Malaysian policy-making needs to be rooted in reality - Khazanah Research

Malaysian policy-making tends to suppress the difference in realities of income levels among households across the country with a contextless approach and by copying international standards considered “best practices” of high-income positions.

Khazanah Research Institute (KRI) director Dr Suraya Ismail said if policy-makers do not root the policy based on the context of the different realities people were experiencing, then the target would definitely be missed.

“For example, for the price of affordable housing, if just one number is cited, it would not be right for different states with different income levels. If we put RM180,000 as the affordable price in Selangor, it cannot be the case for those in Kelantan.

“This somehow does not resonate in policy-making in thinking everybody is facing the same reality,” she told a dialogue session in conjunction with the launch of the "State of Households 2018: Different Realities Report" in Kuala Lumpur today.

In its latest report, KRI said since independence, Malaysia had advanced on a clear path of progress.

However, it said, economic realities across Malaysian households are much more disparate, with difficult challenges remaining, such as persistent low incomes, an increasing gap between the rich and poor, geographic inequality and undervalued care work.

The report also stated that there was significant geographical diversity in household income across Malaysia.

“Nationally, the middle 40 percent (M40) household refers to those with a monthly income of between RM4,360 and RM9,619. However, if we consider the income distribution at state level, the equivalent state-level thresholds vary significantly.

“A top 20 percent (T20) household in Kelantan, Perlis or Pahang may have an equivalent of a bottom 40 percent (B40) household in Kuala Lumpur.

“These are the things that really need to be ironed out, to come up with proper targeted policies that need to understand the realities faced at state level and even at the federal level; no policies fit all,” Suraya said.

She also said the thinking is that international benchmarks were great.

“But, to address any problem of a specific target group, we need to cut the coat according to the cloth,” she added.

She suggested that in policy-making, the target set must be accompanied with a proposed solution which is actionable by the respective agencies, arguing on the saying of a “wonderful policy but bad execution”.

“No policy is good if it does not take into account the limits of institutional strength," Suraya said.

- Bernama