The List of CPDS Activities (2015 – 2018):
CPDS Brown Bag Seminar Series on “An Integrated Management Policy Framework for Sustainable Community Development and Conservation of Marine Resources” – 22nd October 2018
Lately, environmental degradation has become a serious obstacle towards economic development, particularly for coastal communities. Tjis gradual degradation of the environment has resulted in adverse effects on lives, the livelihoods, the overall development process of human society and the conservation of natural resources. Despite having an essential and obvious link between biodiversity conservation and economic development, researchers, scientists and economists have placed less effort to contribute to achieving the Sustainable Development Goal (SDG) 14 (conserve and sustainably use the oceans, seas and marine resources in development). Therefore, this study explores the coastal communities’ perceptions on effective management of Marine Protected Areas (MPAs), socio-economic and ecological development for sustainable development of coastal communities. To achieve this objective, the data was collected using survey questionnaires and analysed using the structural equation model (SEM). This study reveals that due to the lack of effective management, the marine park communities are challenged with dual problems, such as poor socio-economic conditions and environmental degradation because of their strong dependency on the natural resources. However, to ensure sustainable community development and conservation of natural resources, an integrated effective management policy framework is profoundly important. Therefore, this study proposed a policy framework, which will help policymakers to achieve the main purpose of the establishment of MPAs as well as SDG-14.
CPDS Brown Bag Seminar Series on “Quantifying the Managerial Ability of Microfinance Institutions: An Application of Data Envelopment Analysis” – 7th August 2018
Microfinance has become an eminent sector which offers small credit to the target group especially to the poor people and small entrepreneurs without collateral, unlike the conventional formal banking sector. At the beginning, Microfinance institutions (MFIs)’ focus was just limited to serve the poor since MFIs were provided with foreign funds. Therefore, it was easy for them to serve solely to the poor people. But now foreign funds have become scarce and the MFIs must manage their own capital to run the institutions. Consequently, MFIs need to focus more on sustainability as well as profitability to remain competitive. Currently, MFIs managers have huge responsibility to remain sustainable and profitable utilizing their abilities, knowhow, experiences and resources. Therefore, it is important to enhance managerial ability to ensure sustainability and profitability of MFIs. Hence, this paper aims to quantify the managerial ability of the microfinance institutions (MFIs) in Latin America and the Caribbean (LAC) countries. Drawing on data for 419 MFIs in 24 LAC countries between 2003 and 2014, we find that MFIs’ managers with higher managerial ability outperform MFIs’ managers with lower managerial ability. The study also finds that managers in Brazil (Trinidad and Tobago) have higher (lower) ability and are more (less) efficient. The findings help policy makers and regulators to propose with policy recommendations for long-term sustainability of MFIs by estimating and decomposing the ability of the managers.
CPDS Brown Bag Seminar Series on “Multi-Dimensionality of Poverty: Meaning and Measurement” – 1st March 2018
Most development scholars and practitioners recognize that poverty is multidimensional, comprising a wide range of potential deprivations across economic, social, environmental, and political domains. Despite this widespread recognition of poverty’s multidimensionality at the conceptual level, the bulk of empirical poverty analysis still tends to focus on a single dimension, which is most often monetary poverty. This seminar reviews the arguments for taking a multidimensional approach to poverty measurement, and highlights recent methodological developments in the quantitative measurement and analysis of multidimensional poverty. Recent application in various countries will be presented, and the practical trade-offs and data requirements of different approaches will be discussed.
Book Presentation: “Royal Professor Ungku A. Aziz: Writing For The Nation” – 15th December 2017
The Royal Professor Ungku Aziz project was undertaken by the Persatuan Ekonomi Malaysia (PEM), Perpustakaan Universiti Malaya, Perpustakaan Peringatan Zaba (PPZ) and the University of Malaya Press (UMP), among others. CPDS participated at a later stage, contributing funding and research assistant for editing support. This initiative resulted in the publication of a 5-Volume book collection entitled “ROYAL PROFESSOR UNGKU A. AZIZ: WRITING FOR THE NATION” which was presented to Pak Ungku on the 15th of December 2017.
