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Thursday, March 21, 2013

PM's GNI growth not reflective of regular Malaysians



Prime Minister Najib Abdul Razak's claim that the gross national income (GNI) per capita has increased by 49 percent between 2009 and 2012 is not reflective of the situation of the regular Malaysian, analysts say.

NONENajib, when delivering his annual Economic Transformation Programme (ETP) report card on Tuesday, said the GNI per capita has seen a significant increase between US$6,670 and US$9,970 in those three years - based on the last data made available by the World Bank.

However, analysts pointed out the mode of calculating the GNI  does not take into account inflation and rising prices for basic goods, accommodation or transportation.

Institute for Democracy and Economic Affairs (Ideas) CEO Wan Saiful Wan Jan (left) said the GNI calculation merely averages the total national income with the amount of local workforce Malaysia has.

"It might be that the effects are only reaching the wealthy, but not filtering down the chain to normal Malaysians," Wan Saiful suggested.
"I can't say for sure if the people are feeling the effects, but among my circle of friends, with the exception of those working in big multinational companies, they are not enjoying that much of a pay rise," he said.
2009 was a year of recession

Wan Saiful argued that trying to compare GNI per capita to the year 2009 would not be reflective of an actual increase because 2009 was a recession year.

"This increase uses 2009 as the benchmark. But 2009 is a year of recession. So any comparison with the year 2009 is bound to look good," he added.

malaysiakini discussion 050208 khoo kay pengWan Saiful's thoughts were echoed by strategy consultant and political analyst Khoo Kay Peng, who said he was sure the 40 percent in the lower income group have only enjoyed an average pay rise of five percent over the past four years.
    
"If a person earned RM1,000 a month, the pay might only increased RM1,200 a month four years later," Khoo said.

"For someone who earns RM8 million or RM9 million a year, the five per cent quantum would be huge," he said, adding that the larger quantum was probably being enjoyed by the higher income groups and was not filtering down.

Khoo said that using economic data such GNI or gross domestic product (GDP) to measure the actual income increase according to different categories of wage earners would be "problematic".

"The GNI does not take into account inflation. It also does not take into account the rising prices of goods, transportation, or accommodation costs. These are all basic needs," he said.

The GNI per capita numbers have been disputed before by the opposition, with DAP election strategist Ong Kian Ming and DAP national adviser Lim Kit Siang both raising doubts over the government's figures.

According to Lim, Malaysia's GNI per capita only increased by 16.5 percent between 2009 and 2011, while Ong said going by the Bank Negara Malaysia (BNM) statistics, the GNI per capita had only increased by 34 per cent, and not by 49 per cent as claimed by Najib.

A country's total GNI is calculated by adding the GDP amount with the net income from abroad.
Later today, the government's Performance Management and Delivery Unit (Pemandu) told KiniBiz that it had revised the GNI per capita in US dollars between 2009 and 2012 to 41 percent.
The figure first released for the period was 49 percent and Pemandu cited the adoption of "a new accounting method" for the change in  percentage.

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