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LETTER | In an letter published recently, retired engineer and investor Koon Yew Yin claimed that the state of Perak has been regressing under the present BN leadership, currently at the helm of Zambry Abdul Kadir since 2009.

Being a staunch supporter of DAP, Koon contended that Perak is bound to fall into the hands of Pakatan Harapan in the 14th general election. After discussing the previous GE13 results, he went on to show how with a simple additional five percent of extra votes, the state can be wrested from the BN, irrespective of whatever gerrymandering BN might try to do.

To support this claim he went on to provide some statistics on the economic performance of the state, claiming that the state’s socioeconomic conditions have gone from bad to worse. Being a layman economist I intend to neither support nor dispute his political analysis, but I disagree with the economic analysis provided therein.

Firstly, he writes that a Khazanah Research Institute report says that Perak is the second poorest state after Kelantan. Actually, the KRI report has already been clarified many times before, but it is surprising that the learned and successful businessperson still quoting and harping on this. I take this as a sign that the election is close.

The data in question here refers to a chart that appeared in the KRI report, “The Status of Households II.” It shows the percentage of households earning less than RM6,000 per month in 2014.

RM6,000 is about the average monthly income for Malaysia as a whole in 2014, and 81.1 percent of Perak households are reported to be receiving less than that figure, which makes it the number two “poorest” state in Malaysia.

But notice from the chart that only three places, i.e., Selangor, Kuala Lumpur and Putrajaya, have an average monthly income higher than RM6,000. Hence not only Perak, but more than 80 percent of the states in Malaysia have mean monthly household income below the national average.

This simply shows that the distribution of income in Malaysia is skewed, as is the case in most countries. This is caused by the income of few very wealthy people, probably like Koon himself, that pulls the average much higher up than what the majority earns. Therefore, the mean income statistics is not a reliable statistics for comparison purposes.

For this reason, i.e., for comparison of income distribution purposes, the median income is normally used. The median income is the income where 50 percent of the population earns below it and 50 percent above it.

The KRI report also provides the median monthly income data, where one could see that the state of Perak’s median monthly income is closest to the overall Malaysian median income. This means that the Perak households are faring just like how the average Malaysian households are faring, as far as the median income is concerned.

In other words, if one were to travel to Perak, one would see the average Malaysia and not the second poorest state in the country.

In fact, both the mean and median household income of Perakians have been rising for many years in a row. From 2014 to 2016, Perak has outperformed Malaysia as a whole. While most economists talk about distribution of income and wealth, Zambry (photo) frequently talks about the distribution of economic development and pays special attention to the development of rural areas and small towns.

Hence, in the same period (2014 to 2016) the median income of rural households increased 7.7 percent, again better than the Malaysian average. Inclusiveness is indeed a priority, such that the Gini coefficient, which measures income distribution gap, showed a reduction from 0.366 in 2014 to 0.362 in 2016. In 2009, the figure was 0.40.

Koon also states that “…according to the 10th Malaysia Plan, Perak is now the state with most number of poor families.” This is not true, even though the data in the 10th Malaysia plan are already old.

In 2009, Perak depicted a 3.5 percent incidence of poverty, down from 4.9 percent in 2004. What Koon fails to show is that since Zambry’s ascension as the chief minister of Perak in 2009, the incidence of poverty in Perak has fallen to 0.7 percent in 2014 and to a further all-time low of only 0.2 percent in 2016 (data by Department of Statistics).

To realise such economic aspirations Zambry established the Institut Darul Ridzuan (IDR) to play the role as a public policy think-tank for the state government. It brings together academic researchers, social entrepreneurs, government agencies and the private sector to propel Perak into a dynamic, high-achieving, sustainable economy.

Admittedly, however, there is a net out migration from Perak. This can be seen from the location of Perak that is close to the capital of Malaysia, Kuala Lumpur, which is only about two-hour drive to the south of Ipoh.

Hence, people finding better opportunities in the capital of a country is not uncommon. But all these are changing under the present leadership and Perak is well on its way to compete with its neighbours, particularly Selangor and Penang, in terms of socioeconomic development.

Koon being a retired engineer and a highly successful investor must necessarily be savvy with numbers and surely can see the merits in the above statistics.

However, I certainly agree with him that all government administrations, both state and federal, should increase their transparency and accountability. I would even support the use of blockchain technology to enhance these two aspects in the administration of governance. Dubai has indeed taken its first step to do this and perhaps Malaysia can emulate that. Zambry should take heed of this even though he has placed SPRM officers within the state machinery to counter corruption and increase transparency.

However, Koon’s “accusation” that Perak Menteri Besar Incorporated (MB Inc) has failed to table its audited accounts in the state assembly for more than five years since 2012, is uncalled for. This is because neither Perak MB Inc nor the MB Inc of other states are required to do so in the first place.

The MB Inc, just like any other corporation, only needs to have its accounts professionally audited and be subjected to corporate compliance requirements.

Accordingly, other states too do not require their MB Incs to table their audited accounts in their respective state assemblies, including the opposition states of Penang and Selangor. Anyone who wishes to take a look at the accounts of these MB Incs could always get them from Suruhanjaya Syarikat Malaysia (SSM).

With all the above, it is not surprising to see the appearance of counter articles to that of Koon’s. One such article quotes a DAP national leader on Harapan’s chances of winning Perak in GE14 as saying “… it is even lower than 2013 when the Opposition form was at its peak.” That makes sense, doesn't it?


The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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