A solution must be found to help retirees get hold of smaller portions of decent-yielding corporate bonds Retirees can also close the gap on their replacement rate through investment funds that pay out dividends monthly
ONE of the best ways for retirees to secure a good income replacement rate is by generating decent yields from their investments.
The replacement rate refers to the percentage of a person’s pre-retirement income that is replaced by retirement income.
A reliable source of this yield can come from corporate bonds.
However, for those looking to tap into such investment products, getting your hands on decent-yielding corporate bonds is not easy.
The reason for this is simple: access to these bonds often seems to be reserved only for the banks’ rich clientele through their private wealth management services.
For instance, bonds issued by local banks or blue-chip corporations that yield around 6% to 7% annually typically require a minimum investment of about RM250,000.
But why are these bonds not sliced and diced for the man on the street?
Some argue that banks, which manage the issuance and sale of these bonds (just like they handle initial public offerings), take all for themselves and their wealthy clients.
Banks, in turn, claim that there just isn’t enough corporate bonds coming into the market.
Incidentally, government debt papers, which are highly secure, typically do not provide sufficiently high yields to make a meaningful difference for retirees.
A solution must be found to help retirees get hold of smaller portions of decent-yielding corporate bonds.
Additionally, another way to boost yields for retirees and close the gap on their replacement rate is through investment funds that pay out dividends monthly.
This is a healthy, growing trend among issuers, and more unit trust and asset management companies should follow suit.
Finally, while the unit trust market has made strides in lowering fees – a thorny, ongoing issue – some players still charge too much.
Regulation should be introduced to ensure that the man on the street does not get unfairly charged for products that he or she relies on to provide income during retirement
Civil servants have been told to increase their productivity following the salary review of civil servants.
In his speech during the 19th Majlis Amanat Perdana Perkhidmatan Awam in Putrajaya today, Prime Minister Datuk Seri Anwar Ibrahim said the increase in salary would not be useful or benefit the country if civil servants were stuck in old habits.
One for the album: Anwar posing with civil servants at the 19th Majlis Amanat Perdana Perkhidmatan Awam (Mappa) at the Putrajaya International Convention Centre. — Bernama
PMwants to see a new spirit in civil servants following pay hike, Have a spring in your step
PUTRAJAYA: Starting next Monday, Datuk Seri Anwar Ibrahim wants to see civil servants coming to work with a new spirit and work culture.
Following the increase in wages for government servants, the Prime Minister said he did not want to hear the public asking why they had to wait two hours to get a licence and up to two weeks for other matters.
Anwar also said department heads who failed to report misconduct by their subordinates would face disciplinary action.
“For example, there are headmistresses who wanted to protect the school’s image and didn’t even report cases of students being tortured.
“There are also department heads who did not report their subordinates with extraordinary wealth.
“Therefore, if it is proven, these department heads will not be promoted,” he said during the 19th Majlis Amanat Perdana Perkhidmatan Awam (Mappa) yesterday.
Anwar earlier announced a 15% pay raise for officers under the implementing, management and professional groups and a 7% hike for officers in top management and professional roles.
He also instructed department heads to constantly implement job rotations to prevent incidents of misconduct among public officials.
Anwar, who is also Finance Minister, said civil servants must ensure services to the public are aligned with their core responsibilities to avoid a waste of expertise.
“I want this issue to be reviewed by the relevant ministries to ensure that our resources are realigned to where they are needed,” he added.
He also warned businesses not to take advantage of the recent salary hike to raise the prices of goods.
“I also hope the private sector, especially companies that record high profits, will follow the government’s move to raise salaries to appreciate the services and sacrifices of their employees,” he added.
