Progress in Income Distribution: Malaysia

Income distribution efforts include both poverty eradication measures as well as measures to restructure society in the forms of share ownership scheme, training and asset distribution especially of land development programmes involving high return crops such as oil palm and high-yielding rubber clones. Lately, the focus of effort has been the development of Bumiputra entrepreneurship through vendour development scheme, subcontracting and preference in public contracting awards.

The income disparity between the rural and urban areas has narrowed during the years. In 1970, the rural income was only 46 percent of the urban average but by 1990 the ratio increased to 58 percent. On ethnic basis, the Bumiputra income which made up 43.6 percent of Chinese household income in 1970 also expanded to 57 percent in 1990. In terms of employment, the Bumiputras constituted about 52 percent of tertiary jobs in 19 compared with 43 percent in 1970 whilst in terms of occupation the community accounted for 60 percent of professional and technical jobs in 1990 compared with 47 percent in 1970.

A more important area of concern is ownership of corporate shares. The ownership of Bumiputras and trust agencies expand from 4.3 percent in 1971 to about 18.2 percent in 1992 whilst that of other Malaysians increased from 34 percent to 40 percent. Meanwhile, the share of foreigners declined from 61.7 percent  32.4  percent  during  the  period  (another 9 percent is for nominee companies). Hence, the foreign interest has been largely effective by the policy to reduce ownership inequality.

Source: Poverty Alleviation in Pakistan: Present Scenario and Future Strategy, Mohibul Haq Sahibzada. Republished with permission.