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    01KHAZANAH RESEARCH INSTITUTE

    THE STATEOF HOUSEHOLDS

    NOVEMBER

    2014

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    02 KHAZANAH RESEARCH INSTITUTE

    2014 Khazanah Research Institute

    November 2014

    Perpustakaan Negara Malaysia Cataloguing-in-Publication Data

    The state of households. Kuala Lumpur, Malaysia:

    Khazanah Research Institute

    1. Public policy Malaysia. 2. Income distribution Malaysia.

    3. Affordable housing Malaysia. 4. Equality. 5. Trade. 6. Investment.

    I. Title: The state of households. II. Khazanah Research Institute.

    ISBN 978-967-12929

    This work is available under the Creative Commons Attribution 3.0 Unported license (CC

    BY3.0) http://creativecommons.org/licenses/by/3.0/. Under the Creative Commons

    Attribution license, you are free to copy, distribute, transmit, and adapt this work,

    including for commercial purposes, under the following attributions:

    Attribution Please cite the work as follows: Khazanah Research Institute. 2014. The

    State of Households. Kuala Lumpur: Khazanah Research Institute. License: Creative

    Commons Attribution CC BY 3.0.

    Translations If you create a translation of this work, please add the followingdisclaimer along with the attribution: This translation was not created by Khazanah

    Research Institute and should not be considered an oficial Khazanah Research Institute

    translation. Khazanah Research Institute shall not be liable for any content or error in

    this translation.

    All queries on rights and licenses should be addressed to

    Chief Operating Oficers Ofice

    Khazanah Research Institute

    Level 25, Mercu UEM

    Jalan Stesen Sentral 5Kuala Lumpur Sentral

    50470 Kuala Lumpur

    Malaysia

    Fax: +603 2265 0088; email: [email protected]

    Publication orders may be placed through our website www.KRInstitute.org

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    03KHAZANAH RESEARCH INSTITUTE

    Our website (www.KRInstitute.org) has interactive versions of

    all the charts in this report, where the underlying data can also be

    downloaded. If you are reading this on the PDF version, the charts link

    directly to our website.

    CONTENTS

    ABBREVIATIONS

    INTRODUCTION

    The state of households 01

    The Malaysian workforce 01

    Trade and investment 01

    policies

    SECTION 01

    SECTION

    THE STATE OF HOUSEHOLDS

    The state of households 03Its all about the households 03

    About households 07

    Rich and poor states 08

    GDP is not household income 09

    Deprived households 11

    The states of the north: 12

    Perlis, Kedah, Kelantan

    and TerengganuThere is an ethnic, 13

    urban-rural and gender divide

    Unequal household incomes 14

    Household expenditure 17

    Unequal spending 17

    Unequal food 18

    The price of food 20

    02

    - i -

    Housing and debt 22

    Affordable housing should 22

    cost 3x annual median income

    Low income households, 24

    high levels of consumerismThe scourge of 25

    ansuran mudah

    Household debt reform 27

    Inequality 28

    Wealth inequality 28

    We have been improving 30

    income distribution

    Perception and reality 30Inequality matters 32

    Market and net inequality 32

    Subsidies and cash transfers 34

    Tackling net inequality 34

    Cash transfers are not new 35

    Corporate welfare 37

    Reforming the fuel subsidy 39

    system

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    04 KHAZANAH RESEARCH INSTITUTE

    SECTION

    TRADE AND INVESTMENTPOLICIES

    Promoting the right 53investments

    Its the value-added 54

    The losers from free trade 54

    RCEP 55

    Does the government 56know best? Does business?

    04

    CONCLUSIONS ANDPRELIMINARY POLICYRECOMMENDATIONS

    Conclusions 59

    Preliminary policy 60recommendations

    SECTION

    05

    SOURCES ANDREFERENCES

    APPENDIX

    IMF redistribution 62

    policy options

    63

    - ii -

    CONTENTS

    SECTION

    THE MALAYSIAN WORKFORCE

    Low pay, high proits 42

    Our workforce 43

    How educated are 45our workers?