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KUALA LUMPUR: The JaminKerja Keluarga Malaysia initiative will support the government’s goal of reducing the unemployment rate by providing 600,000 job opportunities this year, says the Prime Minister. `
Datuk Seri Ismail Sabri Yaakob said these would be provided via an allocation of RM4.8bil, which is a key thrust under Budget 2022 on job creation. `
“The JaminKerja Keluarga Malaysia initiative is the manifestation of the government’s commitment to providing more employment opportunities and more sustainable economic development to drive the country’s recovery efforts in a structured manner and to contribute towards strengthening the national labour market. `
“Malaysia is on the right track in its economic recovery efforts through the creation of more employment opportunities to fulfil the needs of the labour market,” he said at the launch of the JaminKerja Keluarga Malaysia initiative themed “Keluarga Malaysia, Makmur Sejahtera” and JaminKerja Keluarga Malaysia Career Carnival 2022 at the KL Convention Centre here yesterday.
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CLICK TO ENLARGECLICK TO ENLARGE
The JaminKerja Keluarga Malaysia (Malaysian Family Job Guarantee) initiative is a collaboration between the Finance Ministry, Economic Implementation and National Strategic Coordination Agency, Human Resources Ministry, Social Security Organisation (Socso) and Human Resource Development Corporation (HRD Corp). `
Also present at the launch were Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz and Human Resources Minister Datuk Seri M. Saravanan. `
The initiative consists of three main programmes, the first of which is the JaminKerja Employment Initiative that will be implemented by Socso with a target of providing about 300,000 job opportunities. `
The second is the Malaysia Short-Term Employment Programme (MySTEP) that will offer 80,000 job opportunities in the public sector, government-linked companies and strategic partners. `
The third is the Upskill Malaysia programme implemented by HRD Corp to provide practical skills training for job seekers to improve their marketability and provide guaranteed job placements. `
About 220,000 trainees will be targeted. `
Ismail Sabri said the JaminKerja Employment Initiative will also focus on efforts to encourage employers to hire especially individuals who were not actively working such as the unemployed, and vulnerable groups consisting of the disabled, former prisoners, the elderly and women who were unemployed for a long time. `
“This is to ensure that no group is left out,” he added. `
Ismail Sabri said once employers are given the incentive to hire, job seekers could use the MyFutureJobs platform to get job matches and fill the vacancies that are offered, adding that incentives will be given to employers who employ locals to fill jobs that used to be filled by foreign workers or expatriates. `
The government, he said, is committed to helping the entrepreneurial community, which hires and creates job opportunities, so that they could continue to grow and rebuild their business through the Semarak Niaga initiative worth RM40bil. `
The Prime Minister added that the Human Resources Ministry, too, has planned 312 open interview programmes and employment carnivals throughout the year. `
“The JaminKerja Keluarga Malaysia Career Carnival is the curtain-raiser for 2022 and is the first to be organised in the country, offering more than 12,000 job opportunities from 50 employers from various industries,” he said. `
To reduce the skills mismatch gap, Ismail Sabri urged the industry to implement better recruitment strategies by taking into account social changes including a more flexible work environment. `
“As the National Employment Council (NEC) chairman, I am confident that the efforts of the NEC in enhancing the momentum of job creation as well as boosting the job market will be able to continue through the JaminKerja Keluarga Malaysia initiative, which in turn will also strengthen the Malaysian Family household income, especially underprivileged groups, and the B40 and M40,” he said.
Climate
concern: The sun rising behind the chimneys of a thermal power station.
A recent International Monetary Fund study points out that the richest
countries represent only 16% of the world population but almost 40% of
CO2 emissions. — AFP
INCOME and wealth inequality is unjust, and yet the world continues to tolerate rising injustices, the most recent being inequalities in vaccine distribution.
French political economist Thomas Piketty and his colleagues at the World Inequality Lab has just published the World Inequality Report 2022, a real goldmine for data and insights on global inequalities.
I found at least three nuggets inside that are blindingly obvious, but no one has quite tied it together so well as Piketty and his team.
First, inequality is primarily a political issue. We can all do something about it, but since politics has been captured by money, the few remain more equal than the many.
Between 1995 and 2021, the top 1% wealthiest people in the world captured 38% of the growth in global wealth, whereas the bottom 50% had a pitiful 2% share.
Similarly, the richest 10% of world population take home 52% of global income, whereas the bottom 50% earned only 8.5%.
