NORTHEASTERN state Kelantan continues to lag behind its counterparts in terms of per capita income, according to government statistics.

Despite having almost doubled its gross domestic product (GDP) during the period between 2005 and 2015, Kelantan’s GDP per capita is just one-third of the national average.

According to the Department of Statistics Malaysia data, the GDP per capita in Kelantan was RM12,075 in 2015 while the national per capita income was RM37,104.

And when compared with those from the Federal Territory (Kuala Lumpur), it is almost 8 times less.

Kelantan, which is governed by PAS, has a population of 1.8 million (2016 census).

Also lagging behind were Barisan Nasional-governed states Kedah (RM18,249) and Sabah (RM19,734), which are the sixth and second highest in terms of population. Kedah has a population of 2.1 million while Sabah has 3.8 million residents.

According to IDEAS research director Ali Salman, the income differential across states should not be a cause of concern from a socioeconomic equity perspective.

“Different states have varying level of endowment, human development and business expertise and linkages and convergence of incomes may simply be impossible, or even undesirable.

“However, the difference between the top state and bottom-most state is huge, as the highest income state has RM90,000 per capita income, and the lowest state has less than RM20,000.

“This shows that the development levels across the states are far from uniform, further dampening the chances of catching up,” the economist and public policy expert told The Malaysian Insight.

Ahead of the pack are those from Kuala Lumpur, who have a per capita income of RM94,722, Labuan (RM58,577) and Penang (RM44,847).

Among the three, Labuan has the smallest population size of 95,000 residents compared with Kuala Lumpur’s 1.87 million and Penang’s 1.7 million.

In terms of per capita income, Selangor was a close fourth with RM42,611 with the highest population size of 6.3 million.

Another trend revealed in the 10-year statistics is that Kuala Lumpur enjoyed the highest GDP per capita growth rate. In the 10 years, its growth rate was 123% followed by Labuan (120%) and Kelantan (98%). The national average was 77.8%.

The lowest growth among were Penang (67.1%), Terengganu (67.2%) and Perlis (67.6%).

The differences between the states were reflected by their dominance in the contributing sectors of the economy – services, manufacturing, mining and quarrying, construction and agriculture.

In the services sector, Selangor and Kuala Lumpur had a combined share of 49.9% of the national pie. In manufacturing, Selangor held the biggest share with 28.9% with Penang and Johor trailing at 12.8% and 12.4% respectively.

Sabah, Sarawak, Johor, Pahang and Perak took the lion’s share of the agriculture sector with a combined contribution of 71.6%, mainly because of oil palm and rubber.

In construction, Kuala Lumpur and Selangor still led the way, accounting for 56.2% of commercial properties and other civil engineering activity.

Ali said: “There is no magic wand to help convergence of this income gap but the experience shows that the economic transformation of a country or a state is not very different.

“Malaysian states with more dependency on agriculture and natural resources are low-income states. The states with high proportionate of services in their GDP tend to outperform other states.”

According to Bank Negara, Malaysia’s GDP in 2015 was RM1.16 trillion. – April 17, 2017.