PETALING JAYA: Malaysia will drop its long time dream to hit US$15,000 (RM62,300) per capita income by 2020 to meet its high income nation aspirations, as it now looks to ensure high income levels commensurate with higher purchasing power.
The mid-term review of the 11th Malaysia Plan presented a two-prong approach to address the disparity of household income levels in the country, first by intensifying measures to uplift lower middle income households from the Bottom 40 (B40) group and increasing purchasing power for all; and secondly with comprehensive regional development strategies to focus on narrowing the economic gap for less developed regions, in particular six states.These states are Sabah, Sarawak, Kelantan, Terengganu, Kedah and Perlis.
According to the document, the government seeks to improve overall income inequality by uplifting the B40 to a middle class society, address the needs of specific target groups, enhance bumiputra economic community opportunities to increase wealth ownership and increase the purchasing power for all.
Increasing purchasing power for all will be executed by addressing market distortion with promotion of greater competition, provide more avenues offering affordable and competitive prices of goods and services, enhancing enforcement of price control regulations, and advocating consumerism.
Under its plan for the bumiputra economic community, the government wants to ensure at least 60% participation of bumiputras in skilled occupation category, at least 75% of bumiputra has a residential unit and at least 11% annual growth of bumiputra corporate equity ownership.
The mid-term review found that the economic disparity between states, despite the increasing trend of gross domestic product (GDP) per capita in the states, was a result of the different economic activities in the state.
Therefore besides enhancing the role of state economic development corporations, the government is encouraging investments for high impact programmes and projects in identified niche cluster activities in the states.
Regions will be encouraged to modernise and diversify the economic base to boost high value added activities and spur higher growth in particular regions which are highly dependent on agriculture.
The states of Kelantan, Kedah, Perlis and Sabah, which were dominated by traditional sectors, recorded substantial gap in GDP per capita as compared to the national average of RM42,228 in 2017. Kelantan recorded the lowest GDP per capita, with a gap of 67.8% below the national average.
Disparity of GDP per capita between Kelantan and Kuala Lumpur, the state with the highest GDP per capita, widened by 8.2 times in 2017 as compared to 7.9 times in 2015.
Income disparity between the regions remain a concern despite the continuous increase in the national median monthly household income at RM5,228 in 2016. The central and southern regions continued to record notable achievement of RM6,616 and RM5,652 respectively. The Eastern region recorded the smallest median monthly household income at RM3,917, where Kelantan registered the lowest among states at RM3,079. Kedah in the Northern region was the second lowest, at RM3,811.