LETTER | Reform economic system for all to benefit

LETTER | Malaysia’s existing economic system prioritises the wants and greed of the elite class more than the needs and well-being of the average citizen. This elite class consists of tycoons, rich businesspeople, developers, certain politicians as well as big foreign investors.

As a result, most of the country’s generated wealth goes to this small elite class, whereas only a small percentage of the wealth is distributed to the majority of the population.

This type of economic system isn’t sustainable in the long term because sooner or later, the average population will be faced with such overwhelming socio-economic burdens and hardship that they decide to rebel against the government.

To ensure the long-term stability of the ruling administration as well as the well-being of the general population, essentially the population’s socioeconomic status (especially the B40 category) needs to be given government priority and protection.

However, the government first must get sufficient financial resources to improve the quality of people’s lives.

Some of the steps the government needs to take to achieve this objective include:

1. Making an agreement with Asean countries to collectively and gradually raise taxes towards foreign investors as well as raise the minimum wage in those countries. These collective actions will prevent the withdrawal of foreign investors and their assets out of Malaysia to invest in neighbouring countries because all Asean members would have implemented the same actions.

2. Reaching an Asean deal for member nations to collectively and gradually raise taxes towards the elite class as well as amend and enforce firm laws that block anyone (especially the elites) from avoiding taxes in those countries. These collective actions will prevent the elites from leaving Malaysia and then residing in neighbouring countries to avoid paying their due taxes as all of Asean would be implementing the same actions.

3. Strictly ensuring that every single person in the elite class pays their due taxes based on their generated income and does not hide their taxable wealth or income in tax havens.

4. Using the debt monetisation strategy, whereby government securities are sold to our own central bank at a very low interest rate, such as 0.1 percent. Essentially, the government borrows from the central bank. This strategy would give the government the funds it needs without saddling itself with a huge debt servicing burden.

With the acquisition of funds from the implementation of the above steps, the government can take action to improve people’s socioeconomic statuses, especially the B40.

Some actions the government needs to take to improve people’s socioeconomic statuses include:

• Subsidising the costs of oil, gas and raw materials

• Building low-cost houses for the B40 and lower M40

• Amending laws to control the costs of essential services and necessities including education, medical treatment, housing and cars so people can afford them

• Increasing the minimum wage to a higher and fairer level

• Providing more job opportunities with an emphasis on hiring the local workforce, and not foreign workers, to reduce the unemployment rate, especially among the youth

• Implementing an old-age pension scheme for the elderly sufficient in supporting them as well as their families

Only when a country’s wealth is distributed fairly and equally to the general population, and not just accumulated in the hands of the small elite class, can a nation truly achieve long-lasting progress and prosperity.

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