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He most probably is reffering to the purchasing power parity.

Which if he is, is definitely pretty close.

Maybe, they only count cronies and supporters. Others, people like the marginalized Indians, Kelantan, other poor Mlaysian not taken into consideration.

In fact, every people I talk to says business is tough nowdays except those with political connections seem to be growing.

I am really confused. Is the economy is growing or shrinking? New houses worth 500k upwards all snapped up, wonder who got so much of money?. Me wonder whether I am useless for I am still stuck with old car and house with loans still to go.

I think the [ DELETED - Derogatory ] FM forgot about the reduction of our purchasing power with ever increasing toll charges, utilities, petrol etc ever since this PM "tricked" us in voting him in.And a thick skinned one when he said he worked hard while the evidence and photos showed otherwise. If he considered that he worked hard , all the other rakyat worked damn bloody hard!

Jeff,

I couldn't believe the star is willing to carry this article without and checks or questioning the facts. Most of us do not feel that our income has gone up 40%.

But it can be true and the only way to be true is that the rich has become very much richer and the poor either the same or poorer thus the increase in average per capita due to the rich people in malaysia!! Malaysia's gap among rich and poor getting bigger thus the rich do not see increase in prices etc as an issue cos they are insulated.

haha... maybe he is computing using USD amount convert to RM in 2004 to compare with the one in 2007 to derive the total nominal GDP and only then divide over the population. This would be consistent with the way our government attempt to project themselves in good light. Nevermind the self denial they dictate i.e. compare with RM to USD conversion of 2.5 during the heydays after the 97/98 crisis to determine the GPD per capita then for "consistency in comparison". Now with the RM appreciated, it is only "right" to compare using the latest currency conversion rate.

Anyone who studied economics 101 would tell you that this is nonsensical methodology.

wooo.. knew sumthing was wrong sumwhere with such a high figure he gave..

they are just fooling the people!

Really a bloody stupid guy. I have to make many adjustments to my expenses. Maybe he was referring only to the Malays. This group of people are really well-off. Driving big cars, buying houses 5% cheaper than us, getting fed with contracts, etc etc.

Interesting government figure on 40% increase in per capita income. The math seems to be a bit shaky. First, maybe looking at outside statistics would help: the UN reports Per Capita GDP for Malaysia from 2002 through 2006 as follows:



Year Per | Capita GDP (USD) | Growth Rate


2002 | $3,927 | 4.4%


2003 | $4,204 | 5.4%


2004 | $4,702 | 7.3%


2005 | $5,098 | 5.2%


2006 | $5,704 | 5.9%


Source: http://unstats.un.org/unsd/snaama/resultsCountry.asp?Country=458&SLevel=0&Year=0&x=48&y=9&Selection=country


Since Malaysia's chief sources of income are natural resources (Oil/Natural Gas, Agricultural Products, Timber) as well as exports, the actual amount of GDP which is put back in the hands of people is proportionally less than a more service and technology-based economy. For example, ask yourself this question: "How many RM went into my pocket from Petronas last year?". Of course, the income from natural resources is used to build a country and to develop infrastructure, but that does not translate directly to increased per capita income. Additionally, Malaysia still has a large percentage of the population NOT living in urban areas (KL/KK/KUC). As such, a more important figure to examine is the per capita income distribution. While I have not seen these figures for Malaysia, I expect that the distribution of GDP is skewed higher to urban dwellers.


Probably the most important figure to consider is "asking every-day people"..."how much more do you have in your pocket compared to three years ago". If the "powers that be" asked that, they may get a more realistic measure of per capita income...or at least public sentiment.


PS: The government figures quoted from the Malaysia Government in this blog do not include Q4 2007. Eventhough it was an estimate, before a 40% proclamation is made, one should have the exact figures.

It's possible because of the strengthening of the ringgit over the
years, the bull run of the stock exchange, increase in civil servants
pay and factors below.

To illustrate, lets say your pay is RM 3800 per month 4 years ago, which
is 1000USD.
4 years down, your pay is now RM4619. (This is Rm3800*1.05 for first
year increment, *1.05 for 2nd.. 4th year)

Now, rather than 3800 is 1000 USD, currently it is 3300, a strengthening
of 13.15%.
In essence a malaysian who was earning 3800 4 years ago only needs to
earn 3300 now for 1000USD.

4 years ago the exchange rate is USD1 = RM3.8
4 years down the road,i.e. now USD1= RM3.3.