    Unemployed graduates 46

    Our economy needs 47migrant workers

    1 in 6 children do not 48

    get to Form 4 Low wage equilibrium 51

    03

    CHARTS

    1 Growth of Malaysian 03

    Nominal GDP and GDPper person 1980-2013

    2 Annualised Nominal 04 Growth Rates 1995-2012 (percentage)

    3 Average and Median 04 Monthly Household Income 1995-2012 (RM)

    4a Growth of GDP per person 05 and Nominal Average

    Household Income1979-2012

    4b Growth of Real 05 Household Income and

    Real GDP per person1995-2012

    5 Population of Malaysia 07 by State in 2010 (m)

    5a Persons per Household 07

    5b Ethnicity of 07 Household Head

    5c Gender of 07 Household Head

    5d Location of Household 07

    6 Nominal GDP per person 08 in 2012 (USD)

    7 Nominal GDP by Malaysian 09 States in 2012 (RM b)

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    05KHAZANAH RESEARCH INSTITUTE- iii -

    CHARTS

    8 Median and Average 10 Monthly Household

    Income and GDP perHousehold per Month

    in 2012 (RM)

    9a Percentage of Households 11 that have Electricity,

    Schools and Public Health in 2012

    9b Percentage of Rural and 11 Urban Households that

    have Pipe Water andTandas Curah in 2012

    10 Characteristics of 12 Households by Median

    Household Income,Ethnicity, Ownership ofTandas Curah and Stratain 2012

    11 Average Household 13 Incomes by Ethnicity,

    Strata and Gender in2012 (RM)

    12 Percentage Distribution 14 of Households in Each

    Income Category in 2012:Malaysia and by ethnicityof the household head

    12a Bumiputera 15

    12b Chinese 15

    12c Indian 1512d Others 15

    13 Percentage Monthly 18 Spend on Goods &

    Services by Expenditure Category in 2010 (RM)

    14 Monthly Spend of 20 Households on Different

    Food Groups (in Orderof Amount Spent) by

    Expenditure Category in 2010 (RM)

    15 Chicken Prices 21 2012-2014 YTD

    16a Ownership of Vehicles 24 by Percentage of

    Households by Statein 2012

    16b Ownership of Electrical 24Appliances by Percentage of

    Households by State in 2012

    16c Ownership of TV, Astro, 25 Mobile Phone, Internet and

    VCD/DVD by Percentage ofHouseholds by State in 2012

    17 Income Share by Income 30 Group 1984 and 2012

    18 No. of Households per 31Household IncomeCategory in 2012(thousands)

    19 Redistribution: The Top 33 25% and the Bottom 75%

    20 Government Subsidy 37Expenditure for LPG,

    Diesel and Petrol2000-2013 (RM b)

    21 Gas Price Subsidies in 37 Malaysia by PETRONAS (RM b)

    22 Share of Salaries and 42 Wages, % GDP in 2011

    23 Growth of Wages 43 and Productivity

    24a Median Salary/Wages 43 by Education

    24b Median Wages and 44Employment by Occupation

    25 Educational Attainment in 45 the Workforce 1982-2012

    26 Highest Level of Education 46 Attained in the Workforce: Grouped country

    comparison in 2012

    27 Out of Every 100 Children 48

    in a Cohort of 6 Year Olds

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    06 KHAZANAH RESEARCH INSTITUTE

    1 Nominal GDP per person 03

    for Middle Income

    Countries in 2012

    2 Nominal GDP per person 08

    by State in 2013 (RM)

    3 Individual Wages by 16

    Ethnicity and Strata

    in 2013

    4 Monthly Spend of 19

    Households on Rice, Meat

    and Fish & Seafood byExpenditure Category

    in 2010 (RM)

