Source: Free Malaysia Today
This is a sign of a crisis-plagued economy in need of a quick solution.
KUALA LUMPUR: A Pakatan Rakyat leader today urged the government to set up a commission to help the average Malaysians solve their debt problems amid soaring cost of living.
The Malaysian middle and lower class are “living on borrowing”, a sign of a crisis-plagued economy, said DAP economist Charles Santiago today.
He said a quick solution – increasing real income – was needed.
“At present, the nation is faced with an indebted middle and working class that is unable to support families with their present wages and remuneration,” he told reporters at Parliament lobby.
Wage trends in Malaysia indicated a mere 2.6% growth annually for the past 10 years compared to the increasing cost of living during the same period, according to last year’s World Bank report.
The same report showed that about 34% of all Malaysian workers earned less than RM700 a month which is below the RM720 poverty line.
The National Economic Advisory Council recently indicated that the bottom 40% of households have experienced the slowest growth of average income, earning less than RM1,500 per month in 2008.
Household debts on the other hand have spiralled out of control for the same 10-year period, said Santiago who is also the MP for Klang.
Much of the debts are for basic necessities like cars, house mortgages and credit card repayments.
“These debt figures will be much higher if we include borrowing from middlemen and Ah Longs,” added Santiago.
He added that Malaysians now have to tighten their belt in light of the government’s move to cut subsidies on basic goods.
“Thus it is urgent that the government establish a high level commission to study and recommend policies in order to stop the deterioration in the quality of live and standard of living of the squeezed middle and working class,” said Santiago.
Charles Santiago 
1 April, 2011 at 7:07 pm
Dear Sir,
The land of abundance has been turned into the land of ‘in-power you have abundance’. Majority of the Malaysians are poor lots, the dominance being the Malays and followed closely by the indians and the well-off, majority being the chinese. The NEP is a complete failure. In the first place we should have an NEP to eradicate poverty of all Malaysians and not only the Malays. The corridors of power has manipulated the NEP to benefit the few and marginalised the majority of the Malays, and yet the Malays did not realise this facts. The malays have been ‘chased’ out of the tol-lands and malay reserve lands and sardin-packed in cheap flats. Their lives change forever, the social ills, the quality of lives, the freedom of mobility were all curtailed, yet the majority of the malays did not realise what they have loss. Their housing purchasing power have been long eroded, due to the banking laws and procedures, AND THE REMOVAL OF SUCH hindrance recently may not help much either since majority of the malays have no purchasing power to buy houses from rm250K and above. The Indian does not enjoy the FELDA scheme, even though their fore-fathers were indulge in this art of work from the colonial days. Their youngsters start urban migration and with little opportunity in business and government jobs has resulted in unwarranted social problems. The chinese are known to indulge in business from the very tender age, as a result from their earlier generations having firm footing in this sectors, couple with their means, superb logistic and contacts, they flourish further. Even though there are chinese thAT ARE poor, but not as poor and desperate as the malays and the indians. The Ketuanan Melayu are in control of the administration, and majority are corrupt and known to be easily bought over by these group of businessmen. These types of practices have gone unchecked in the many core departments. A few days ago a crackdown on corrupt government servants were unvailed, but their ‘business’ have been going on from day one. In the early days, corrupt rewards were taken from the chinese taukeh only, and the Ketuanan Melayu spared the Malays. However, as the economy worsen, with no pay rise, domestic bill soars, the demand for materials sky roketted; the Ketuanan Melayu is not ashamed and openly accepted or even ask for ‘rewards’ on their routine job services from the Malays too. In the past only the Male Ketuanan Melayu were known to accept bribes, but now even the ketuanan melayu women officers were reportedly involved in graft practices. We are almost there, and very soon will be at par with Indonesia, Philippines and Thailand, where asking for cash in the open by the Administrator is a norm. A new NEP must be established for all Malaysians, not only for one particular race. The time has come where every Malaysian must realise, a change is needed, before our country become another “zimbakwee”, where the gaps between the have and the have nots is too big to handle.
1 April, 2011 at 10:22 pm
Based on current cost of urban living, socio-economic categorisation based on income should be as follows, and not the 720RM thresh-hold:
Total Income p.m. for family of 5:
Below RM 1999 -Abject poverty
RM 2000- 3499- Poor
RM 3500- 6499- Lower middle class
RM 6500- 9499- Middle middle class
RM 9500-18499- Upper middle class
These should be indexed yearly against official inflation.
(Note that in public policy debates in Australia, the reference point for low income is somewhere AU 50K p.annum, which would be in the upper middle class band proposed above.)
Figure out the rate of poverty, absolute or
subjectively felt. Would one expect sustained social stabilty and control of poverty related crimes, when millions are struggling with minimal living costs?
Kuching.