At the presentation event, Tan Sri Sulaiman Mahbob the President of PEM spoke on behalf of the association, and collaborating partners in the Ungku Aziz Project. Tan Sri reminisced that, like so many others, he had been one of Ungku’s students at the Department of Economics, University of Malaya, then in Singapore. Tan Sri spoke of the Project, and its usefulness for the current and future generations of students and researchers, who would not otherwise have access to Ungku’s research, philosophy and thoughts. He paid tribute to Ungku for his groundbreaking work, which had led to deep institutional reform, which in turn effectively improved the lot of the rural community, and laid the foundation for national development. He commented on the key role played by Mrs. Khoo Siew Mun, the coordinator of the Ungku Aziz Project in ensuring the completion of the project and thanked all who had contributed.
Dr. Shamsulbariah Ku Ahmad spoke of the importance and relevance of this project to CPDS and expressed her commitment that it will continue as part of the Centre’s research activity and in line with the establishment of the Ungku Aziz Resource Centre (UARC) at CPDS, Faculty of Economics and Administration University of Malaya. CPDS has assigned a staff member to work with collaborative partners and to ensure that UARC’s collection is in line with the mission of CPDS.
Rethinking Poverty & Development Series 2017 on “Mining The Millionaire Minds: Malaysian Millennials & Entrepreneurship” – 12th December 2017
Poverty and development is a dynamic and multi-dimensional subject. Poverty often depicts an image of misery and welfare. Both poverty and welfare are consistently identified as priority issues on the development agenda. The eradication of poverty requires growth and wealth creation followed by redistribution, often referred to as inclusive growth in today’s development vocabulary. Poverty issues are normally relegated to the realm of welfare and policy studies while wealth creation is more the subject matter of business and profit making. Poverty eradication and wealth creation are not often juxtaposed.
Breaking away from the norm, our first Rethinking Poverty and Development Series 2017 brings together the subject of poverty and wealth in today’s topic on “Mining the Millionaire Minds: Malaysian Millennials & Entrepreneurship”.
We have invited our own young and successful entrepreneurs to participate in today’s event:
- to share their experience in their journey that has brought them to this stage in their lives
- to understand the motivation behind their choices in their paths to success
- to know the challenges they have faced and overcome thus far
- to identify the key takeaways that would encourage millennials in particular, in the context of the ever changing national and global scenarios such as recurring economic crises, unemployment, rising cost of living, debt problem among this group and the recognition of the lack of sufficient safety net to mitigate crisis, to be more proactive in defining their goals
The core message in this Rethinking Poverty and Development Series is that we can all be vulnerable to poverty and we need to go beyond welfare and create wealth instead in order to live the life we chose by achieving financial freedom.
How do we do it?
CPDS Brown Bag Seminar Series on “Foreign Labour Policy and Labour Demand in Manufacturing: The Case of Malaysia” – 3rd August 2017
There are calls for Malaysia to align its foreign labour policy with labour market demands in the manufacturing sector. This follows from the over-dependence of the economy on foreign unskilled labour, which in turn has delayed economic upgrading and adversely affected the performance of this sector. The Malaysian government has instituted various policies, coupled with frequent policy reversals, to regulate unskilled foreign labour since they were first permitted into the manufacturing sector in the early 1990s. Yet, it remains unclear how those policy changes have affected labour demand, both foreign and local. Previous related studies on foreign labour in Malaysia have not addressed this issue directly. Instead, the focus has largely been on the wage, labour productivity, and labour substitution effects of immigration. This paper therefore seeks to address the following question: What impacts have changes in the regulatory environment (public policies, laws and law enforcement strategies) had on the utilization of foreign labour? This paper has a two-pronged objective. First, it reviews the key policy changes related to foreign labour in manufacturing since the 1990s to set the background of the study. Demand-side policies are the focus of attention in this paper. Second, it estimates the industry-level demand for foreign labour in manufacturing, taking into account the prominent shifts in foreign labour policy, to provide an outlook on labour market administration.