The report showed why these inequities could not be reduced despite increases in average income and wealth per capita.
The progressive tax rates where the rich paid more than the poor, introduced in the first half of the 20th century to deal with inequality, were dismantled in the 1980s.
The neoliberal free market philosophy preached low taxes and small governments to encourage entrepreneurship, but effectively handed more income and wealth to the elite few.
Piketty’s second historical insight is that Europe and later America got rich on the back of both the Industrial Revolution and colonisation.
In 1820, between country (inter-country) inequality was only 11% of global inequality meaning that most inequality was domestic (intra-country).
But inter-country inequality rose when the West advanced with industrialisation and resource extraction from the colonies.
That peaked in 1980 when it represented 57% of global inequality.
Since then, the rise in income of China, India and other newly independent countries narrowed the gap with the West, but by 2020, domestic inequality again accounted for 68% of global inequality.
This meant that the developing countries allowed their own inequalities to worsen, even as they were narrowing the gap with the West.
In short, the rich are the same everywhere. They have more and want more.
But there is a twist to this story.
One reason why the Rest has caught up with the West is that “nations became richer, but governments have become poor.”
In essence, because the Europe, north America and Japan governments used debt to tackle slow growth since the 1980s, private wealth grew at the expense of public wealth.
Privatisation policies transferred public wealth such as utilities to the private sector, whereas public sector debt continued to increase.
The UK and US public wealth which was around 15% to 30% of total wealth before the 1980s declined to net liabilities of minus 10% to minus 20% of total wealth respectively.
Contrast this with China and Russia, where public wealth represents around 30% of national wealth, down from 70% at the end of the 1980s.
The third report insight is that inequalities and climate change are highly co-related.
Between 1850 and 2020, half (49%) of historical carbon emission was accounted by north America (27%) and Europe (22%),
China accounted for 11%, but has become the largest emitter, although per capita emission remains lower.
A recent International Monetary Fund study pointed out that “the richest countries represent only 16% of the world population but almost 40% of CO2 emissions.
The two categories of the poorest countries in the World Bank classification account for nearly 60% of the world’s population, but for less than 15% of emissions.”
The COP26 debate was all about whether China, India and other emerging markets that are increasing their carbon emissions should do more on net-zero pledges.
The entanglement between CO2 emission and income and wealth levels suggests that climate warming policies should focus more on making those responsible for carbon emissions pay more for remedial climate action.
The bottom 50% of population in Europe emits around five tonnes of carbon per person per year, with their counterpart emitting three tonnes in east Asia and 10 tonnes in north America.
But the top 10% in these regions account for 29 tonnes in Europe, 39 tonnes in Asia and 73 tonnes in North America.
Indeed, the top 1% in the United States account for 269 tonnes of carbon per person per year, compared with 139 tonnes for the top 1% in China.
The rich everywhere are the biggest carbon emitters.
This suggests that tackling climate change and social injustice are part of a total political package, cutting across nations.
It’s one thing to promise to cut carbon to net zero, it’s another to design the projects and programmes to deliver on their promises. Back home, each government will face huge resistance from vested interests that want to delay or just green-wash any action. In other words, talk more and do less.
The report has made some excellent suggestions to tackle inequality, such as progressive tax measures and a global asset register, that are bound to be controversial. But to be effective, they need global cooperation.
No single country can impose higher tax rates or tougher action without being undercut by another country.
Since everything is politics, I have to agree with inequality blogger Branko Milanovic that the recent Summit on Democracies is the wrong idea for the world, because it tried to divide the world into two opposing ideological camps.
The priority should be to work together globally to tackle climate and human inequalities that require domestic action against vested interests that are common across nations.
The next global summit should be about how to tackle inequalities.
Given such complex issues and facts raised by the Piketty and his colleagues, the least we can do is to have a democratic, transparent and constructive dialogue on how those who can afford and emit more carbon should pay more taxes to foster a more sustainable and inclusive world.
Andrew Sheng writes on global issues from an Asian perspective. The views expressed here are the writer’s own.