So, today's pay of of 4619 in USD is:

4619/ 3.3 = USD 1399 i.e. an increase of +- 40%

However, the above factor does not take the factor of inflation (CPI-
consumer price index, which means the 40% paper increase might actually
be less in value than the 1000USD 4 years ago)

The capita income is done in the above way for differing reasons. In
1997, the per capita income dropped, but a man earning RM 1500 per month
was still earning RM1500 per month, but how did the per capita income
drop? At that time his salary was US 600 ( USD1=RM2.5), has now suddenly
dropped to USD 333.33 (USD1= RM4.5) after market crash.
I cant recall the exact figure, but the per capita income for Malaysia
dropped from 5000USD to 3000USD overnite.

I'm not a BN supporter, but I think this is not basic maths.
I'll support opposition all the way this time, but sadly, what Nor
Yaakop said is technically/ possibly true due to international finance
factors.
I might be wrong, so if I am, hope the better learned can correct me.

Unfortunately, majority of Malaysians don't even grasp the concept of GDP, growth rate, inflation rate and blatant lies. Our official statistics are hardly trustworthy - 2.5% inflation rate? how the hell they come up with that number? The bank negara never publishes its reports/results/methodology....i wonder why we bother coming up with it in the first place.

Maybe he was adding the maths of 18% GDP growth from the past 4 years with 16% appreciation of the RM against the USD, which equates to 34%, then round it up to 40% just to make it look nice for the GE.

I feel so mad and sad at the same time, Jeff.

How could this people lie so blatantly and expect to get away with it?

Can they be sue for:

1: misrepresentation in their official capacity to the people

2: their stupidity

A:'i can agree to Nor.'

Neil: 'you can?'

A:'yes, of course i can; he can't be stretching the truth too far if, for instance, the umno youth chief of a seaport branch can afford to dole out RM40,000 per month in free nasi lemak, fried beehoon and teh tarik for his machai's. Word has it he just pulls out wads amounting to one K at each warung. If such a fella can afford to probono feed the clueless and the sycophants, it can only mean we are all doing damn well, aren't we?'

Neil:'unless of course the per capita figure has been blown up because the total population has actually shrunk by emigration, you know, more people leaving than the last batch of numbers tripped up by those home ministry people.'

A:'i think what you say makes more sense; good people have left this country and i should soon be doing so too, looking at the crap going on; look at the two prime court cases - one seems to be grinding down to a morass, the other seems to be a fest of judges and lawyers falling on each other like hyenas fighting over titles and promotions. Hypocrites, all, don't you think too?'

Neil:'i'm too worn out to think about anything now, A. Are you really going?'

A:'yes, our bags are packed and we're shipping out. i don't have anything to tie us back. The diaspora is reintegrating elsewhere.'

Neil:'that's sad; what about those who're staying behind, digging in, nowhere to go?'

A:'they should abandon birth control and start producing like rabbits in this year of the rat.'

Neil:'you think that will work?'

A:'if they start now, they will have the time of just four GE's to create some demographic pressure and become less a minority, you know, bring back this country from its brink of rampant insanity.'

Neil:'but that will increase the very problem we're having now.'

A:'how so?'

Neil:'it increases the pressure to retain quotas since umno's only modus operandi is zero-sum games - more for you means less for us, that sort of thing.'

A:'you know, Neil, the one big question no one has ever asked about this whole shebang thing about elections and politics and the politicisation of Malaysia?'

Neil:'i am still thinking over what was heard - someone actually proposed to pay for the lifetime RM10/- membership fee for everyone so long as the new voters support him...'

A:'and that, Neil, leads to what i was about to say. The biggest unsung question is this:

why would anyone in this country sell his soul for so much money in order to buy votes in order to get to position that he also stakes as being of "service to country and community"?

Remember what the chief-sec of the civil service was quoted as saying? That if one wants to work for money, the civil service is not the place to be. I am thinking what's the difference between what a politician is supposed to do in politics from what he's supposed to do in the civil service.

If you don't go into the civil service for money, what do you go into politics for?

Neil, long ago it was for service to country and community. Now, i am sure that's the lowest of their considerations. Look at what Raja Petra had written about the FT minister and so on. Remember the AG's reports. Think about the Hindraf people, the scholars without places, the sons and daughters of the connected studying for free in the best overseas. And the thousands of other things they're trying damn hard these few weeks to make sure we all forget.

Politics has become the gravy train to instant wealth and power for those rejects and dropouts from the integrity assembly line of this nation.

Do you know what riles me?'