CPDS Brown Bag Seminar Series on “Preference Constraint for Sustainable Development” – 14th March 2017
This paper defines a sustainable development path as a balanced growth path with environmental conservation. In the framework of endogenous growth theory, it is known that a sustainable development path is optimal only if the following three conditions are satisfied: (1) the engine of economic growth is clean; (2) the assimilation capacity of the environment is high enough to endure the increasing environmental load with economic growth; and (3) the population has an egalitarian propensity with the elasticity of the marginal utility of consumption that is greater than or equal to one. While all of these three conditions are intuitively plausible, there are distinctions between the first two and the last one: the former can be obtained by our endeavors, whereas the latter concerns preference that is endowed rather than obtained. We show that this preference constraint can be relaxed if the production technology satisfies the condition that the elasticity of transformation to the production factor and the environmental service, after appropriate monotone transformation, is greater than one.
CPDS National Stakeholder Roundtable 2017 on “Beyond Poverty: Becoming a Developed Nation” – 9th March 2017
The objectives of CPDS National Stakeholder Roundtable reflects the purpose and commitments of all our core programs towards an inter-disciplinary and multi-dimensional approach to poverty and development studies. CPDS aim to engage experts, stakeholders and the public through our core events listed below:
- The Royal Professor Ungku Aziz Lecture Series
- CPDS Development Forum
- National Stakeholder Roundtable
- CPDS Brown Bag Seminar Series
- Public Outreach Programs
The goals of these core activities are to further develop and strengthen CPDS as a reference point for poverty and development studies, to encourage scholars and experts to share their work and ideas on poverty and development issues that are relevant at the national, regional and global levels, as well as to strengthen the links between government bodies, commercial interests, and the wider community through knowledge transfer, networking, and pragmatic dissemination of information.
More specifically, the aim of CPDS National Stakeholder Roundtable is to engage experts, development practitioners, policy makers, NGOs and observers to re-examine the complex issue of poverty and learn from past experiences to inform future efforts to eradicate poverty hence, ensuring the achievements of broader development goals of a nation. Our intended output below is to fulfill the obove objectives and to chart new directions for CPDS in light of current developments and new knowledge in the field:
- Identify Follow-Up Themes
- Identify Plan of Action and Timeline
- Identify Research Areas/Gaps
- Identify Policy Inputs to Governments
- Identify Collaborative Work with Partner Institutions
CPDS Brown Bag Seminar Series on “Is Poverty Reduction Part of The Gross City Internal Product (GCIP)?” by Dr. Mario Arturo Ruiz Estrada – 19th January 2017
This paper aim introduce an alternative indicator to evaluate the socio-economic performance of any city. This new indicator is termed the “Gross City Internal Product (GCIP)”. The GCIP will show the real socio-economic situation of a city based on the uses of a new set of variables such as: (i) education demand and supply; (ii) production of goods and services (Supply); (iii) goods and services demand; (iv) social protection coverage; (v) poverty levels; (vi) income per capita distribution; (vii) public transportation supply; (viii) final total net sells yearly; (ix) real states prices and transactions annually; (x) savings ratio; (xi) labor market demand and supply; (xii) population growth; (xiii) immigrants gross rate; (xiv) formal and informal sector income generation; (xv) local government spending (investment and maintenance); (xvi) unemployment ratio; (xvii) physical infrastructure value, (xviii) tax value, (xix) local forces security budget; (xx) demand and supply of public goods and services; and other important variables. We believe that by evaluating large cities in the same country we can have a better understanding of the socio-economic development variables are performing and its evolution in the short and long run. We believe that the GCIP could be an important guide for targeted public policy measures to address the social aspects of economic development, especially in relation to the rise of poverty in urban areas while ensuring the optimal use and sustainability of resources.porting countries as well as labour-receiving countries. Sizeable populations of undocumented migrants also present distinctive public health challenges. As an example, the SARS pandemic erupted, and subsided, over an eight-month period in 2002-03 in the absence of therapeutics, clinically-useful diagnostics, and vaccines. One of the key control measures – quarantine and meticulous contact tracing – would be difficult to implement when large populations of undocumented migrants have a strong incentive to avoid contact with government agencies. In this seminar, we will also discuss taxation and social entitlement regimes which exist (or could be designed) for migrant workers and their dependants in Asean host countries (notably, affordable healthcare and education).