A PARADIGM shift occurs when the usual ways of thinking or doing things are replaced by new and different ways. This normally happens when fundamentals are progressively changed.
Developing a country takes time, starting with a holistic education that seeks to address the emotional, social and ethical needs of students, apart from academic studies and skills training. Students must reflect on their actions and how they impact the local and global community, and engage in projects that require critical thinking skills towards solving real-world problems.
But if education is centred on rote learning just to pass school examinations and plagiarism to gain academic qualifications, young adults will be unproductive, and the country will remain poor. This is evident in Malaysia as huge numbers of graduates are churned out every year but most are underemployed or remain unemployed for months.
Not in Singapore, though. It separated from Malaysia in 1965 and developed on its own to become a rich nation, thanks mainly to good governance and sound education. Although the cost of living in Singapore is high to match the high living standards, the average Singaporean salary is several times higher than in Malaysia, allowing for more disposable income and savings. Hence, there are about a million Malaysians, or former Malaysians, residing in Singapore, and another 350,000 workers and students who commuted daily from Johor in pre-pandemic times. Malaysia had also lost much of its human capital to many countries around the world over the years, initially to Britain and then to the United States and Australia and, in recent years, China.
While other non-english speaking countries have adopted or promoted English as their second language to be better connected to the world, we are doing the exact opposite. In fact, some politicians seem bent on nurturing island mentalities in cultivating their support base by sowing fear of other races, religions and languages. Those who truly love their own race, religion and language would focus on lifting their community, which would be admired universally. But such efforts require too much hard work, it seems.
Sadly, our country will not be transformed if people remain insular, if we remain, as the Malay proverb puts it, “katak di bawah tempurung” (frog under a coconut) shell).
One of the best ways for Malaysians to be exposed to the world is to be multilingual by not only learning our national language but also other important languages. Mandarin and Tamil could easily be learned in vernacular primary schools, and these students could later contribute greatly to economic and cultural ties with China and South India. Likewise for Arabic, Japanese, Korean, German, French and Spanish. In any case, learning at least three languages would expose Malaysians to a great variety of cultures and ideas.
Apart from the valuable exposure gained by communicating with people of different races, religion and cultures, it is also necessary for those at the top to come down from their ivory towers.
Recently, Transport Minister Datuk Seri Wee Ka Siong made a surprise visit to the Road Transport Department in Johor Baru and was shocked by the long queue for counter service. He rightfully described the counter service system as “ancient”. He then used Facebook to voice his unhappiness about a host of problems and the immediate actions that he had taken.
If we wish to modernise, we should not continue to be bogged down by antiquated methods and mindsets. We should continuously take small, medium and large incremental steps to move forward.
If not, we will stagnate and be left behind while other countries, such as Indonesia, race ahead. But some of our politicians seem to prefer to harp on racial, religious and language issues, and raise petty matters in Parliament hoping to gain popularity.
Perhaps a paradigm shift will only occur when a coalition wins by a two-thirds majority in the next general elections and the economy ends up in total shambles. Perhaps if everyone is forced to work together to rescue our country from total disaster, we could still rise from the ashes.
Many Malaysian are EPF contributors and have FDs as well. "You will never understand how bad the feeling is when you have to break your fixed deposit to cover your living expenses."
ONE of the top financial concerns of retirees is running out of money.
Whether you were an executive earning a reasonable income, or if you are making top dollars as a businessman, the fear is still valid.
For example, Tommy, who left the working world soon after selling his factory to a European multinational corporation. Tommy shared during one of our meetings that he was golfing every week and globe trotting almost every other month.
However, there was a problem that greatly bothered him. He found that he was dipping into his fixed deposit every now and then just to maintain his interesting lifestyle.
“Yap, you will never understand how bad the feeling is when you have to break your fixed deposit to cover your living expenses, ” he said.Combing through all of his finances, we discovered that Tommy’s lackadaisical attitude was to be blamed. He has not been paying enough attention to invest and generate income from the RM12mil nest egg that he had painstakingly accumulated. His investment portfolio was a mess.