    5 Housing Prices as a 22

    Multiple of Annual Median

    Income

    6 Housing Affordability of 23

    Malaysians in 2012

    7a True Annual Percentage 26

    Rate (APR) Calculations for

    Consumer Durables

    7b Published APR 26

    7c True APR Calculations 26

    for Cars

    8 No. of Luxury Cars 29

    Sold in 2013 by

    Oficial Distributors

    9 No. of Households per 31Household Income

    Category in 2012 (thousands)

    10 BR1M Payments and 36

    Total Costs

    11 Vehicles by Speciications 39

    and Total Fuel Subsidy

    12 Salaries and Beneits, % 42

    of EBIDTA across Countries

    13 Employment Status 47

    of 2012 Graduates

    14 Effect of Migrant 48Workers Hired on Native

    Jobs and Wages

    15 Secondary Schools 49

    and TVET Numbers and

    Enrolment

    TABLES

    Youth and Serious Crimes 50

    in Malaysia

    BOX ARTICLE

    - iv -

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    07KHAZANAH RESEARCH INSTITUTE

    This report was prepared by the Managing Director and the researchersof the Khazanah Research Institute, namely: Charon bin Mokhzani, DrMuhammed Abdul Khalid, Dr Suraya Ismail, Wan Khatina Wan MohdNawawi, Intan Nadia Jalil, Junaidi Mansor, Adriana Nordin Manan,Aidonna Jan Ayub, Yap Gin Bee, Adibah Abdulhadi, Grace Chang, andPuteri Marjan Megat Muzafar.

    We would also like to thank the Employees Provident Fund (EPF), whokindly shared with us their unpublished anonymized data on the incomesand savings of their members.

    - v -

    ABBREVIATIONS

    ADBI : Asian Development Bank InstituteAPR : Annual Percentage Rate

    b : billionBNM : Bank Negara MalaysiaBR1M : Bantuan Rakyat 1MalaysiaCAGR : Compound Annual Growth RateDoS : Department of Statistics, MalaysiaEPF : Employees Provident Fund, MalaysiaFAMA : Federal Agriculture Marketing Authority, MalaysiaFAO : Food and Agricultural Organisation of the United NationsFDI : Foreign Direct InvestmentGDP : Gross Domestic ProductGST : Goods and Services Tax

    ILO : International Labour OrganizationITUC : International Trade Union ConfederationLPG : Liqueied Petroleum Gask : thousandkm : kilometresm : millionMGI : McKinsey Global InstituteMIDA : Malaysian Investment Development AuthorityMOE : Ministry of Education, MalaysiaMOF : Ministry of Finance, MalaysiaMOHE : Ministry of Higher Education, Malaysia

    NAPIC : National Property Information CentreNEAC : National Economic Advisory CouncilOPEC : Organisation of the Petroleum Exporting CountriesPMR : Penilaian Menengah RendahRM : Malaysian RinggitRCEP : Regional Comprehensive Economic PartnershipSGD : Singaporean DollarSMEs : Small and Medium EnterprisesSPM : Sijil Pelajaran MalaysiaSTPM : Sijil Tinggi Pelajaran MalaysiaTiVA : Trade in Value-Added

    TVET : Technical and Vocational Education and TrainingTPPA : Trans-Paciic Partnership AgreementUSD : US Dollar

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    08 KHAZANAH RESEARCH INSTITUTE

    SECTION

    01INTRODUCTION

    The state of households 01

    The Malaysian workforce 01

    Trade and investment 01

    policies

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    01KHAZANAH RESEARCH INSTITUTE

    INTRODUCTION

    This report sets out some of the pressing issues of the nation that theKhazanah Research Institute is investigating and will provide policyrecommendations on.

    We examine:

    The state of householdsAn understanding of Malaysian households is key to understanding theissues that we face as a nation. This report looks at:

    the disparity and distribution of household incomes household expenditure and the impact of rising food prices housing affordability and household debt subsidy reform and the use of cash transfers.