Seminar on “Migrants, Rights, and Health Security in Southeast Asia” by Dr. Chan Chee Khoon – 17th October 2016
The Right to Health, operationalised as Universal Health Coverage in a national context, often translates into citizen entitlements, which results in migrant workers (documented and undocumented), refugees, and asylum seekers falling through the cracks. This has given rise to urgent labour and human rights concerns for Asean member states which include major labor-exporting countries as well as labour-receiving countries. Sizeable populations of undocumented migrants also present distinctive public health challenges. As an example, the SARS pandemic erupted, and subsided, over an eight-month period in 2002-03 in the absence of therapeutics, clinically-useful diagnostics, and vaccines. One of the key control measures – quarantine and meticulous contact tracing – would be difficult to implement when large populations of undocumented migrants have a strong incentive to avoid contact with government agencies. In this seminar, we will also discuss taxation and social entitlement regimes which exist (or could be designed) for migrant workers and their dependants in Asean host countries (notably, affordable healthcare and education).
Seminar on “Current Realities in Political Economy: Managing Capatalism” by Dr. Elsa Lafaye de Micheaux – 25th July 2016
In the prolific and diverse range of research in Comparative Capitalism Approach conducted over the past 15 years (Ebenau and alii, 2015), Asia been taken into account only recently. And Southeast Asian countries, however, have largely remained at the margin of this recent agenda. Solid methodologies have been developed in New political Economy to tackle the institutional diversity of capitalisms in distinctive socio-economic context than the developed countries upon which the VoC’s literature have been built. Among these approaches considering the diversity of capitalism, the older institutionalist perspective of Régulation Theory (Boyer, 1990; Amable, 2003; Boyer et alii 2012) allows to frame the consistency together with the complexity of the Malaysia’s capitalism, according to its specific institutional hierarchy and complementarities. Introducing the Regulationist framework to depict the consistency and transformation of the Malaysian Capitalism over the last 15 years, my talk proposes also to scrutinize the subaltern position of labor in the institutional hierarchy of the Malaysian Capitalism. Under the recent economic rise of China, the institutional dimension of the international integration has experienced a strong change. And as become important in determining economic performance as well as social and political opportunities for the country. As it has always been the case in the longue durée of Malaysian capitalism, the labor dimension is adjusting to the change.
Forum on ”The Pacific Alliance: Latin America-Malaysia Business Prospects” – 26th May 2016
The Pacific Alliance is an initiative of regional integration comprised by Chile, Colombia, Mexico and Peru, officially established on April 28th, 2011 whose main objectives are:
- Build in a participatory and consensual way an area of deep integration to move progressively towards the free movement of goods, services, resources and people.
- Drive further growth, development and competitiveness of the economies of its members, focused on achieving greater well-being, overcoming socioeconomic inequality and promote the social inclusion of its inhabitants.
- Become a platform of political articulation, economic and commercial integration and projection to the world, with emphasis on the Asia-Pacific region.
