Politics in Malaysia politics are at an inflection point, it is not just the ruling party, the Umno-led Barisan Nasional, that is in trouble, the opposition coalition is facing their own struggle as well.
With the rising cost of living and uncertainty in the value of the ringgit, the unstable political status of the proposition and opposition definitely play some role in making it worse. It is important for the nation to realise that political ideology does play an important role in influencing the economy.
Many economic policies and issues reflect the political beliefs of a nation. For example, people who belief in freedom would go for democracy and less government intervention in the business sector, this can be seen in countries like the US, Canada, mostly the western part of the world.
On the other hand, countries like China prefer to have major government intervention so that it has bigger control in the economic sector, and countries in the Europe or EU started with the focus on welfare, where the policies are designed to make sure that the people are well taken care of. Each economic agenda demands a political support to make sure that it is efficient and confidently implement.
In Malaysia, economic policies are driven supposedly by the political agenda with clear objectives that is to give the best for the public, as mentioned by any political party or political members of this country. Looking from a strategy perspective, a clear target market is important to make sure that the planning is easily executed but in the context of a country, the major portion of the population should be the priority, which in our case are the middle income earners.
Looking at what has been done, the increase in public transport fees, retailing price on food and clothes and concern on the Trans-Pacific Partnership Agreement (TPPA), have raised fears among the middle class group. Depending solely on one income is not enough for them to enjoy the economic lifestyle that they had before.
It is reported that it is harder for this income group to live within the means that they are having right now if they would choose to have the same lifestyle. Besides, only about 28 percent of Malaysian workers are considered skilled for higher value-added jobs, the figure do not indicates much option for additional job that can be taken to increase disposal income.
Hence, investment has become a new option for the middle class to increase their wealth. Value investment is one of the ways that this group is considering to boost their economic earnings. Despite that, this option demands great knowledge as it is beyond shares and stocks gambling. Thorough understanding of a target company is crucial in making sure that the amount invested will create at least a fair return in the future.
With the uncertainty in economy, it is important to invest in a great business model that could projects significant growth in the long run.
New wave of value investing
On the other hand, this new wave of value investing indicates a future for public listed companies to stay strong with the support of fund that slowly coming in from the middle class. It is important for companies to project and communicate its sustainability and growth supported with a confident business model in order to tackle people that are looking for value in investing option.
Besides value investment on stocks, property market has also become a crucial sector in for additional wealth among the middle class. Rapid increase in price in this sector has created interest for investment in the middle income group. However, competition from international buyers, especially Singaporeans, in buying properties in Malaysia has somehow lowered the enthusiasm among the local players to keep up with the rapid increase in price.
Given the struggle that the middle class have to go through it Malaysia, the government has to be reminded that the middle class is the most important group in this country. They have a great awareness and concern towards social and economic of not just theirs but also the lower income group because they themselves hail from economically challenging backgrounds.
The middle class have always played a pivotal role in the political, economic and social development of any society.
The majority of the brain drain came from this group of the society; it is important for the government to take care of the welfare of this group and lower income group people. Concentration of wealth will only create inequality which would result in more economic struggles in the future.
People are more educated now, thus transparency and consistency in executing a policies is so much needed to ensure stability of a political party. It is time for the Malaysian economy to rethink its policies and purposes. The middle class has to do more reading and be more aware about the political situation of the country as its hugely related to the economic development.
SHARIFAH ZAHRA is an independent writer specialising in strategy and international business. -Mkini
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