Rebutting opposition claims about the Economic Transformation Programme, Performance Management and Delivery Unit (Pemandu) today said that millions of Malaysians would be even poorer in its absence.

Speaking to Malaysiakini , Pemandu analyst Marc Fong said that while it is true that some seven million Malaysians would earn around RM1,500 in 2020, the same people would make even less without the ETP.

Quoting from the ETP Roadmap, Fong said its projection is that 2.3 million people will earn under RM1,000 while the income of 4.7 million will be in the RM1,000-2,000 range in 2020.

"I am assuming that this is where (PKR de facto leader) Anwar (Ibrahim) is getting his numbers from.

"What we are saying is that yes, seven million will earn about that much in 2020, but there will be a positive shift in income brackets," Fong said.

According to the roadmap, 600,000 people earning less than RM1000 today will earn more in 2020.

An additional one million will earn RM1,000 to RM2,000 in the year 2020, compared to in 2009, while even more people are projected to earn upwards of RM2,000 which they did not before.

NONE In a statement today, fellow Pemandu analyst Salina Salleh added that Anwar's ( right) claim that the ETP will send an additional 1.7 million Malaysians into poverty in 2020 is "misleading".

"It is not only misleading, but irresponsible to focus on the two lowest income brackets without considering the increases across the board, including the higher income bracket," she added.

Anwar had at a forum last week said that more Malaysians would be poor under the ETP, as the projected income does not take into account annual wage rates and the prevailing inflation.

Pemandu added that it is untrue that the income gap would be wider, as 80 percent of the 3.3 million jobs created under the programme are in the low and middle income brackets, requiring a range of qualifications from unskilled labour to professional degrees.

Inflation projection realistic

According to Salina, ETP's inflation projected remains realistic and is accommodated as its roadmap considers real and not nominal growth.

"The six percent annual growth projected by the ETP required for Malaysia to achieve high income nation is real growth, and excludes the inflation factor.

"This means that we are able to adapt to the inflation rate, whatever it may be at," she said.

She added that the average inflation rate cited in the ETP is not unrealistic, as claimed by Anwar, as it matches Malaysia's average inflation rate of 2.77 percent from 2005 to 2010.

This average, she notes, includes an all time high of 8.5 percent in August 2008 due to high oil prices.

"As at October 2011, inflation is up 3.4 percent year-on-year while for the period of January to October 2011, it is up 3.2 per cent year-on-year.

"Based on historical and current data, an assumption of 2.8 percent inflation over 10 years from 2011 to 2020 is reasonable. ETP targets are definitely still relevant," she said.

The ETP is expected to release a second press statement today to answer Anwar's claims that the annual wage growth projection of 3.6 percent  is overly optimistic.

In a statement on the ETP website, Pemandu also took on Anwar’s contention about wage rate increases, saying that wages will rise as the demand for talent increases alongside economic growth. 

“The Robert Walters Global Salary Survey earlier in the year revealed a projected wage increase of between 5 percent and 30 percent in Malaysia, which it attributes to a combination of inflation and market forces.

“Efforts under the Strategic Reform Initiatives to liberalize business conditions are hoped to allow a follow on effect of increasing competition amongst corporations for talent. Inevitably, increasing wages will be a key facet in retaining experienced staff,” it said.

Anwar had said that the 3.6 percent annual wage growth predicted from 2010 to 2020 is too optimistic given that the Human Resources Ministry’s data show that average growth in wages over the past 10 years was only 2.6 percent.

The politician also said that real wage growth from 1984 to 1997 in the manufacturing and plantation sectors was only 2.3 and 2.8 percent respectively according to the Asian Development Bank.