Today, with 42 observant countries, the Pacific Alliance’s constant growth has been well studied all over the world as a successful integration process that has led to the liberalization of 92% of goods, among the four country members, on May 1st, 2016. The recent changes in the global order leave a fortunate frame for Malaysia to discover new mechanisms of integration and business incentives that the other end of the Pacific offers. Mechanisms like the Pacific Alliance will improve investment flows and research involving ASEAN, and will also bring new opportunities to the SME environment.
Seminar on “Malaysian Classroom Educational Practices: A Bird’s Eye View” – 9th March 2016
Malaysia’s public education system has seen a significant decline in learning outcomes in the last decade or so, despite large amounts of spending as well as waves of reforms. We know from forty years of educational research that teacher’s practice is the most significant school-based factor in predicting the effectiveness of education. Yet, in Malaysia, we know very little about what really goes on in the classroom, particularly against important educational practice indicators. This is one of the key gaps that this project is attempting to address. Random sampling was done from 2000 public secondary schools. The final sample consists of 24 schools and involved 153 teachers teaching Form 1 core subjects (Mathematics, Science, Malay and English). In all, 153 questionnaires were collected as well as more than 20,000 minutes of video data from more than 400 lessons. We will discuss a key outcome of the study: A bird’s eye view of the educational practices carried out in Malaysia’s classrooms.
Seminar on “The Strategy of the International University Network on Cultural and Biological Diversity (IUNCBD)” by Prof. Pierluigi Bozzi – 7th March 2016
The innovative mission of the IUNCBD Network established in accordance with the Secretariat of the Convention on Biological Diversity (CBD) has been developed in response to the deep concerns expressed on the gap of coordination and knowledge between high education and the International Conventions/Organizations that operate at multi-level in the field of cultural and biological diversity. IUNCBD aims at:
- establishing innovative linkages between academia and the multi-scale international policy in both directions to:
- integrate policy agendas and programmes of work into the academic system of studies
- enable universities to play a role in informing policy and linking the policy agendas and programmes of work to the local context to which they belong
- bridging the gap between academic and policy/management perspectives, between education and capacity building, between universities and the local contexts to which they belong
- developing the integration between communication, education, research, capacity building, public awareness and the policy implementation processes (‘CEPAplus’ in the IUNCBD strategy)
- allowing universities to play a dynamic role as local social drivers opened to society, local/indigenous communities, experts, policy makers
- designing and institutionalizing beyond the logics of short term projects innovative integrated teaching/research/outreach curricula, taking into account:
- the local context and the evolution of the multi-scale policy implementation.
- the visions and involvement of local communities and indigenous peoples, their own learning processes, capacity building needs and traditional knowledge systems.
Among other policy agendas, the historical establishment of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystems Services (IPBES) is the high response to the need of a pivotal institutional innovation in the global interface between science and policy. The IUNCBD Biodiversity 2020 Action Plan: Linking Education Science Policy and Society has drawn up an advanced synthesis designing, among other initiatives, an international pilot proposal in order to implement the Stakeholder Engagement Strategy of the IPBES Work Programme and add value to the curriculum of the IUNCBD universities members: the pioneering establishment – at country level – of a National or Local IPBES Stakeholders IUNCBD Forum led by a visionary university – in case Malaysian University/Department – as operative platform and support tool at the interface between science policy and society. Multidisciplinarity is a fundamental dimension recognized by the IPBES constituent document as well as a core element of the IUNCBD mission and strategy.
Dialogue on The Eleventh Malaysia Plan 2015-2020 and Malaysia Education Blueprint 2015-2025 “The Enterprising Nation: Education for Development” – 28th January 2016
The government recently released two important documents: the Malaysia Education Blueprint 2015 – 2025 (Higher Education) and the 11th Malaysian Plan, 2016-2020. This forum proposes to review these two documents collectively, given the close link between quality of education and equitable forms of economic development. Two core issues have to be addressed by tertiary institutions in the public and private sectors when reviewing these public documents. First, how to create an appropriate educational experience that would equip students with skills necessary to cope with a constantly – and rapidly – changing economy. Second, how to create an environment under which the research expertise of the academic fraternity may be harnessed more directly to identify and provide programme and policy or scientific and technological solutions that would help to meet the country’s development objectives. At this forum, the following issues will be reviewed:
- Towards an Enriching Educational Experience
- What curriculum reforms are necessary to nurture human capital with the ability to think in a creative and critical manner that can enhance innovation?