Neil:'could it be the traffic jam at senawang today? an accident had happened you were told on your car radio and you see ahead the most humungous jam on the highly-tolled highway, bumper to bumper, inching all the way in the heat of the day. You've seen all this before for years. Years. Then you find out the causes. Traffic police standing on the emergency lane. A dented car by the side elsewhere. As with everything in this country, people don't use their brains. A traffic jam is caused by the accumulation of slowing down of a line of vehicles. As one slows, the one behind slows more, and so on. The first slowed because of the policemen; the second slowed even more because the driver saw a dented car by the roadside. No highway official was in sight to work this out in his head and conclude that the policemen and the sight of the abandoned car ARE the causes of the elephantine jam. It's not about heavy traffic. It's about distractions. Thousands of ringgit of fuel burnt in minutes to no cause. Time wasted, people suffer, all because the malaysian way of doing things is to send the brain on holiday too. The kpi for those fat cats is simple: no policeman unless to clear an accident, and the car off the thoroughfare and canopied within five minutes of the collision. Which means highway tricycles, not cars, carrying the canopies and camera.'

A:'Nice try, Neil. No, i've long gone past third world mentalities. I am just thinking some of the stupid things that come out of the mouths of our politicians and the juvenile insensate ideas from their relatives.'

Neil:'Oh, you mean the emperor's new clothes?'

A:'i also mean we should all be working hard. Pumpingly hard. Like suddenly spinning out there are seven issues affecting our indian brothers. WTF! You mean after fifty fkg years of independence and sacrifice, it suddenly dawns on umno the clueless that the co-citizens and joint-builders of this nation have seven issues? Why so few, if i may be so sarcastic to say? How many have died, gone behind bars, marginalized? Do you know what they're actually admitting? That they have only cared for one race despite holding all the big posts that are supposed to work for all the communities. Add that revelation to what i've asked before about why they would spend so much to win votes and you get the friggin' truth - they're working for their own power base and personal careers. It's malignant neglect.'

Neil: 'go on.'

A:'Will you ever hear a LKY try to curry sympathy from his voters by saying he works hard? Will you ever get a journalist stand up to ask him how hard he was working in perth when johor drowned? Will you see him upbraid his own party members directly and clearly when they make racist remarks and sexist innuendoes? Will you instead see the foresight and not the rodent-scurrying antics of the self-excusing after-sight exercises they've become so casually good at these days? Like the traffic jams on highly tolled roads you suffer from, Umno is only good for excuses. They take your money, buy breakfast for their machai's, screw you with overpriced hyper-hyped development for their cronies, and then ask you to vote for them again so that they can deliver the next encore. Don't loosen any of your screws thinking about this, you can't afford those screwdrivers.'

Neil:'wah, you're really getting hot, A.'

A:' Neil, where's your perception? Worse will not happen before the election. Their media will make sure of it - smoothen things out like the way this Nor is making the economics nobel prize statement of the century. Worse will happen AFTER the election. Remember, they have no answer for 2010 when we become net oil importer. Meanwhile, the duck said our competitiveness has increased. That's smashing news, i say, as i get into the latest proton saga and try to be ginger with the flimsiest looking door handle ever assembled in automotive history. Of the world.

Neil, when idiots and sycophants pander to the clueless lowest tanpa cengkeram denominator, you will get a country which will forever stay third world. Competitiveness, my foot. A Pavilion here, a corridor there doesn't make for competitiveness. Pawning off university land for highclass condos doesn't make for competitiveness. Building the next marina for tourists who won't come for their second-homes in a crime-infested, cxxked up judiciary place won't make for competitiveness. You will only get real competitiveness from world-beating clean and far-sighted governance supporting a progressive and advanced manpower ever ready to go the next mile to achieve the highest scores in all fields. Damnit, it's not about winning a race in long pants. It's about winning it in aerodynamically designed short pants.

And when the MB of a state says the only revenue activity of his state makes RM14 million last year from hotel collections, hooha for the state of our nation.

Neil, they all try to hide the truth. And you know what's really sad? we can all look up to the sky and sigh, because they are going to get away with it.'

Neil:'not if every intelligent and concerned man, woman and child go back home and to their workplace before the elections and raise hell. Go the Obama way - make waves for CHANGE. Whittle down the barisan majority so that they will for the next five years really wake up to the deathcall on this country. Everyone's affected, even their own.'

A:'yes, Neil; including that poor malay girl selling coconut for RM2 a piece in Kg Ara. You should see her try to prise it open for her customers. Do the Najib's, Khairy's and Zulkanain's of this land know anything about real suffering?'

Neil:'they've already dropped their last toys; the astronauts.'

A:'they have short memories, shorter attention spans, but extremely expensive tastes. In our parlance, they're just hollow holey barrels.'

Neil:'are they going to run this country into the ground, A?'

A:'Neil, there's no other way you can rephrase that question. Yes is the answer.They haven't a real shred of credibility in them. Tragically, while the whole world knows, the very people who will suffer for it, those kampung folks, won't.'

Neil:'our epithet, then?'

