Feel that only the rich get richer in Malaysia? You may be right
(MMO) – Ever wondered why you feel that the income divide between the rich and poor in Malaysia is getting wider and wider, despite the official index showing less inequality and a fairer distribution of income?
Khazanah Research Institute’s (KRI) latest report shows that this disconnect between Malaysians’ perceived reality and the official numbers is understandable and not without basis.
KRI noted that Malaysia’s household income inequality measured using the Gini index has fallen from a high Gini coefficient of 0.513 in 1970 to 0.399 in 2016, which would suggest that income is being distributed more equally in the country.
But KRI said the public’s typical view is that inequality is still a problem that has not been solved in the past few decades.
“The general perception is that the rich are getting richer, while the poor are getting poorer,” it said in its report titled “The State of Households 2018: Different Realities.”
KRI explained that this could be due to how income inequality is measured, namely whether household income is compared in relative terms or actual gap.
It gave the example where a high-income household with an income of RM10,000 doubles its income to RM20,000 in a year, while a low-income household experiences a faster income growth where its RM1,000 income triples to RM3,000.