- How can inter-disciplinary tutelage and research be promoted to cultivate innovation that draws on Malaysia’s indigenous knowledge, a method also to develop niche- and rural-based industries?
- To achieve this mode of tutelage, what balance of vocational training and liberal arts-based education should be introduced?
- How can we create a freer, more vibrant campus environment that would help nurture individual enterprise, competition and responsible citizenship that the Blueprint envisages?
- Are the policy proposals in the 11MP adequate to help Malaysia escape the high middle income trap that it is now in? Due to increased global competition, there is a lot of premium on research and development (R&D) and postgraduate studies. Do the strategies of the 11MP to attain a developed economy provide enough incentives or allocate enough resources to universities to encourage students to do postgraduate studies, and subsequently work in universities (to create the much-needed talent for universities and colleges, we need incentive schemes to encourage the best minds, both local and international students, to not only take up postgraduate studies, but to also recruit them)
- How can productivity – industrial, technological and agricultural – be further boosted to raise incomes and improve life chances?
- Research for Development
- The role of R&D in ensuring a successful transition to developed status, must be factored into the 11MP.
- What are the specific R&D needs of the country’s key or emerging sectors of the economy? How can the research expertise of universities be mobilized to contribute to these needs?
- What kind of academic-based research is required to aid the development of entrepreneurial domestic industries?
- Will the initiatives and strategies in the 11MP generate high investments in R&D as well as attract domestic and foreign investments?
This forum aims to initiate a dialogue between government, industry and academia of methods to improve socioeconomic development through joint public and private sector initiatives. This day-long forum, comprising bureaucrats, academics from public and private universities and members from key sectors in the private sector, aims specifically to determine:
- The kind of university-industry research that can be jointly done to drive the economy;
- Mechanisms that shape requisite policies to facilitate joint university-industry research that will also be fed into a curriculum that can equip students with relevant training; and
- Secure full or part private sector sponsorship for the kind of relevant research that industries think should be done.
This forum, a joint endeavor by the University Malaya and HELP University will be convened Thursday, 28th January 2016.
Public Lecture on “Contradictions of Economics Development: A Close Look at The Plight of The Vanishing Sea Gypsies in Iskandar Malaysia” – 25th November 2015
Many know of Iskandar Malaysia, a rapidly booming, bustling economic development zone in south Johor (now reputed as the fastest growing state in Malaysia) with theme parks like Legoland, shopping complexes and numerous housing projects. What is hardly known or realized, however, is the existence of small groups of Orang Asli living in very primitive enclaves within Iskandar Malaysia. It is this juxtaposition between the modern Iskandar Malaysia versus the ancient world of the Orang Asli tribe called the Orang Selatar (the fabled sea-gypsies that once plied the Singapore-Johor Straits) that has attracted the attention of Professor Jamilah Ariffin, a trained sociologist, social activist and the wife of Dato’ Abdul Ghani Othman, former Chief Minister of Johor. She carried out a 13-year research programme (2000-2013), where she observed the establishment of Iskandar Malaysia right from its inception. She also studied, in great detail, the Orang Selatar in terms of their history, culture and life-style, and sought to understand their attitudes, hopes, dreams and aspirations for survival. Professor Jamilah Ariffin is guided by this leading question: “What is the fate of these poor Orang Asli community, handicapped by lack of education, modern skills and knowledge and trapped in the swift, rising tide of Iskandar Malaysia’s rapid development and modernization, which must be accomplished by 2025?”. Using a life-cycle approach, which studies the culture and traditions of the Orang Selatar from birth until death, interspersed by events pertaining to puberty, courtship and marriage and economic livelihood, Professor Jamilah Ariffin describes the detailed research findings based on accounts by those were chosen to represent three generations of Orang Selatar, namely, the youth, the middle-aged and the old from three different villages. This can be a valueable book not only for students of Development Economics and other branches of Social Sciences, but it also provides interesting reading for the general public. The author intends to raise the awareness of the public on the fragile and vulnerable position of the poor Orang Selatar in their quest for survival within the context of a modern, fast-paced world.