    The Malaysian workforceThe income earners in most households are salaried workers and so thisreport sets out:

    the composition of our workforce and the wage structure the effect of migrant labour the education attainment and skills levels of our workforce.

    Trade and investment policies

    Raising household incomes among other things requires the appropriatetrade and investment policies. This report looks at:

    trade and investment policies that could lead to higher wages andhousehold incomes, as well as less inequality

    advantages of the Regional Comprehensive Economic Partnership(RCEP).

    These are by no means the only pressing issues of our nation. For example,creating high-income jobs will also need innovation and entrepreneurship,

    which we do not address directly here.

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    02 KHAZANAH RESEARCH INSTITUTE

    THE STATE OF HOUSEHOLDS

    The state of households 03

    Its all about the households 03

    About households 07

    Rich and poor states 08

    GDP is not household income 09

    Deprived households 11

    The states of the 12

    north: Perlis, Kedah, Kelantan and

    Terengganu

    There is an ethnic, 13

    urban-rural and gender divide

    Unequal household incomes 14

    Household expenditure 17

    Unequal spending 17

    Unequal food 18

    The price of food 20

    Housing and debt 22

    Affordable housing should 22

    cost 3x annual median income

    Low income households, 24

    high levels of consumerism

    The scourge of 25

    ansuran mudah

    Household debt reform 27Inequality 28

    Wealth inequality 28

    We have been improving 30

    income distribution

    Perception and reality 30

    Inequality matters 32

    Market and net inequality 32

    Subsidies and cash transfers 34Tackling net inequality 34

    Cash transfers are not new 35

    Corporate welfare 37

    Reforming the fuel 39

    subsidy system

    SECTION

    02

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    03KHAZANAH RESEARCH INSTITUTE

    Its all about the householdsMalaysia can rightfully be proud of its economic transformation.

    Our nominal GDP has grown 17.5x from RM53.3b in 1980 to RM984.5b

    in 2013, while nominal GDP per person grew 7.8 times from RM3,841 toRM32,984 during the same period.

    Table 1: Nominal GDP per person for Middle

    Income Countries in 20121

    Country USD

    Argentina 11,573

    Brazil 11,340

    Turkey 10,666

    Malaysia 10,432

    World 10,318

    Mexico 9,749

    Costa Rica 9,386

    East Asia & Pacic 9,040

    Upper middle income 7,285

    THE STATE OF HOUSEHOLDS

    Chart 1: Growth of Malaysian Nominal GDP

    and GDP per person 1980-20132

    High GDP per person does not however always translate into high

    household incomes and high average income can be distorted by theincomes of the very well-off. The better measure is median householdincome, the half-way mark. Our median household income, like our GDPper person, is one of the highest in Asia after the developed nations (Japan,Singapore, South Korea and Taiwan).

    1,800

    1,600

    Indexedvalue

    (1980=100)

    1,400

    1,200

    1,000800

    600

    400

    200

    GDP

    GDP Perperson

    1984

    1988

    1992

    1996

    2000

    2004

    2008

    2012

    1 World Bank (2014)2 DoS (2014a)

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    04 KHAZANAH RESEARCH INSTITUTE

    THE STATE OF HOUSEHOLDS

    Chart 2: Annualised Nominal Growth Rates

    1995-2012 (percentage)5

    The data is clear that households have in fact beneited from our risingGDP. As Charts 2 and 3 show, the Compound Annual Growth Rate (CAGR)of median household income from 1995 to 2012 was 5.9%; it grew fromRM1,377 to RM3,626, and has grown more than average household income.Incomes of the lower income households have grown the fastest theaverage household income of those in the bottom 40% has grown the most,followed by the middle 40% and then the top 20% of households groupedby household income (Chart 4a).

    Between 2009 and 2012, Malaysias real median household income grewby 19%; in contrast, in the US and the UK3real median household incomedropped by 4%.4

    The latest igures indicate that in real terms (ie after adjusting for inlation)median household income grew slightly faster than the growth of GDP perperson (Chart 4b) although in the past, it was the latter that grew faster.

