By Raveen Jeyakumar
Malaysia’s existing economic system prioritises the wants and greed of the elite class more than the needs and wellbeing of the average person.
This elite class comprises tycoons, rich business owners, developers, certain politicians and big foreign investors. Most of the country’s generated wealth goes to this small elite class, and only a small slice is distributed to the rest of the people.
Such an economic system is not sustainable in the long term because eventually, many people will face an overwhelming socioeconomic burden and hardship that they may decide to turn against the government.
For the long-term stability of any ruling administration and the wellbeing of the ordinary people, especially their socioeconomic condition, the government needs to prioritise and protect the poorest 40% of the people.
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For this, the government needs enough financial resources to improve the quality of people’s lives.
The government can take the following measures to achieve this:
One, agree with other Asean nations to collectively and gradually raise taxes for foreign investors and raise the minimum wage in all Asean countries. These collective actions will prevent the withdrawal of foreign investors and their assets out of Malaysia into neighbouring countries because all the Asean nations will be implementing similar measures. Acting as a bloc strengthens the bargaining power of each country rather than adopting a policy of ‘beggar thy neighbour’.
Two, agree with other Asean countries to collectively and gradually raise taxes on the elite class. Amend and enforce laws that block anyone (especially the elite class) from tax avoidance in these countries. Such collective action will serve as a disincentive for the elite class to exit Malaysia and move to neighbouring countries to avoid paying their taxes – because all the Asean countries will implement the same action.
Three, strictly ensure that every single person in the elite class pays their taxes based on their generated income instead of hiding their taxable wealth or income in tax havens.
Four, use the debt monetisation strategy so that government securities are sold to the central bank at a very low interest rate. Essentially, the government borrows from the central bank. This strategy would give the government the funds it needs without saddling itself with an enormous debt servicing burden.
Through these measures, the government will be able to raise funds to improve the socioeconomic status of the people, especially the poorest 40% of households.
To improve the people’s socioeconomic status, the government could take the following measures:
- Subsidise the costs of oil, gas and raw materials
- Build low-cost houses for the poorest 40% and the lower-middle income group
- Amend national laws to control the costs of essential services and goods, including education, medical treatment, housing, public transport. Make them more affordable
- Increase the minimum wage to a fairer level
- Provide more job opportunities with an emphasis on hiring local workers to reduce unemployment, especially among the youth
- Implement an old age pension scheme for the elderly in Malaysia
Only when the country’s wealth is distributed fairly to the people – instead of being concentrated in the hands of a small elite class – will the country truly achieve long-lasting progress and prosperity.
Raveen Jeyakumar, an Aliran volunteer, is a 29-year-old based in Ipoh with an interest in social and environmental issues
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