<\/span>A silly obsession?<\/strong><\/span><\/h2>\nRecently, Najib said the ambitious, broad-based National Transformation Programme (NTP)\u00a0helped Malaysia narrow the gap<\/a> in reaching the high-income target from 33% to 18% between 2010 and 2016.<\/p>\nHe said this was commendable as the NTP had been instrumental in propelling the country out of the middle-income trap in 2009.<\/p>\n
But as the clock ticks, will Malaysia reach its high-income ambitions?<\/p>\n
Lee Hwok-Aun, senior fellow at the Institute of Southeast Asian Studies (Iseas), believes so, \u201cas long as our GNI per capita grows faster than the GNI per capita of high-income countries.\u201d<\/p>\n
\u201cThis combination will surely persist, so Malaysia is on track,\u201d he tells iMoney in an email interview.<\/p>\n
Hwok-Aun added that Malaysians should stop fussing over whether it will happen in 2020 or even before or later.<\/p>\n
\u201cPassing the high-income line gains prestige and symbolic success, but does not lift living standards or socioeconomic development into a higher realm.<\/p>\n
\u201cSo let’s not get too triumphant about it, which breeds an obsessive defence of reaching that target and silly arguments, such as, if we used US dollar exchange rates of some years ago, Malaysia would qualify as \u2018high income\u2019.\u201d<\/p>\n
<\/span>Kuala Lumpur, the high-income capital <\/strong><\/span><\/h2>\n\u201cYou want to be a developed country. That\u2019s my beef with high-income. It is never about reaching, say, US$15,000 per capita,\u201d said Muhammed Abdul Khalid, founder and chief economist at DM Analytics.<\/p>\n
\u00a0<\/strong>He tells iMoney that being high-income does not mean people\u2019s income would go up.<\/p>\n\u201cIf you want to know how high-income feels like, look at Kuala Lumpur. It achieved \u2018high-income\u2019 status roughly about ten years ago, yet there are people among us who can\u2019t afford to meet the living standards or achieve that level of wages.\u201d<\/p>\n
The overall index for Consumer Price Index rose<\/a> at 3.9% on a year-on-year basis in May 2017 compared with a 4.4% increase in April 2017.<\/p>\n![](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2017\/07\/ps-kl-800x261.jpg\")
Kuala Lumpur is a microcosm of a high-income economy.<\/p><\/div>\n
According to the Department of Statistics Malaysia (DOSM), six states recorded higher increases under the Food & Non-Alcoholic Beverages index, above the national level index for May, compared to the corresponding month in 2016. Kuala Lumpur saw a 4.9% rise.<\/p>\n
\u201cBeing high-income doesn\u2019t mean people\u2019s income goes up. We are now upper middle income but we have only one state, Kuala Lumpur, where half of the median income is above RM3,000. Even Penang and Selangor, it\u2019s below RM3,000.<\/p>\n
\u201cJust in KL, according to DOSM data, half of the workers earn RM2,400 a month, contra that with the high-income standard.\u201d<\/p>\n
But wouldn\u2019t a high-income bracket be positive for the country\u2019s gross domestic product (GDP)?<\/p>\n
\u201cOf course. GDP goes up, but you can also not be bothered about how it goes up. Being stuck in a traffic jam raise GDP, but is it sustainable? One person can control everything and GDP goes up. What you want is to be a developed nation, where inclusive development is the key, especially among the B40 group.<\/p>\n
\u201cInclusive here doesn\u2019t mean addressing the rich-poor gap, but everyone participates in policymaking,\u201d said Muhammed.<\/p>\n
He adds that being a high-income economy doesn\u2019t capture that inclusiveness that the share of highly skilled workers had been decreasing.<\/p>\n
\u201cWhat you want is a high-income society where the country is developed, leaving no one behind.\u201d<\/p>\n
<\/span>Enter, the useless class<\/strong><\/span><\/h2>\nThe idea of the useless class was mooted by Historian Yuval Noah Harari where he envisioned a world heavily relying on artificial intelligence, and so creating an \u201cunworking\u201d class.<\/p>\n
Economists are predicting that by 2050, virtually all industries from banking to manufacturing will integrate digitised automation and robotics<\/a>. On the chopping block are mid-skilled workers.<\/p>\n\u201cUnless we take corrective actions, this might just happen,\u201d said Muhammed. What\u2019s more concerning is the country\u2019s aging population.<\/p>\n
