Sad state of Malaysian's economy

The following chart shows the Monthly Income per household as of 1Q 2008. Isn't it sad to see most Malaysians are actually living close to poverty. As for my family, we are in the top 5% category fortunately. But not so fortunate, in terms of how easily we are in that bracket simply because of the sad state of the overall income of Malaysians.

Apparently, for 1Q 2008, there are only 1.14 million tax payers. In other words, only 1.14 million individuals who has a monthly income of more than RM2500. That is only 10.8% of the total workforce which pays taxes. Isn't that baffling or what?

What this has proven, is clearly that our economy has not been able to move up the value chain and has still remain largely on the manufacturing side. Failure to raise and develop better human capital is one of reason why. Brain drain is also seriously affecting the economy. Wages are extremely low and can't keep up even with neighbouring countries. How are we supposed to attract and retain our own knowledge workers? This becomes a self excaberating situation where the economy does not move up the value chain due to lack of human capital, and our top knowledge workers cannot work in the country because of lack of jobs.

Stagflation

Zeti's report on CPI inflation at 3.81% are bollocks. First of all, you have a direct 40% hike on petrol and 60% on diesel. The food prices in hawkers and food court nearby the area where I work at has gone up by 12% to 16%. In July, we will see 20% increase in electricity charges. Credit card companies will impose interest charges on future purchases should you not clear your outstanding balances every month. How many people on the street can't do that? Apparently the figure is 1.8 million. That is nearly one fifth of our working population. We see news about price increases everyday in newspaper. Tiles, steel, stationeries, rice, pork, and many more to make the list. And another startling news which is if poverty level is at RM 1500 and in my opinion this is a fair figure, it affects a quarter of the households. In most corporations, the annual increments is less than 10%. Which means, wage earners are getting poorer by the day.

I've noticed a drastic drop in the traffic on the road. I myself think twice now whenever the need to travel occurs, especially for leisure purposes. Silly trips like going to Klang just for seafood dinner is automatically crossed out.

The stock market is in shambles. I have, currently on paper loss close to RM 8000. FD rates at 3+% eventhough losing out hugely due to inflation looks so much better now. An impending BLR hike will surely accelerate this doldrum. This is the new reality. Stagflation is here to stay.