The Malaysian Insight

ETHNIC-BASED policies are necessary to tackle worsening inequality among the Chinese and Indians, said a think-tank researcher.

Institute for R&D of Policy (IRDP) programme manager Ammar Atan said the Statistics Department’s household income surveys showed that the income gap between the richest and poorest families in the Chinese and Indian communities increased between 2016 and 2019.

The surveys showed that disparity between the top- and lowest-earning Bumiputera families, however, shrank in the same period, he said.

Ammar cautioned that the statistics do not reflect the true picture of the Bumiputera community, as Malays are lumped together with Bumiputeras from Sabah and Sarawak.

“Going forward, we need more transparency in terms of what constitutes ‘Bumiputera’ because they are all lumped together,” he told a webinar, titled “T20, urban poverty and socioeconomic issues”, on Thursday.  

“There is the question of whether Malays in the peninsula have performed better than other Bumis or other communities. And, whether Bumis in Sabah and Sarawak are left behind compared to Malays.”

The webinar was jointly organised by IRDP and the Research for Social Advancement think-tank.

Ammar said a comparison in the 2016 and 2019 surveys showed that the Gini co-efficient for disposable income worsened from 0.396 to 0.399 amomg the Chinese.

According to the co-efficient, which measures inequality, 0 indicates perfect equality while 1 refers to extreme inequality.

For the Indian community, the co-efficient went from 0.372 in 2016 to 0.399 last year.

For the Bumiputera community, the co-efficient improved from 0.38 to 0.37.

“We usually hear that there are problems among the Malay community, but this shows that there is also inequality among the Chinese and Indian communities,” said Ammar.

“This means we need policies based on locality, such as urban and rural areas, and also ones targeted at ethnic groups. Without these policies, the co-efficient among Chinese and Indians could worsen to 0.4.”

He added that on the whole, the Gini co-efficient for all households worsened from 0.399 in 2016 to more than 0.4 in 2019.

“According to the United Nations, a co-efficient of above 0.4% is considered unhealthy.”

Malaysia’s wealth is increasingly concentrated among the top 20% of households, while the middle 40%’s share has declined from 37.4% to 37.2%.

The national share of income for B40 households dropped from 16.4% in 2016 to 16% three years later, said Ammar. – August 8, 2020.