SPV 2030 to close the wealth gap

PETALING JAYA: Malaysia’s uneven wealth distribution must be addressed, and a new economic policy – the Shared Prosperity Vision (SPV) 2030 – will be launched to remedy this imbalance.

The challenge is to address inequalities between income groups, ethnic, urban and rural communities, and supply chains, government sources said.

SPV 2030 is 10-year plan beginning 2021 that seeks to restructure the economy, bridge the huge disparity between the wealthy and the very poor.

Its main target is to create decent standards of living for all Malaysians, the sources said.

The policy envisions the creation of an entrepreneurial nation where prosperity can be shared in a more just and equitable manner.“There will also be continuous effort to move from a labour-based and low-skilled economy to knowledge and future-based economy,” said the government sources.

The government hopes Malaysia’s experience of sustainable and equitable growth at every level of the value chain – regardless of class, race and geographical location – will lead to a more harmonious nation and a higher sense of stability among the people.

Affirmative action to ensure distribution of wealth benefited some people in the past, but had been clouded by problems from misuse of power, corruption and mismanagement, said the government sources.

In May, Prime Minister Tun Dr Mahathir Mohamad highlighted seven pillars that would be the catalysts for SPV 2030 – better restructuring of business and industrial ecosystem; exploring new growth areas; and reforming talent and human capital.

Others included improving the labour market; strengthening the country’s social well-being, ensuring a fair development of territories and the enhancement of social capital.

Dr Mahathir said the uneven and unfair distribution of wealth needed to be corrected or it could lead to violence, and stressed that there is a great disparity between urban and rural areas, and some states were rich while others were very poor.

“We have problems with the performance of some ethnic groups, for example, the bumiputra, including the bumiputra in Sabah and Sarawak.

“They are rather poor in comparison with the people of other races living elsewhere.

“All these things have been looked at, and we feel that we need to redistribute wealth in a fair way because if there is great disparity, then there will be antagonism and that antagonism may increase over time to a point where it may break out into violence,” he was reported to have said.

While efforts to tackle hardcore poverty will go on, the government sources said there must also be work done to address the plight of vulnerable groups and those who lack retirement savings and financial security.

Various studies have shown that 68% of Malaysians who retired at the age of 55 do not even have at least RM240,000 in their Employees Provident Fund (EPF) account and quite a number of them would only have around RM50,000.

Approximately 70% of those who withdrew their EPF savings would also use up the money within five to 10 years.

Data from the Statistics Department showed that close to five million semi-skilled workers earned an average of RM1,947 monthly, while low-skilled or unskilled workers earned around RM1,531.

Skilled workers, on the other hand, make up more than three million of the workforce, drawing an average monthly salary of RM4,573.

SPV 2030 will be looking at raising the income of the workforce by giving priority to Technical and Vocational Education and Training (TVET) so that the lower-skilled and unskilled workers have a greater capacity to be more efficient and be able to carry out more sophisticated tasks.

Meanwhile, a majority of the national B40 group comprised the bumiputra, representing 71.3% of the low-income group.

It was also discovered that the industries that they are involved in are of the low-value industries. The population of states that are found to be left behind in terms of development are those with mostly bumiputra residents.

In 2018, 40% of the country’s gross domestic product (GDP) came from Kuala Lumpur and Selangor, while Kelantan, Kedah, Pahang, Sarawak and Sabah only accounted for 25% of the country’s GDP, said the government sources.

SPV 2030 will be launched this Saturday.

Source : The Star Online