SMALL business owners and the working class are not reaping the benefits of Malaysia’s growth because a “two-speed economy” existed under Prime Minister Najib Razak’s administration, an opposition-funded forum was told. 

Malaysia’s economy recorded a higher-than-expected growth of 5.8% last year, thanks to improving domestic demand and labour market.

However, the effects of such a growth has not trickled down to the lower-income groups and, small- and medium-sized enterprises, claimed Perak DAP assemblyman Howard Lee.

“We have a two-speed economy where the rich, the super rich and those who have property and financial assets are making so much more money because that’s what the economy is shaped to do: To make the rich richer,” Lee told a forum on Pakatan Harapan’s plan to create one million jobs for youth should they win Putrajaya.

“But we have to ask, what about the people who are (struggling) making ends meet?” said the Pasir Pinji state representative. 

Present were Amanah deputy youth chief Faiz Fadzil, Bersatu youth wing information chief Ulya Aqamah Husamudin and PKR youth vice-chief Sangetha Jayakumar.

At the end of last year, Industrial Production Index (IPI) showed better-than-expected fourth quarter manufacturing data, rising by 5%. 

An expansionary Budget 2018, stronger crude oil prices and a comparatively weak US dollar has prompted analysts to predict a hike in interest rate by Bank Negara in the first quarter. 

A bullish ringgit – which is currently trading just above RM3.95 to the US dollar – is moving in tandem with a strong equity market, with the benchmark FTSE Bursa Malaysia KLCI breaching the 1,800 level earlier this month. 

Lee, who is Perak DAP youth chief, claimed, however, that despite the upbeat macro narrative, the feedback on the ground received by Pakatan Haparan leaders is not as rosy. 

“The issue with the figures by Najib and the ruling government is that although it’s not a lie, it’s just not felt on the ground,” Lee said. 

“You can see it when you talk to the people running shops and businesses in residential places. Do they feel what is said by Najib that there is a good economy? If we go on the ground, most will say no,” Lee said. 

Lee claimed SMEs still experienced little demand: “SMEs are telling you that people are not spending like they used to. People are not buying from them because of the GST (goods and services tax) and lots of different factors that are not enabling consumers to consume.” 

“When SMEs suffer, they will not buy from manufacturers and larger businesses and you get into a negative downward spiral. So, essentially when consumers don’t have any money to spend, manufacturers will eventually be affected,” Lee said. 

Lee said PH offered to raise minimum wage to help alleviate the demand problem: “The solution to this condition is that we need to put money back into the hands of the consumers.”

“We need to put money back into the hands of the consumers. That’s one way to support demand,” he said. 

Lee said with 15% of Malaysians projected to reach 65 by 2020, PH has plans also create more jobs in the elderly care sector, but did not elaborate. 

Meanwhile, Ulya said PH would introduce minimum wage for foreign workers to reduce businesses’ dependency on them. PH may also charge a levy on employers of foreigners, he said. 

“We will actually defend the rights of the foreign workers, where they get the same salary as Malaysian citizens. The problem is that employers today think why should I pay RM1,500 for a domestic worker when I can pay just RM500 for a foreign one.”

“Right now it’s a very bad situation, where even the working conditions of foreign workers are not good,” he said, adding that PH may target a reduction to four million foreign workers in the country within five years, should it form a government. – January 17, 2018.