This article first appeared in The Edge Malaysia Weekly on October 22, 2018 - October 28, 2018

Last week, debt pressures drove an elderly couple and their daughter to take their own lives in Sungai Arau, Perlis. The couple’s adult son, who changed his mind after jumping into a river with his family, survived and is now in police custody.

It is another worrying sign of the growing economic imbalance for Malaysians on the ground. The State of Households 2018 report by Khazanah Research Institute, released last week, provides more clarity on the diverse economic realities for Malaysian households.

While much of the data is from 2016, the findings are timely reminders on the importance of ensuring headline economic growth filters down to the rakyat.  Among others, the actual income gap between the rich and the poor has nearly doubled over the past two decades, despite the Gini coefficient, which measures inequality, falling.

Alarmingly, B40 households earning RM2,000 monthly or less exhaust nearly all their income — about 95% — on basic necessities, leaving little for savings. In fact, poorer households borrow money for lifestyle purposes. Over 50% of all debt for households earning RM5,000 or less are for vehicle and personal loans.

The report highlighted that human capital is the most important equaliser for income levels and if the quality of education is not addressed, Malaysia will not be able to solve the inequality problem.

It is crucial to have decisive policies and action to arrest the alarming trajectory evidenced by the available data. While that will not be easy, it is imperative that the government makes it a top priority.  Otherwise, achieving high-income status by 2024 may be an empty proclamation that means nothing to the least well off among the population.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.