    5.5%

    AverageHousehold

    income

    5.9%

    MedianHousehold

    income

    6.7%

    NominalGDP

    perperson

    3 This is in terms of median equivalised disposable household income4 The Economist (2014), ofice for National Statistics UK (2013)5 DoS (2013a), KRI calculations6 DoS (2013a); the Minister in the Prime Ministers Department had announced in September 2014 that the average

    and median household incomes for Malaysia in 2014 were RM5,900 and RM4,258, respectively. Pending publicationof the Household Income Survey Report 2014 by DoS, our Report will use igures from the Household Income andBasic Amenities Survey Report 2012.

    Chart 3: Average and Median Monthly

    Household Income 1995-2012 (RM)6

    1995

    1997

    1999

    2002

    2004

    2007

    2009

    2012

    6,000

    5,000

    4,000

    3,000

    2,000

    1,000

    1995 1997 1999 2002

    2,020 2,606 2,472 3,011

    1,377 1,724 1,704 2,049

    2004 2007 2009 2012

    3,249 3,686 4,025 5,000

    2,211 2,552 2,841 3,626

    Average household income

    Median household income

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    05KHAZANAH RESEARCH INSTITUTE

    7 DoS (2013a), EPU (2013), KRI calculations8 DoS (2013a), World Bank, KRI calculations

    THE STATE OF HOUSEHOLDS

    Chart 4b: Growth of Real Household Income and Real GDP per person 1995-20128

    I

    ndexedValue(1995=100)

    Median Monthly

    Household income

    Average Monthly

    Household income

    GDP per person180

    170

    160

    150

    140

    130

    120

    110

    100

    1995

    1997

    1999

    2002

    2004

    2007

    2009

    2012

    GDP per personBottom 40%

    Middle 40%

    Top 20%

    Chart 4a: Growth of GDP per person and Nominal Average Household Income 1979-20127

    1979

    1984

    1987

    1989

    1992

    1995

    1997

    1999

    2002

    2004

    2007

    2009

    2012

    100

    300

    500

    700

    900

    1,100

    IndexedV

    alue(1979=100)

    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    06 KHAZANAH RESEARCH INSTITUTE

    9 DoS (2014b)

    We have done well but we should, as always, strive for better. Our averagemonthly household income in 2012 was RM5,000. But our medianhousehold income was less, at RM3,626.

    23% of households earned less than RM2,000 per month 55% less than RM4,000 per month 74% less than RM6,000 per month.

    At the individual level, the latest data from DoS9shows that in 2013 the

    median monthly salaries and wages was RM1,700. This is consistent withthe data from EPF that show that 62% of active EPF members earned lessthan RM2,000 per month and 96% earned less than RM6,000.

    THE STATE OF HOUSEHOLDS

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    07KHAZANAH RESEARCH INSTITUTE

    10 DoS (2011b)

    Selangor5.3

    Sarawak2.4

    Putrajaya0.1

    Sabah3.1

    Johor3.2

    Melaka0.8

    N.Sembilan1.0

    Kedah1.9

    Labuan0.1Perlis

    0.2

    K. Lumpur1.6

    Kelantan1.5

    Perak2.3

    P.Pinang1.5

    Pahang1.4

    Terengganu1.0

    Chart 5a:Persons perHousehold

    Chart 5b:Ethnicity ofHousehold Head

    Chart 5c:Gender ofHousehold Head

    Chart 5d:Location ofHousehold

    Male84%

    Female16%

    Urban74%

    Rural26%

    Bumi64%

    Chinese28%

    Indian7%

    18% 2

    15%

    316%

    420%

    520%

    > 621%

    About householdsBased on the latest available data from DoS, the population of Malaysia in2010 was 28.6 million. There were 6,341,273 households and an averageof 4.3 people per household as of 2010.10The following charts tell us whereour people live and the composition of their households.