The United Nations projects that by 2030, Malaysia will be an aged country<\/a>, with 14% of the population or 5.2 million people aged 60 above.<\/p>\n\u201cThe government and private sector will have to think together on this. If we do not deal with this problem, it will drag the country. Productivity will be lower and there will be higher demand for public resources,\u201d said Lee Heng Guie, executive director of the Socio-Economic Research Centre (SREC).<\/p>\n
Early this year, the Employees Provident Fund (EPF) revealed that only 40% of Malaysians are financially ready for retirement<\/a>. But it added that more than 75% found it difficult to save RM1,000 for emergency needs, citing economic uncertainties and high cost of living.<\/p>\n\u201cA lot of people think that EPF alone is enough to retire, and we are not just talking about a minimal retirement lifestyle. We have not factored indicators such as cost of living and inflation,\u201d said Heng Guie, adding that financial literacy is key.<\/p>\n
<\/span>The adjustment game<\/strong><\/span><\/h2>\nAs noted, Malaysia is on its way to being inducted into the high-income club. Whether we like it or not, many of us will have to adapt and adjust.<\/p>\n
The best place to start is consider paying down debt. Economists are already warning that household debt may increase<\/a> and there is already a steady rise in bankruptcy cases<\/a> nationwide. The main causes are car, housing and personal loans.<\/p>\nIt has to be reinstated that a credit facility is only an asset provided you can pay it off promptly. Struggling to make payment will not do and this ultimately calls for a lifestyle adjustment, whether we like it or not.<\/p>\n
![](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2017\/07\/ai-main-800x361.jpg\")
Artificial intelligence will render many useless. Will you be among that group when Malaysia turns high-income?<\/p><\/div>\n
Millennials in particular should take heed. The iMoney survey found that the country\u2019s young were having\u00a0a tough time surviving financially<\/a>, with many being knee-deep in debt and on the brink of bankruptcy.<\/p>\n
He said this was commendable as the NTP had been instrumental in propelling the country out of the middle-income trap in 2009.<\/p>\n
But as the clock ticks, will Malaysia reach its high-income ambitions?<\/p>\n
Lee Hwok-Aun, senior fellow at the Institute of Southeast Asian Studies (Iseas), believes so, \u201cas long as our GNI per capita grows faster than the GNI per capita of high-income countries.\u201d<\/p>\n
\u201cThis combination will surely persist, so Malaysia is on track,\u201d he tells iMoney in an email interview.<\/p>\n
Hwok-Aun added that Malaysians should stop fussing over whether it will happen in 2020 or even before or later.<\/p>\n
\u201cPassing the high-income line gains prestige and symbolic success, but does not lift living standards or socioeconomic development into a higher realm.<\/p>\n
\u201cSo let’s not get too triumphant about it, which breeds an obsessive defence of reaching that target and silly arguments, such as, if we used US dollar exchange rates of some years ago, Malaysia would qualify as \u2018high income\u2019.\u201d<\/p>\n
<\/span>Kuala Lumpur, the high-income capital <\/strong><\/span><\/h2>\n\u201cYou want to be a developed country. That\u2019s my beef with high-income. It is never about reaching, say, US$15,000 per capita,\u201d said Muhammed Abdul Khalid, founder and chief economist at DM Analytics.<\/p>\n
\u00a0<\/strong>He tells iMoney that being high-income does not mean people\u2019s income would go up.<\/p>\n\u201cIf you want to know how high-income feels like, look at Kuala Lumpur. It achieved \u2018high-income\u2019 status roughly about ten years ago, yet there are people among us who can\u2019t afford to meet the living standards or achieve that level of wages.\u201d<\/p>\n
The overall index for Consumer Price Index rose<\/a> at 3.9% on a year-on-year basis in May 2017 compared with a 4.4% increase in April 2017.<\/p>\nKuala Lumpur is a microcosm of a high-income economy.<\/p><\/div>\n
According to the Department of Statistics Malaysia (DOSM), six states recorded higher increases under the Food & Non-Alcoholic Beverages index, above the national level index for May, compared to the corresponding month in 2016. Kuala Lumpur saw a 4.9% rise.<\/p>\n
