Relook policies aimed at reducing income disparity: Economists

PETALING JAYA: Economists flag income disparity as one of the issues that has to be relooked, ahead of the mid-term review of the 11th Malaysia Plan set to be tabled on Oct 18.
Malaysian Institute of Economic Research (MIER) executive director Prof Dr Zakariah Abdul Rashid said at a media briefing today that the policies related to income disparity between race, state and income group's should be scrutinised and if possible reviewed.
"This is a long-term plan, so it is essential to look at how it can strengthen the economic fundamentals to spur productivity. The allocation of resources is also an issue that has to be relooked given that the income disparity has widened between income groups, race and state," he explained.
Socio-economic issues such as income disparity and cost of living has to be tackled to ensure that the economy is manageable in the long term.
Concurring with this, Sunway University Business School professor of economics Dr Yeah Kim Leng told SunBiz that unless inequality of income within individual communities is addressed, it will be difficult to bridge the gap on a national level.
However, he said it is timely to shift to needs-based economic policies to reduce disparity, to accelerate and promote an inclusive growth, maximising potential, fully utilise resources and unleash potential of communities.
Meanwhile, the executive director of the Socio-Economic Research Centre (SERC), Lee Heng Guie, said the mid-term review is expected to have programmes to mitigate cost of living burden and uplift the Bottom 40 (B40) group.
Areas such as human capital development, infrastructure and technology are also key in bridging disparity.
Lee opined that bridging income disparity is not only about reducing the number of taxes imposed but also through tangible and intangible initiatives such as education, investment in job creation and increasing income.
On expectations for the mid-term review, both Yeah and Lee noted that the government will come up with plans moving in the direction of the digital economy and the fourth industrial revolution.
Lee said while the policies on the original plan will be maintained while new dimensions will be added to it.
He also said it will be interesting to see if past targets such as reaching a high-income nation status by 2020 and economic growth projections of 5-6% per annum will be reset.
Yeah added that structural transformation to attain fiscal sustainability, reducing impediments to sustainable growth, private sector-led economic growth are areas to look out for in addition to social, environmental aspects and political maturity.