Over the years, he invested in a few properties but never really bothered to oversee them. When tenants left, he didn’t make an effort to secure new tenants. In fact, some properties were even sitting vacant and idle. His excuse? He was too busy running the business.
Yap Ming HuiYap Ming Hui
Tommy has also invested in some shares and unit trusts but he seldom monitors and reviews their performances. Imagine his surprise when he went looking for some extra cash but discovered that most of the investments were not making money. Prior to meeting me, he couldn’t decide whether to sell or to keep those underperforming investments.
Consequently, the bulk of Tommy’s wealth is in fixed deposit. The trouble is the interest income from fixed deposit barely covers the impact of inflation. As such, if Tommy continues to spend on his interest income, he will risk having the principal depleted.
Asset rich, income poor
Tommy’s problem is a typical case of “Asset Rich, Income Poor.” His situation is definitely not unique. In fact, I find most self-made millionaires or business owners, typically strong at creating wealth from their business or professional career, but poor at generating income and gain from the created wealth.
For one, all the time spent ensuring their businesses succeed also takes them away from making sure that the wealth created is optimised.Let’s examine Tommy’s assets and see how it measures up (see chart).
The RM6mil in fixed deposit generate approximately 2% interest income. However, notice that the 2% of interest is not sufficient to offset the 4% inflation provision. As a result, there is negative net income coming from Tommy’s fixed deposit asset.
Tommy’s properties are worth RM3mil and only generates RM50,000 in rental income per annum. Nevertheless, this can be considered a net income because inflation will be hedged by capital appreciation (at least 4% per annum) of the properties.
The RM1mil in shares gives a total return of 5%. Factoring 4% inflation, the actual income received from share investment is RM10,000.
Unfortunately, the RM2mil unit trust investments didn’t offer any returns. After inflation provision, his unit trust investment has a net income of RM80,000.
The reality is if nothing is done now, Tommy’s wealth will continue to shrink by RM140,000 a year once inflation is factored to the equation. How does this play out for Tommy? The fact that he needs RM360,000 a year to maintain his current lifestyle will not augur well for him.
So, how can you prevent from ending up in Tommy’s situation?
The optimisation measures
> Remember to review the performance of each of your investment asset classes. In order to generate more income and gains, be proactive in getting rid of poor quality and poor performing investments. Look at each investment and ask yourself, should you keep it or should you sell?
> Consider moving fixed deposit into higher return investment.
Any gains from your fixed deposit would probably be eroded by inflation, especially given the current low interest, which will probably persist for quite some time. After calculating and providing for your emergency fund cash reserves, the balance of your fixed deposit should be invested into other investments that can generate higher return and income to hedge against inflation.
> Diversify the source of retirement income
Even if one investment asset can give you a good income and hedge against inflation, it does not mean that you must bet all or the majority of your wealth in it. For example, property investing. Some investors have found success in it. They were able to generate good capital appreciation and rental income.
As a result, they put a majority, if not all, of their wealth into properties. It may sound logical at first but rental income is not sustainable in the long run. It is subjected to changes, some of which cannot be controlled. Therefore, the best practice is still to diversify your retirement income across different asset classes, like share dividends and capital gains, unit trust gains, bond investment gains, retirement income products and others, so that it is not badly affected by any one impact.
The ability to grow your wealth during retirement years is important. Just because you have stopped working, it does not mean your money should stop working too. The idea behind wealth optimisation is to ensure that you can upkeep your retirement lifestyle and protect your wealth from inflation.
Ideally, one should get a plan done a few years prior to retirement to see how your retirement income would play out. After all, you wouldn’t want to have any unpleasant surprise, like in Tommy’s case. When you have time on your side, you can improve your investing skills and adjust your retirement plan accordingly while still in your active income earning years.
Yap Ming Hui is a licensed financial planner. The views expressed here are the author’s. Any reliance you place on the information https://www.thestar.com.my/business/business-news/2021/01/09/generating-sustainable-retirement-incomeshared is therefore strictly at your own risk.
