Sunday, July 13, 2008

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.