Transparent plan vital to uplift Penang Malays
New Straits Times (Columns)
18 Sep 2006
ZAINAL AZNAM YUSOF

The income disparity between the Malays and other races in Penang remains substantial, but the extent of their marginalisation could not be determined without more information on their economic position, writes ZAINAL AZNAM YUSOF.

THE recent controversy over the so-called marginalisation of the Malays on Penang island encourages a sense of deja vu. We have been here before.

The economic position of the Malays in Penang is a reflection of a continuing national development problem, that is the concern of growth with equitable distribution.

With the political season of holding assemblies and meetings, the raising of sensitive issues is something that is expected and unavoidable. Parties to the controversy have lined up on different sides of the fence.

On the Malay side the contention is that after so many years of development in Penang, the Malays have been marginalised, implying that they continue to lag behind the non-Malays, and that more attention and serious efforts are required to lift their economic status.

It has been pointed out that there are Malay areas in Penang that have been insufficiently developed, wakaf land is still unexploited, the supply of affordable houses for Malays is inadequate, and much of the urban properties are beyond the means of the Malays.

On the other side of the fence, under the Gerakan-led coalition government, the response has been one of downplaying the seriousness of the allegation of insufficient attention and neglect of Malay economic advancement.

There is the contention that not all the faults should be placed on the state government and that the Penang Malays should shoulder part of the blame.

Now the directive has been given by the Prime Minister to the Deputy Finance Minister II to look into the plight of the Penang Malays. What can we learn so far from the track record of Penang? There is, unfortunately, insufficient information in the public domain, for us to be well-informed on the actual economic position of the Malays in Penang.

The parties to the quarrel have not provided the relevant details of the Malay economic position to enlighten and advance our understanding on the seriousness of Malay marginalisation and under-development in Penang.

Unless and until a fuller disclosure is made the patchy information and the indirect evidence available suggest that the Penang Malays, compared to the other states, do not occupy the worst position and that they do not form a Malay underclass.

According to the Ninth Malaysia Plan the Gross Domestic Product (GDP) growth for Penang (five per cent per annum ) was above the national average (4.5 per cent per annum) for the 2001-2005 period and it ranked third after Selangor and Johor. Surprisingly, Penang’s growth in mean monthly household income (2.5 per cent) was the lowest.

In the mid-1970s almost a third of households (32.4 per cent) in Penang were poor.

Despite the recent low growth in income, Penang had the second lowest incidence of poverty (0.3 per cent) after the Federal Territory, far below the national average (5.7 per cent) in 2004. And the hard-core poor has almost been eradicated on the island and soon it could be the first state to see no hard-core poverty.

In recent years the disparity between Penang and the richer states has been widening. Its mean monthly household income of about RM3,531 in 2004 is about 68 per cent of Selangor’s but compared to five years earlier it has lost out to Selangor when it had 84 per cent of Selangor’s income. The same observation can be made when Penang is compared to the Federal Territory.

The manufacturing sector is a key growth engine for the economy and especially for Penang which was the pioneer state for the electronics and electrical manufacturing industries. The overall evidence on the income earned by the Bumiputera in manufacturing still shows sizable disparities when compared to the non-Bumiputera and can be taken as disparity-proxy for the Malay average income in Penang.

According to the Third Industrial Master Plan 2006-2020 the mean monthly household income of Bumiputera households in manufacturing (RM2,905) was about 62 per cent of Chinese average income in 2004 when Chinese income fell, compared to about 53 per cent (RM1,735) in 1995. A breakdown of ethnic manufacturing households income in Penang could provide a more definitive picture of income disparity on the island.

Although there is a lack of direct evidence on the economic position of the Malays on the island, the indirect evidence suggests that the growth and development of Penang must have raised Malay income and reduced Malay poverty too but income disparity still remains substantial.

It is not possible to conclude whether the growth of Malay income and the reduction in Malay poverty have been much faster in Penang when compared with the other states.

All ethnic groups have shared in Penang’s growth but it is still an open question whether non-Malay income has grown much faster than Malay income in Penang, and the extent of the so-called Malay marginalisation.

Persistent inequalities, rather than absolute poverty, lie at the heart of the grievance of the Malays on Penang island. While the inter-ethnic disparity in development in Penang is one issue, the continuing controversy in Penang may disguise the related issue of intra-Malay economic disparities.

There is a need to be more clear on this issue and to assess its relative importance in explaining the overall inter-ethnic income disparity and for the grievance of the Malays on the island.

The Penang controversy is a reminder again that one cannot rely too much on market forces to improve income distribution and that there is still a need for more enlightened pro-distribution policies.

The Penang growth experience and track record provides important lessons for assessing the links between rapid industrialisation in a state economy that is integrated with the global economy and its impact on the alleviation of poverty and income distribution, especially inter-ethnic income disparity. Also the role of governance and institutions in reducing inter-ethnic disparities in Penang must be clearly assessed and made much more transparent than has been the case so far. A critical evaluation of the institutions will be necessary.

What is also required is a clearly enunciated plan and programme with targets over a time frame for Malay development and advancement on the island and appropriate policies to go with it.

The large scale development programmes and projects slated for Penang should then be incorporated into this plan and the beneficiaries of the projects must then be publicised and gazetted. The transparent plan will then be the basis for assessing the performance of the state as well as the performance of the Penang Malays.