Harking after a home: Officials have
acknowledged that the lack of affordable housing is one of the issues
that sparked the unrest in Hong Kong, which has been going on for
months. — AFP
Owning a house is the standard ambition of any individual, however, getting there is increasingly becoming not only a local, but global struggle.
THERE’S a lesson to be learnt from the protests in Hong Kong – politics is about selling hope. So if the young people living in a depressing environment feel they have no future, then the alarm bells should ring loudly.
In the case of Hong Kong, the leaders – mostly technocrats and government officials – didn’t see it coming, or maybe they were just indifferent.
Many young people in Hong Kong feel they stand no chance of becoming a homeowner in their lifetime, and officials have acknow-ledged that the issue is one of the causes that sparked off the unrest.
The controversial Extradition Bill, which allows a Hong Kong resident to be sent to mainland China to face trial, was merely a catalyst. Those protesters couldn’t all possibly believe they’d fall on the wrong side of the law and face the consequences, could they?
Last week, former Hong Kong chief executive Leong Chun-ying was in Kuala Lumpur for appointments with businessmen, opinion leaders and officials, to update them on developments on the island.
I was among the lucky Malaysians picked to hear his thoughts and views on Hong Kong, while he, too, listened to our concerns during the two-hour closed-door meeting.
My co-host and meeting organiser, Datuk Seri Azman Ujang, and I both feel that of all the problems faced by any country in nation- building, none deserves greater priority than housing the people.
What expectation could be more basic than having a roof over our heads, and with it being a decent and affordable one at that? And when we talk about affordable, it should be truly attainable by the low-income people who form the bulk of the population in most countries.
Azman, the Bernama chairman, rightly outlined the consequences of the failure that stems from a lack of will in resolving the housing problem of the masses. And as he said, this could easily lead to people pouring into the streets protesting issues not even directly related to housing.
It’s a fact that many poor Hong Kong people live in a room less than 75sq ft, and millions live in deplorable conditions.
More recently, “nano” flats – tiny apartments less than 200sq ft – have fast become the norm in overcrowded Hong Kong.
According to a South China Morning Post report, the cost began at HK$2.85mil (RM1.52mil) for an apartment no bigger than an average Hong Kong car park space, but the lack of interest forced a rethink by the developer.
But what’s mind-boggling is that while there are plenty of poor people in Hong Kong, or many who feel poor, Hong Kong’s fiscal reserves stood at HK$1.16tril (RM620bil) as at the end of January.
In a report, Financial Services and the Treasury Bureau said there was a surplus of HK$86.8bil (RM46.2bil), bringing the cumulative year-to-date surplus up to HK$59bil (RM31bil).
All this wealth belongs to Hong Kong and not mainland China, so a lot can be done with that money for a population of just seven million people, especially low-cost housing!
In comparison, Malaysia’s official reserve assets amounted to US$102.03bil (RM425bil) as at end November 2018, while other foreign currency assets stood at US$51.6mil (RM215mil) for the same period, Bank Negara said. Malaysia has a population of 32 million.
It can’t be denied that Singapore has done well in housing its population, with over 90% of the seven million population reportedly living in homes of their own, and the home-ownership ratio is said to be the world’s highest.
The Singapore Housing Development Board (HDB) deserves global recognition for its feat in solving the housing problem of the people, especially the poor.
The middle-class and poor must be able to have a roof over their heads. That’s an essential human need. No country can have peace and stability if the poor are not able to own a home in their lifetime.
A prosperous and satisfied middle-class will lead to political stability. A huge middle class will also mean greater purchasing power, and this will lead to a better economy with spillover effects for everyone.
When there are angry citizens protesting everything from the escalating food prices to housing, then even the elite (including politicians and businessmen) will not feel safe. In South Africa, the rich live in houses with high walls and electric fences to protect themselves, but that’s not the best way to live. It’s living dangerously.
Malaysian politicians who still wield the race and religion card will realise that at some point, these will be “dead issues”.
With well-documented shrinking numbers, the Chinese and Indian population will no longer be the proverbial bogeymen in the future. Instead, it is class stratification that will be a matter of concern.
