to-GDP ratio has continued to improve over the years, it is notably lower than several other high and middle-income countries.

The 11th Malaysia Plan document stated that the country’s CE-to-GDP ratio was lower than Australia (47.8%), South Korea (43.2%) and even South Africa (45.9%).

In an earlier media report, however, Malaysian Institute of Economic Research executive director Zakariah Abdul Rashid hinted that Malaysia was unlikely to reach its CE-to-GDP ratio target by 2020.

This was mainly as a result of Malaysia’s lower-than-expected productivity growth.


Low-wage conundrum

 According to Bank Negara, the main underlying cause of Malaysia’s low-wage environment is the high numbers of cheap foreign workers.

Governor Tan Sri Muhammad Ibrahim says that the country should cut back on its foreign worker dependency to drive higher wages for Malaysians across-the-board.

“In Malaysia, our salaries and wages are low, as half of the working Malaysians earn less than RM1,700 per month and the average starting salary of a diploma graduate is only about RM350 above the minimum wage.

“It is high time to reform our labour market by creating high-quality, good-paying jobs for Malaysians,” he says.

Echoing a similar stance, Yeah says that the continuing reliance on foreign workers has resulted in a predominantly low wage-low productivity-low value economy, with many features of a middle-income trap.

“On one end of the wage-skill spectrum, the low-skilled jobs are being substituted by easy availability of unskilled foreign workers, thereby keeping the blue-collar wages from rising.

“At the other end, skilled job wages are being depressed by insufficient high-wage job creation, weak firm profitability amid rising market competition and excess capacity, industry consolidations and other factors resulting in a slack labour market,” he says.

Lee: The enforcement of commitments toward the living wage is a complex and costly issue, and more importantly, should be paid voluntarily by the employers. << Lee: The enforcement of commitments toward the living wage is a complex and costly issue, and more importantly, should be paid voluntarily by the employers.
Lee: The enforcement of commitments toward the living wage is a complex and costly issue, and more importantly, should be paid voluntarily by the employers.

It is worth noting that the share of high-skilled jobs has reduced to 37% in the period from 2011 to 2017, as compared to 45% from 2002 to 2010.

Malaysia has come a long way since its independence, transforming itself from a largely rural agragrian country to a regional economic powerhouse, which is driven by its strong services and manufacturing sectors.


While industrialisation and automation have grown robustly since the 1990s, economists feel that the country has not managed to substantially move up the value chain compared with other countries such as Singapore.

The lack of a high-skilled workforce, low productivity, employment opportunities to cater to high-skilled professionals and the presence of cheap foreign workers have all weighed down on the Malaysian economy, particularly the income levels of Malaysians.

Citing the examples of Singapore and Australia, which are successful in raising wages historically, Yeah says that structural reforms should be undertaken in Malaysia to reverse the low-wage conundrum.

“A good quality and inclusive education system coupled with sound economic policies and effective implementation have enabled the two countries to sustain growth, raise productivity and wages and shift to higher-value activities,” he says.

Sources: by Ganeshwaran Kana, The Star

Economist: Manage labour issues to achieve high-income economy

Cheap manpower: While Malaysia has clearly
benefitted from the presence of foreign workers, the role that foreign
workers play in the Malaysian economy must keep up with the times.

WHY are wages still low in Malaysia?

Well, there are six words to describe the main reason for this – “high dependence on low-skilled foreign workers”.

The issue of Malaysia’s huge reliance on low-skilled foreign labour has been raised time and again, but only moderate progress has been made in alleviating the situation.

Low-skilled foreign labour remains a prevalent feature of Malaysia’s economy, and according to Bank Negara, it is a major factor suppressing local wages and impeding the country’s progress towards a high-productivity nation.

As the central bank governor Tan Sri Muhammad Ibrahim puts it, Malaysia is currently weighed down by a low-wage, low-productivity trap, with the contributing factor being the prolonged reliance on low-skilled foreign workers.

While their existence may benefit individual firms in the short term, they could impose high macroeconomic costs to the economy over the longer term.

“Easy availability of cheap low-skilled foreign workers blunts the need for productivity improvement and automation. Employers keep wages low to maintain margins,” Muhammad says.

“Unfortunately, this depresses wages for local workers. The hiring of low-skilled foreign workers also promotes the creation of low-skilled jobs,” he adds.