\u201cBeing high-income doesn\u2019t mean people\u2019s income goes up. We are now upper middle income but we have only one state, Kuala Lumpur, where half of the median income is above RM3,000. Even Penang and Selangor, it\u2019s below RM3,000.<\/p>\n
\u201cJust in KL, according to DOSM data, half of the workers earn RM2,400 a month, contra that with the high-income standard.\u201d<\/p>\n
But wouldn\u2019t a high-income bracket be positive for the country\u2019s gross domestic product (GDP)?<\/p>\n
\u201cOf course. GDP goes up, but you can also not be bothered about how it goes up. Being stuck in a traffic jam raise GDP, but is it sustainable? One person can control everything and GDP goes up. What you want is to be a developed nation, where inclusive development is the key, especially among the B40 group.<\/p>\n
\u201cInclusive here doesn\u2019t mean addressing the rich-poor gap, but everyone participates in policymaking,\u201d said Muhammed.<\/p>\n
He adds that being a high-income economy doesn\u2019t capture that inclusiveness that the share of highly skilled workers had been decreasing.<\/p>\n
\u201cWhat you want is a high-income society where the country is developed, leaving no one behind.\u201d<\/p>\n
<\/span>Enter, the useless class<\/strong><\/span><\/h2>\nThe idea of the useless class was mooted by Historian Yuval Noah Harari where he envisioned a world heavily relying on artificial intelligence, and so creating an \u201cunworking\u201d class.<\/p>\n
Economists are predicting that by 2050, virtually all industries from banking to manufacturing will integrate digitised automation and robotics<\/a>. On the chopping block are mid-skilled workers.<\/p>\n\u201cUnless we take corrective actions, this might just happen,\u201d said Muhammed. What\u2019s more concerning is the country\u2019s aging population.<\/p>\n
The United Nations projects that by 2030, Malaysia will be an aged country<\/a>, with 14% of the population or 5.2 million people aged 60 above.<\/p>\n\u201cThe government and private sector will have to think together on this. If we do not deal with this problem, it will drag the country. Productivity will be lower and there will be higher demand for public resources,\u201d said Lee Heng Guie, executive director of the Socio-Economic Research Centre (SREC).<\/p>\n
Early this year, the Employees Provident Fund (EPF) revealed that only 40% of Malaysians are financially ready for retirement<\/a>. But it added that more than 75% found it difficult to save RM1,000 for emergency needs, citing economic uncertainties and high cost of living.<\/p>\n\u201cA lot of people think that EPF alone is enough to retire, and we are not just talking about a minimal retirement lifestyle. We have not factored indicators such as cost of living and inflation,\u201d said Heng Guie, adding that financial literacy is key.<\/p>\n
<\/span>The adjustment game<\/strong><\/span><\/h2>\nAs noted, Malaysia is on its way to being inducted into the high-income club. Whether we like it or not, many of us will have to adapt and adjust.<\/p>\n
The best place to start is consider paying down debt. Economists are already warning that household debt may increase<\/a> and there is already a steady rise in bankruptcy cases<\/a> nationwide. The main causes are car, housing and personal loans.<\/p>\nIt has to be reinstated that a credit facility is only an asset provided you can pay it off promptly. Struggling to make payment will not do and this ultimately calls for a lifestyle adjustment, whether we like it or not.<\/p>\n
Artificial intelligence will render many useless. Will you be among that group when Malaysia turns high-income?<\/p><\/div>\n
Millennials in particular should take heed. The iMoney survey found that the country\u2019s young were having\u00a0a tough time surviving financially<\/a>, with many being knee-deep in debt and on the brink of bankruptcy.<\/p>\n
\u201cIf you want to know how high-income feels like, look at Kuala Lumpur. It achieved \u2018high-income\u2019 status roughly about ten years ago, yet there are people among us who can\u2019t afford to meet the living standards or achieve that level of wages.\u201d<\/p>\n
