Malaysia may be aiming to become a high-income nation, but ironically the portion of Malaysia’s economy that is going into worker’s wages is set to decline over the next few years.

Interest group BlindSpot cofounder Azlan Awang ( below ) said this is based on the figures from the Performance Management and Delivery Unit’s (Pemandu) projections for the year 2020.

He said based on the figures, only 21 percent of Malaysia’s gross national income (GNI) is projected to be going into wages, compared to 74 percent for business profits.

In contrast, he said the wage share of gross domestic product (GDP) was 33 percent in 2011, based on Khazanah Research Institute, which implies the wage share would shrink by 2020.

“Maybe it was an oversight. So we actually went to see (the Pemandu CEO) on this matter and asked him about this: Why 21 percent? You are regressing’. And he replied, ‘Oh, really?”

“So can you imagine a high-income nation - (where) everybody gets a high income - and the thing that they didn’t plan for was the wages?” he told a forum organised by the Malaysian Left Coalition today.

The two-day forum held at Malaysiakini’s auditorium starting this morning was organised in the run up to the launch of the 11th Malaysia Plan, which is slated for the next parliamentary sitting beginning May 18.

As for the 21 percent figure, Azlan said it was calculated from Pemandu’s projections on the growth of the 12 National Key Economic Areas (NKEA) identified by Pemandu, and its estimates on the wages of the jobs created in those sectors.

The NKEAs include the oil, gas, and energy sector, the financial services sector, and the palm oil sector, among others, which Pemandu predicts would boost Malaysia’s GNI by RM800 billion.

This is expected to create 3.3 million jobs, it said, with 49 percent of it being medium income jobs (RM2,001 to RM7,000 per month) and 15 percent being high income jobs (RM7,001 per month and above).

'M'sian companies higher nett profit after tax'

When approached later at the sidelines of the forum, Azlan said the meeting with Idris took place at around 2011, while the DAP-linked thinktank Research for Social Advancement (Refsa) had questioned Idris on the issue of wage share as well.

He claimed that there had been no response from Pemandu.

“They can’t answer, it’s already in the document (Economic Transformation Program roadmap). It is an oversight on their part.

“It just shows that they were talking about a high-income nation, but it’s not for the rakyat. It is for the capital economy,” he said.

Meanwhile, earlier during the presentation, Azlan said companies in Malaysia also have a higher nett profit after taxes than their counterparts in the US – around 20 percent of GDP, compared to 9.5 percent in the US.

“In Malaysia, we have allowed by not introducing a more progressive tax et al, (because) the capital economy is so dear to us, so they made a profit of up to 21 percent (of GDP).

“So it confirms the sort of direction that we are moving towards,” he said.