Tuesday, February 24, 2015

Book Review - The Establishment Post

The Colour of Inequality: Ethnicity, Class, Income and Wealth in Malaysia could not have come at a better time.

The book, launched in November last year, covers the themes of ethnicity, class, income and wealth in Malaysia, from the days of the Malay states.

It was published just as Malaysia enters the last leg of a socio-economic development agenda that began in 1970 and will end with Malaysia becoming a high-income nation in 2020.

The statistics-drenched book by Muhammed Abdul Khalid is just the sort of thing needed to make policymakers, technocrats and stakeholders from industries, involved in the crafting of the 11th Malaysian Plan, ask questions on upward mobility, asset ownership and wealth creation and why there are still huge disparities.

Dr Muhammed has painstakingly researched and assembled a heart-wrenching storyboard which argues that crippling policies from the days of the British administration, created practices that pushed deeper the wedges between races and classes and the talons of the super rich have made Malaysia what it is today.

New Economic Policy

He dispels in The Colour of Inequality repeated arguments that the NEP benefited only Malays when it came to poverty eradication. He says “the poverty rate among the Chinese dropped the most – it declined in relative terms from 26 per cent in 1970 to 5.4 per cent in 1990.”

When talking about poverty eradication programmes, he says they “have always been non-discriminatory”. He adds in The Colour of Inequality: “It appears to be biased towards the bumiputera precisely because majority of the poor are still the bumiputera.”

Dr Muhamad himself is said to have worked his way up the social and economic ladder. He is the research director at Khazanah Research Institute, a local think tank.

He also quotes former top-level Umno (United Malays National Organisation) leaders as saying that the bumiputera agenda, the affirmative action for Malays and other indigenous races in Malaysia categorised as bumiputera or “sons of the soil”, was not thoroughly discussed during Umno supreme council meetings and that Umno ministers were not bothered to look at problems faced by bumiputeras. One of the people he quoted was a former prime minister.

Little-known facts

As Dr Muhammed looks back at things past, a number of startling facts are exposed in The Colour of Inequality. That the Chinese were, in the late 19th century, the majority race in the Malay states. Malays were a minority. 

The Chinese men came by the junks to work in tin mining but the Chinese government had a policy prohibiting Chinese women from leaving the country. Once the ban was lifted, women rushed to the Malay states to be united with their husbands and this caused a huge spike in the Chinese population.

This was also when opium was the highest income earner for the British administration in the Malay states. Not rubber or tin, both of which the Malay states produced about half the global supply. It was opium that brought in the big bucks for the British. They not only exported it, but also encouraged the use of this substance by the labourers in the Malay states. This is to keep the labourers in stupor, for easy control. But in England, opium was banned.

Narrowing the inequality gap

The history of the Malaysia is a history of inequality, and Dr Muhammed has shown that the disparity between races and within the races that has been in existence for the last 100 years or so. However, steps must and can be taken to narrow the disparity.

One of Dr Muhammed’s suggestions is to review present day tax structure which he says are “favours the rich more than the poor and is contributing to the widening wealth gap”. In The Colour of Inequality, he says it is the income earner who is taxed more than the capital owner.

Maybe it is about time the tax structure and other policies are reviewed, and new ones are introduced to reduce the gap in Malaysian society. The year 2020 is not that far away.

Review by 
 Vanitha Nadaraj . Link here

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