From 2011 to 2017, the share of low-skilled jobs in Malaysia increased significantly to 16%, compared with only 8% in the period of 2002 to 2010. Apart from that, local economic sectors that rely on foreign workers such as agriculture, construction and manufacturing also suffer from low productivity.

Nevertheless, it is an undeniable fact that foreign workers do contribute somewhat to Malaysia’s economic growth.

The World Bank, in its study about three years ago noted that immigrant labour both high and low-skilled, continued to play a crucial role in Malaysia’s economic development, and would still be needed for the country to achieve high-income status by 2020.

The global institution’s econometric modeling suggested that a 10% net increase in low-skilled foreign workers could increase Malaysia’s gross domestic product (GDP) by as much as 1.1%. For every 10 new immigrant workers in a given state and sector, up to five new jobs may be created for Malaysians in that state and sector, it said.

Even so, the World Bank acknowledged that the influx of foreign labour did have a negative impact on the wages of some groups.

Its study found a 10% increase in immigration flow would reduce wages of the least-educated Malaysians, which represents 14% of the total labour force, by 0.74%. Overall, a 10% increase in immigration flow would slightly increase the wages of Malaysians by 0.14%.

According to Muhammad, while some argue that foreign employment creates economic activities, which consequently create jobs for local employment, it is neither the most efficient nor the desired route to create more mid-to-high-skilled jobs.

“Compared with local employment, foreign workers repatriate a large share of their incomes, which limits the spillover or multiplier effect on the domestic economy,” he explains.

Total outward remittances in 2017 stood at RM35.3bil, of which the bulk was accounted for by foreign workers.

In addition, Muhammad says high dependence on low-skilled foreign workers will also have an adverse effect of shaping Malaysia’s reputation as a low-skilled, labour-intensive destination.

Bank Negara says while Malaysia has clearly benefitted from the presence of foreign workers, the role that foreign workers play in the Malaysian economy must keep up with the times.

The central bank believes critical reforms to the country’s labour market are very much within its reach, and it should continue to gradually wean its dependence on foreign workers.

Malaysia should seize the opportunity now to set itself on a more productive, sophisticated and sustainable economic growth path, it says.

According to Muhammad, cutting back on foreign worker dependency can help to drive higher wages for Malaysians across-the-board.

The Government’s efforts in reducing the country’s dependency on low-skilled foreign workers have been ongoing since the implementation of the 8th Malaysia Plan (2001-2005), with greater clarity and a renewed focus to resolve the issue at hand upon the implementation of the 11th Malaysia Plan.

This has resulted in the steady decline in the share of documented foreign workers from 16.1% in 2013 to 12.0% of the labour force in 2017.

More can be done to build on the progress made, Bank Negara says, while proposing a five-pronged approach to managing foreign workers in Malaysia.

Firstly, it says, there must be a clear stance on the role of low-skilled foreign workers in Malaysia’s economic narrative. Secondly, policy implementation and changes must be gradual and clearly communicated to the industry.

Thirdly, existing demand-management tools (such as quotas, dependency ceilings and levies) can be reformed to be more market-driven, while incentivising the outcomes that are in line with Malaysia’s economic objectives.

Fourthly, there is room to ensure better treatment of foreign workers, be it improvements in working conditions or ensuring that foreign workers are paid as agreed. Lastly, it is also important to note that the proposed reforms must be complemented with effective monitoring and enforcement on the ground, particularly with respect to undocumented foreign workers.

An economist tells StarBizWeek that addressing the high reliance on foreign workers is pertinent for Malaysia’s transition into a high-income economy.

“Malaysia needs to shift its focus from importing cheap labour to managing labour flow that can maximise growth and facilitate its structural adjustment towards a higher income economy,” he says.

“It has been far too long for our economy to be swamped with foreign workers who are unskilled, or have low skill sets that could not contribute meaningfully to Malaysia’s aspiration of becoming a high-income economy,” he adds.

By Cecilia Kok, The Star

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‘Urgent need for coordinated action’ – TheWorldNews.net

 

Bank Negara refutes report on living wage – Business News

 

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Kim Jong-un says he is ‘committed to Korean denuclearisation’ in Beijing talks



North Korea’s leader Kim Jong-un has promised President Xi Jinping that he will follow through the wishes of his father and grandfather in denuclearising the Korean peninsula, but added he wants assurances from the United States and South Korea.

