Economic, Labour Market Structure Determines Developed Status

By Niam Seet Wei KUALA LUMPUR, Nov 8 (Bernama) -- Among the crucial factors for Malaysia to achieve the status of a developed country instead of merely a high-income nation by 2020, involve the structure of the economy and labour market, said an economist. "What's important is the structure of the economy and labour market, whether we are high-skilled labour, high productivity, or high wage country," said former Senior Lecturer, Department of Development Studies, Universiti Malaya, Dr Lee Hwok Aun. He pointed out that a high-income nation referred to the gross national income per capita which was unnecessarily related to high wages. And currently, the minimum hourly wage in the country stands at below US$1.18 (RM5) per hour, which is still very low, he told Bernama on the sidelines of the Malaysian Capitalism Conference here, Tuesday. "We need to shift our focus on promoting high hourly wages and high hourly productivity in order to achieve the status of a developed country," he said. However, Lee pointed out that the Household Income Survey conducted by the government between 2012 and 2014, had shown that the Bottom 40 (B40) group's income increased by 17.2 per cent year-on-year compared with 11.3 per cent for the Middle 40 group and 8.5 per cent for the Top 20 group. "The growth could be driven by the rise in income contribution to a household due to more children in a family, and the introduction of the 1Malaysia People's Aid (BR1M) in 2012," he said. However, he stressed that wage inequality was still high in the country as Malaysia still lacked comparable data across the nation. Meanwhile, Institute of Strategic and International Studies' Prof Jomo Kwame Sundaram, who is also a visiting senior fellow at the Khazanah Research Institute (KRI), attributed the higher level of education as one of the reasons that increased the income of the B40 group. "The rise in commodity prices coupled with implementation of minimum wage in early 2013, were also factors that contributed to the increase in income growth for B40 in 2012-2014 period," he added. Themed "Malaysian Capitalism in Comparative Perspective", the two-day conference beginning Monday was co-organised by KRI, the Embassy of France and Malaysia-France Unversity Centre, with the support of France's Institut Francais. It aims to foster dialogue and enhance understanding among scholars, researchers and commentators from both countries. -- BERNAMA