Last year, it was reported that the gap in income between the rich, middle class and poor in Malaysia had widened since 2008, according to a study by Khazanah Research Institute (KRI).
In its “The State of Households 2018” report, the research outfit of sovereign wealth fund Khazanah Nasional Bhd noted that the gap in the real average income between the top 20% households (T20) and the middle 40% (M40) and bottom 40% (B40) households had almost doubled, compared to two decades ago.
The report, titled Different Realities, pointed out that while previous economic crises, in 1987 and the 1997/98 Asian Financial Crisis, saw a reduction in the income gap between the T20 and B40/M40, post-2008/09 Global Financial Crisis (GFC), those disparities had not reduced.
But the Gini coefficient, which measures income inequality in the country, had declined from 0.513 in 1970 to 0.399 in 2016, denoting improvement in income inequality in Malaysia over the past 46 years.
Explaining the phenomenon, Allen Ng, who is the lead author of the KRI report, said income of the T20 households had continued to grow, albeit at a slower pace than that of the M40 and B40 since 2010.
“However, because they (the T20) started at a higher base, the income gap between the T20 and M40/B40 had continued to grow despite the fact that the relative (income growth) is actually narrowing post-GFC, ” Ng explained at a press conference after the launch of the report yesterday.
In his bestselling book The Colour Of Inequality: Ethnicity, Class, Income And Wealth In Malaysia (2014), economist Dr Muhammed Abdul Khalid wrote that “the future does not look rosy for Malaysia; the current policies are encouraging wealth disparity between rich and poor, and between ethnicities.
“Unless bold and drastic actions are taken urgently, a harmonious future for Malaysia is uncertain. There must be an urgency to give every Malaysian economic security, a better and sustainable future.”
Muhammed, the managing director of the research and consulting firm DM Analytics Malaysia, said last year that contrary to popular belief, most Chinese (70%) are wage-earners, as are most Malays (72%). In fact, the poverty gap between races has dropped compared to 40 years ago, though the disparity remains.
And what about Malaysia? We have a disastrous, if not scandalous, record, particularly the pathetic business activities, dealings and performance of the 1Malaysia People’s Housing Programme’s (PR1MA) set up to build affordable homes.
More than RM8bil has gone up in smoke because PR1MA’s management failed to meet its targets, despite all the assistance and facilities accorded to their projects by the previous federal government and most state governments.
PR1MA reportedly built only 11,000 homes, compared with its target of half a million residential units to be delivered by the end of 2018. That’s less than 5% of the original plan.
PR1MA Malaysia was set up to plan, develop, construct and maintain high-quality housing with lifestyle concepts for middle-income households in key urban centres. Its homes are priced between RM100,000 and RM400,000.
PR1MA is open to all Malaysians with a monthly household income of RM2,500 to RM15,000.
A total of 1.42 million people registered for PR1MA, a promise of one million homes by 2020, but only 16,682 units, or 1.6%, of the target, were completed between 2013 and 2018, costing the government billions in public funds.
Poor management, exorbitant land acquisition costs and unsuitable sites have turned the people’s housing project into a major financial flop. PR1MA’s failure, which could cost the new government billions, is apparently already saddled with ballooning debts, rendering the loss-making company untenable.
It’s the responsibility of the government to build affordable homes – not the private developers. Private developers, especially those who helm public listed companies, have profits and dividends to answer for to shareholders. They are in the business of making money, and with the expensive land bank they have acquired, they need to build expensive homes, too.
Even if there are requirements with the obligated mixed homes for social housing needs, it still won’t resolve the problems.
Our politicians shouldn’t pass their responsibilities to them. They just need to have qualified and competent professionals with integrity to run a set-up like HDB. Obviously, the people who ran PR1MA didn’t do their jobs. We can help Malaysians own homes, or at least rent them at affordable rates, if we’re truly committed. The question is, are we?
As for Hong Kong, there is another lesson the young protesters need to learn: a full democracy doesn’t guarantee you a home and a decent job. Just ask the homeless in the United States and Britain.