The leader of the reclusive state made the remarks during a trip to China, his first overseas visit since he became North Korea’s leader, according to the state-run Chinese news agency Xinhua.

Kim, the third generation of his family to lead his country, said the situation on the Korean peninsula was improving and that his government has taken steps to ease tensions, Xinhua reported.

North Korean leader Kim Jong-un leaves Beijing after surprise visit >>

Kim added that if the US and South Korea were willing to respond to North Korea’s efforts with sincerity the nuclear issue “can be solved”.

“Our unswerving stance is that we will make efforts towards the denuclearisation of the peninsula,” Kim was quoted as saying by Xinhua.

President Xi pledged to work with North Korea to achieve denuclearisation.

“China is willing to continue to make a constructive impact on the Korean peninsula problem,” President Xi said. He called upon all sides to solve the problem through dialogue, Xinhua reported.

Tensions have risen on Korean peninsula after North Korea has increased nuclear weapons tests.

The United Nations has enforced a series of sanctions to try to rein in Pyongyang’s nuclear ambitions.

Hopes of a breakthrough in the crisis have risen since the announcement that North and South Korea’s leaders have agreed to meet.

Beijing is North Korea’s long-standing traditional ally, but ties have been frayed by North Korea’s pursuit of nuclear weapons and China’s support of UN sanctions.

Pang Zhongying, a senior fellow at the Ocean University of China in Qingdao, said Kim was securing China’s support ahead of his meeting with US President Donald Trump, scheduled to be held by May.

“By denuclearisation, Kim actually means the whole Korean peninsula should be denuclearised and that the nuclear weapons deployed by the US in South Korea should be withdrawn,” Pang said. “Can the US really accept that request? The gesture means that the chance of a significant breakthrough between Kim and Trump may be slim.”

Kim’s visit evidence China and North Korea remain allies, analysts say  >>

Paul Haenle, director of the Carnegie-Tsinghua Centre in China, agreed Kim was looking for support from Beijing ahead of his meetings with South Korea’s president and Trump.

”Just as Kim may have felt he had secured some leverage against Xi having independently secured summits with Trump and Moon, he’ll now feel more confident knowing where things stand with Beijing heading into those same meetings,” he said.

White House press secretary Sarah Huckabee Sanders said the Chinese government had briefed the Trump administration about the visit on Tuesday.

The Trump administration sees the development “as further evidence that our campaign of maximum pressure is creating the appropriate atmosphere for dialogue with North Korea”, she said.

Beijing residents left in the dark during Kim Jong-un’s unexpected visit  >>

Kim arrived by train in Beijing on Monday and left the following day, with his trip to China coming just days before a planned meeting with South Korean President Moon Jae-in and ahead of the possible summit with Trump.

Speculation about a visit by Kim to Beijing came earlier this week after a train similar to the one used by Kim’s father was seen in the Chinese capital.

Ri Sol-ju, Kim’s wife, was also part of the delegation to Beijing, Xinhua reported.

China’s Premier, Li Keqiang, Vice-President Wang Qishan and Politburo Standing Committee member Wang Huning also met the North Korean leader.

The green armoured train carrying the North Korean leader returned to the reclusive state at about 6am on Wednesday across a bridge connecting the two countries in Dandong, Liaoning province.

Chinese police had blocked access to the area around the bridge before the train’s arrival.

Armed police vehicles were also seen in the area.

North Korea agrees to inter-Korean talks to discuss possible April summit  >>

Access to parts of the Yalu River riverbank, which separates North Korea and Dandong, were blocked. Some police officers also stopped people from taking pictures of the bridge before the train’s arrival.

“I can only say that a situation is happening here,” a police officer at one of the blocked roads told the South China Morning Post.

About three minutes after the train passed over the bridge, police officers finally allowed pedestrians to enter the area.
As the Post visited the area in the early hours of Wednesday – before the area was cordoned off – five plainclothes police officers approached and asked staff to leave.

They did not explain why, only saying “it was not safe” to be there so late at night.

Source: South China Morning Post by Phila Siu is reporting from Dandong

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