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| Malaysia's non-trickling down economy Posted: 09 Oct 2013 01:04 PM PDT
Polarisation on the ethno-religious line is no longer the only dividing trench among Malaysia's diverse population. The economic divide is splitting the population apart too. Some would simplify it into the urban-rural divide after the rather divisive election results, but as the population of the urban poor expands, being urban in the future will no longer come with the crown of wealth and sophistication the word usually implies. Nicholas Chan, fz.com AS an non-economist, or as the euphemism would suggest, the layman economist, any attempts to discuss about the subject, especially in front of a learned audience, is bound to be turned into a self-shaming exercise. For example, I find myself to be quite fond of the term "trickle-down economics" and have been delightfully using it to describe the sort of economy I think Malaysia would be fit for. A social market economy that is bottom-up (which means a larger consumer and tax base), slightly leftist but with a penchant for innovation and other market factors. It is only until much later that I found out (in horror) that the term "trickle-down economics" is far from the utopian connotations I ascribed it with. The original idea of the term that is constantly associated with the neo-conservatives is that by giving tax breaks or other economic benefits to the rich – businesses, entrepreneurs and investors, these capitalists will be encourage to increase their investment and productivity in the market, and thus benefiting the largesse through secondary effects (the trickle down), or simply said, the expanded economic pie. It might sound good in writing but the 2008 financial crisis has since shone the word in a rather pejorative and ironic light. The Americans, or I would argue, the world has slowly come to the realisation that even when the economic pie is expanded significantly, the trickle is just too little for the lower masses to even taste a drip. The Occupied Movement is the epitome of this, arguing the perceived injustice of America's 1% holding more than 30% of the nation's wealth while the 20% holds more than 85% of it. The financialisation (I am not sure if this is a new term, but I swear I have read it in TIME magazine) of the US economy has been proven to be a tumour to the economy as banks have grown to be "too big to fail", while Wall Street's huge grapple over the economic does not help in the nation's recuperation process. It simply does not generate as much jobs as the nation needs, when it is struggling to cope with an 8.0% unemployment rate (it was maintained at 5-6% pre-2008). Read more at: http://www.fz.com/content/malaysias-non-trickling-down-economy |
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