The overall index for Consumer Price Index rose<\/a> at 3.9% on a year-on-year basis in May 2017 compared with a 4.4% increase in April 2017.<\/p>\n Kuala Lumpur is a microcosm of a high-income economy.<\/p><\/div>\n According to the Department of Statistics Malaysia (DOSM), six states recorded higher increases under the Food & Non-Alcoholic Beverages index, above the national level index for May, compared to the corresponding month in 2016. Kuala Lumpur saw a 4.9% rise.<\/p>\n \u201cBeing high-income doesn\u2019t mean people\u2019s income goes up. We are now upper middle income but we have only one state, Kuala Lumpur, where half of the median income is above RM3,000. Even Penang and Selangor, it\u2019s below RM3,000.<\/p>\n \u201cJust in KL, according to DOSM data, half of the workers earn RM2,400 a month, contra that with the high-income standard.\u201d<\/p>\n But wouldn\u2019t a high-income bracket be positive for the country\u2019s gross domestic product (GDP)?<\/p>\n \u201cOf course. GDP goes up, but you can also not be bothered about how it goes up. Being stuck in a traffic jam raise GDP, but is it sustainable? One person can control everything and GDP goes up. What you want is to be a developed nation, where inclusive development is the key, especially among the B40 group.<\/p>\n \u201cInclusive here doesn\u2019t mean addressing the rich-poor gap, but everyone participates in policymaking,\u201d said Muhammed.<\/p>\n He adds that being a high-income economy doesn\u2019t capture that inclusiveness that the share of highly skilled workers had been decreasing.<\/p>\n \u201cWhat you want is a high-income society where the country is developed, leaving no one behind.\u201d<\/p>\n The idea of the useless class was mooted by Historian Yuval Noah Harari where he envisioned a world heavily relying on artificial intelligence, and so creating an \u201cunworking\u201d class.<\/p>\n Economists are predicting that by 2050, virtually all industries from banking to manufacturing will integrate digitised automation and robotics<\/a>. On the chopping block are mid-skilled workers.<\/p>\n \u201cUnless we take corrective actions, this might just happen,\u201d said Muhammed. What\u2019s more concerning is the country\u2019s aging population.<\/p>\n The United Nations projects that by 2030, Malaysia will be an aged country<\/a>, with 14% of the population or 5.2 million people aged 60 above.<\/p>\n \u201cThe government and private sector will have to think together on this. If we do not deal with this problem, it will drag the country. Productivity will be lower and there will be higher demand for public resources,\u201d said Lee Heng Guie, executive director of the Socio-Economic Research Centre (SREC).<\/p>\n Early this year, the Employees Provident Fund (EPF) revealed that only 40% of Malaysians are financially ready for retirement<\/a>. But it added that more than 75% found it difficult to save RM1,000 for emergency needs, citing economic uncertainties and high cost of living.<\/p>\n \u201cA lot of people think that EPF alone is enough to retire, and we are not just talking about a minimal retirement lifestyle. We have not factored indicators such as cost of living and inflation,\u201d said Heng Guie, adding that financial literacy is key.<\/p>\n As noted, Malaysia is on its way to being inducted into the high-income club. Whether we like it or not, many of us will have to adapt and adjust.<\/p>\n The best place to start is consider paying down debt. Economists are already warning that household debt may increase<\/a> and there is already a steady rise in bankruptcy cases<\/a> nationwide. The main causes are car, housing and personal loans.<\/p>\n It has to be reinstated that a credit facility is only an asset provided you can pay it off promptly. Struggling to make payment will not do and this ultimately calls for a lifestyle adjustment, whether we like it or not.<\/p>\n Artificial intelligence will render many useless. Will you be among that group when Malaysia turns high-income?<\/p><\/div>\n Millennials in particular should take heed. The iMoney survey found that the country\u2019s young were having\u00a0a tough time surviving financially<\/a>, with many being knee-deep in debt and on the brink of bankruptcy.<\/p>\n<\/span>Enter, the useless class<\/strong><\/span><\/h2>\n
<\/span>The adjustment game<\/strong><\/span><\/h2>\n