Factors Of Income Inequality In Malaysia

Any rise in poverty and income inequality defi nitely affect economic growth.

Factors of income inequality in malaysia. The income inequality in malaysia was measured using the gini coefficient with a higher value showing higher inequality in income. The data shows that the average malaysian has a gross wealth of rm226 599 consisting of rm208 504 worth of property assets and rm18 055 in financial assets. Lower inequality a pro poor shift in distribution at a given mean accounted for 25 of the reduction in absolute poverty with growth in mean income accounting for the rest. Prime minister tun dr mahathir mohamad on monday last week said malaysia s wealth must be distributed equally among all races.

Income growth and inequality 2002 2014. In malaysia wealth is dominated by property assets. Any rise in poverty and income inequality definitely affect economic growth. There are many great efforts taken by the government of malaysia to eradicate poverty and to reduce the gap of income inequality which occurs since 1970 s.

By 2014 we see that income inequality in malaysia is much lower than it is in the us and similar to the level in china but still significantly higher than the level in france. When it comes to gross income the income inequality in malaysia went up with the gini coefficient value increasing from 0 399 in 2016 to 0 407 in 2019. Kuala lumpur despite a reduction in official income inequality the absolute earnings gap between malaysia s top 20 per cent and their countrymen has nearly doubled putting more malaysians in. I find that malaysia s success in reducing income inequality played an important role in the country s success at reducing poverty in combination with economic growth.

There are many great efforts taken by the government of malaysia to eradicate poverty and to reduce the gap of income. Increase taxes for the top income brackets the tax rate for the top income bracket in malaysia is low at 25 compared to other asian countries such as korea 38 and thailand 35 increasing this rate of 25 to be more line with other countries would help reduce the income inequality in malaysia.