A:'i just need to tidy up a few things, then we will fade away. Please don't ask us to repeat all the sacrifices, suffering and taxpaying services to this country anymore. Enough past generations have gone. We should too.'

Neil:'i don't know what to say anymore, A.'

A:' Simple. If you're going to live for nothing, better die for something. I am sure you are dying to meet her again.'

Neil: 'huh?'

If that is RM 22,000 a year, that is horribly low! The MINIMUM WAGE in NZ is $20,000, that is what students earned in part time work in supermarket! Average wages are about $30,000 to 35,000. Dollar for dollar NZ dollar have more BUYING POWER than what average Malaysian earned in their own country. :( :( :(

I think 40% aint to far fethced. Look at the number of new Millionaires the govt has created via their crony policies and blatant plundering of rakyat's money to enrich a selected few. These are the ppl that pushes our per capita income up.

The problem with linking the Malaysian GDP/Per Capita income figures with the USD Exchange Rate is that it presents a false picture of what is actually going on.

Although the US and Malaysia are strong trading partners, anyone could pick a currency which the Ringgit has appreciated against and then quote GDP figures. By doing so, anyone can find a preferable currency and probably show Per Capita income growth of more than 100%. The government should compare RM to RM to indicate per capita growth. That is why the 40% is inaccurate.

Compare the GDP against the BHAT and you will get a different number, or against the Peso or SGD and even more results. More importantly, Emil pointed out that other factors (inflation, CPI, etc.) have to be considered. Let me point out an example: figures from the US show a positive Per Capita income year or year for quite some years. Thats good news right? Well...not exactly, the REAL or EFFECTIVE money in the pocket of Americans is called their "Take Home Pay" which is calculated after inflation, taxes, etc. Interestingly, the average American has a slightly negative growth in Take Home Pay since 2000. So even though your salary goes up, it is offset by inflation, taxes, government spending, etc. This is really the figure which Malaysia (or any country) should be looking at; its more revealing of what is being filtered to the people.

So, although 40% may sound good (and unrealistic) the amount you effectively have in your pocket is what matters.

Well written Nail!. Like John J.Rambo say, life for nothing, die for something!

/// I might be wrong, so if I am, hope the better learned can correct me.///

Emil Dada - you are wrong. All the GDP figures quoted by Tony Pua are in Ringgits and at constant prices. I have answered a guy by the name of "fearless" in Malaysia Today. Here is my reply to him:

* * *

fearless, Tony Pua is an economist from Oxford - he knows what he is talking about.

/// You have to use compounded GDP growth rather than simple addition for three consecutive years. ///

He had used compound growth - 5.0%, 5.9% and 6.0% - which is why he said it should be 17.9% for the 3 years. (1.05 1.059*1.06=1.178667) If you use simple addition, it would be even lower at 16.9%.

/// But I guess the total GDP growth is still lower than 25%. ///

It is exactly 17.8667% from 2004 to 2007. And certainly not higher than 40%.

/// It's still a possibibity to have 40% income per capita growth in ringgit sense if both ringgit appreaciation and compounded growth are considered. ///

The GDP figures are all in ringgit, so ringgit appreciation is not a factor. Compound growth is considered. The result is 17.9%. With population growth, the per capita GDP growth should be lower than 17.9%. I think we can all assume that the population of Malaysia is higher in 2007 than in 2004, unless there has been many citizens blown up by C4 without our knowledge, or a lot illegals being deported. (Scratch the last bit, as the illegals are not part of official statistics in the first place.)

/// Let use the correct method first before laughing at someone arithmetic skill. ///

Tony Pua used the correct method. Not sure about the Second Finance Minister. I am even more unsure about whether you know what you are talking about.

Who is laughing now?

yes. Oil price is up, Tin price is up, Rubber price is up, palm oil price is up and Ringgit have been appreciated quite a bit since 2006.

But majority of these effect is fluctuating....how long can we enjoy this? If the price of all this comodity drop? We are back to square one because our manufacturing data seem to show a slow down in growth rate.

sorry...i don't get expert advice...I just use basic common sense. So correct me if I am wrong but I don't see all this GDP growth worth celebration. Of course it seem like a retaliation by the gov on critics which compare Malaysia GDP with South Korea's. But then South Korea's GDP seem to be driven by

1. Samsung/ Hyundai/ LG growth in their market globally.
2. Tourism...look at the ammount of promotion of Korea being a tourist destination for east asia society
3. export of their entertainment industry which could in a short time on par with India and Japan. (or maybe they are stronger now)

Korea is a country without much natural resources particularly Tin/ Oil/ Rubber which is much needed by their manufacturing industry. But they have long over take us in GDP.