Public Forum on “The First Malaysian Human Development Report: Redesigning an Inclusive Future” – 25th March 2015
For decades, Malaysia generated economic growth, transformed its profile from a primary goods producer to a manufacturing exporter, reduced income poverty and inequality, raised education and health attainments, and moderated ethnic disparities. Growth has been sustained and shared through consecutive implementation of a series of development policies. However, socioeconomics progress has slowed down since the 1997 Asian financial crisis. Notably, contemporary Malaysia sees persisting inequalities, especially of regional, gender and ethnic dimensions, and lagging development of human capability, of institutions fostering inclusiveness and of effective governance. Social exclusion, barriers to social mobility and economic insecurity stand in tension against the objective of greater inclusiveness woven through all development visions and plans. Malaysia’s first Human Development Report defines inclusive growth as comprising equitable distribution of benefits of economic growth and of social spending across distinct income groups and the poor irrespective of their group membership; robust generation of broadly accessible opportunity for economic participation and safeguards for the vulnerable; and inclusion of citizens in policy formulation and implementation, towards minimizing social exclusion and increasing social cohesion. In accordance with the breadth of inclusive growth, we adopt a multidisciplinary and multidimensional approach encompassing economic, social, political and legal elements, highlighting regional, gender, ethnic and aspects of relative deprivation.
Public Lecture on “Size Matters: Why Is It So Small and How to Enlarge It. The Middle Class” – 4th March 2015
The lecture will address the issue of the middle class in inequality and Inclusive Growth, which entails lifting households out of poverty and facilitating upward, especially inter-generational, mobility through graduation to middle class status. Noting the difference between the “aspirational” middle class reported by the World Bank recently which was put at 65% of all households, while the finding of the first Malaysian Human Development Report 2014 put the “actual” middle class size, defined in income terms by the World Bank as those households positioned between 20% above and below the median income, has remained relatively small for Malaysia, trending around the 22% level when in comparison in the typical developed country situation the percentage is closer to 50-55%, the lecture will attempt to explain why the Malaysian middle class is relatively so small through historical comparisons as well as with countries at a similar stage of development.
This lecture will note that the median income profile of the NEP generation improved more rapidly than that of the earlier generation and in comparison with the post-NEP generation, though the median levels of incomes are higher for the latter. In other words middle class formation was fastest during the implementation of the NEP in the twenty-year period involved, but evidently not in the liberal and globalization era after the Asian Financial Crisis of 1997.
The lecture will also describe the status of the middle class in terms of the composition of its fiscal capability. While the bottom 50% has wages/salaries making up 97% of their purchasing power, the upper part of the middle class would exhibit a similar pattern to the upper 50% with contribution from wealth effects approaching 11% and increasing as they climb the income ladder. In other words, on the basis of household fiscal capability Malaysia essentially exhibits a two-class social stratification, with inequality diminishing between ethnicities but within-group income gaps rising more and more to obliterate the NEP-based ethnic classification as a relevant issue of equity in development. Income inequalities then become essentially a question of class.
The lecture will seek to find the factors behind this, including issues such as the contribution of labour productivity to per capita income growth, wage-productivity gap and the wage premium, and the distortions attributable to policy and institutional failure, and conclude with some exploration of how to enlarge the middle class through appropriate interventions through the next generation of development policies.