    Chart 5: Population of Malaysia by State in 2010 (m)

    What makes a household? Composition of households headed by a Malaysian by:

    THE STATE OF HOUSEHOLDS

    Others1%

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    08 KHAZANAH RESEARCH INSTITUTE

    Table 2: Nominal GDP per person by State

    in 2013 (RM)

    12

    Kuala Lumpur 79,752

    Sarawak 41,115

    P. Pinang 38,356

    Selangor 37,851

    Melaka 34,109

    N. Sembilan 33,033

    Pahang 26,759

    Johor 25,302

    Terengganu 23,285

    Perak 21,150

    Sabah 18,603

    Perlis 18,519

    Kedah 16,316

    Kelantan 10,677

    Malaysia 32,984

    11 GDP per person for all countries are obtained from the IMF except for Malaysia, which is sourced from DoS. Seoul,Bangkok and Jakarta data are sourced from the countries respective national statistics departments. The exchange ratesused are the spot exchange rates on 31/12/2012.

    12 DoS (2014a)

    Rich and poor statesThere is a wide variation in nominal GDP between states. Kuala Lumpur, thesecond richest by nominal GDP but the irst in GDP per person terms, has ahigher nominal GDP per person than Korea. Kelantan, the poorest state bynominal GDP per person and second from the bottom in terms of nominalGDP, lies between richer Indonesia and poorer Sri Lanka in terms of GDPper person.

    Singapore 53,516

    Seoul 26,829

    Kuala Lumpur 24,240

    Korea 22,590

    Bangkok [2011] 13,297

    Jakarta 11,487

    Malaysia 10,387

    Thailand 5,390

    Terengganu 7,435

    Indonesia 3,591

    Kelantan 3,481

    Sri Lanka 2,876

    Chart 6: Nominal GDP per person in 2012

    (USD)

    11

    THE STATE OF HOUSEHOLDS

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    09KHAZANAH RESEARCH INSTITUTE

    Chart 7: Nominal GDP by Malaysian States in 2012 (RM b)13

    Selangor204.2

    Nominal GDP in RM b

    4.3 204.2

    Sarawak102.9

    P. Pinang59.6

    Pahang40.6

    Melaka28.3

    Terengganu24.8 Perlis 4.3

    Kelantan17.4

    Perak49.7

    N.Sembilan

    34.3

    Kedah31.6Johor

    84.5

    Sabah64.1

    K. Lumpur132.5

    13 DoS (2014a)

    GDP is not household incomeHigh GDP, GDP per person and GDP per household do not necessarilytranslate into high household incomes.

    Average household income also often does not present a true picture of theincome of most households as it can be distorted by the incomes of the verywell-off. It disguises the fact that the median is actually much lower.

    THE STATE OF HOUSEHOLDS

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    10 KHAZANAH RESEARCH INSTITUTE

    THE STATE OF HOUSEHOLDS

    Chart 8: Median and Average Monthly Household Income and GDP per Household

    per Month in 2012 (RM)14

    Average Monthly

    Household Income

    Median Monthly Household Income, actual

    gures marked on chart

    Sarawak for example has the second highest GDP per household but

    ranks eighth for average and seventh for median household income. BothPahangs and Terengganus average household incomes are lower thanSarawaks, but the median household incomes of all three states are almostthe same. Amongst the bottom three states, Perlis has the highest GDP perhousehold and average household income but still has a lower medianhousehold income than Kedah.

    Median & Average MonthlyHousehold Income

    GDP Per HouseholdPer Month

    K. Lumpur

    Selangor

    P. Pinang

    Melaka

    Johor

    Malaysia

    N. Sembilan

    Pahang

    Sarawak

    Terengganu

    Sabah

    Perak

    Kedah

    Perlis

    Kelantan

    1K 0

    5K

    16K

    20K

    24K

    3K

    8K

    7K

    2K

    4K

    6K

    4K

    12K

    8K

    5,847 26,369

    5,353 12,728

    4,039 12,843

    3,923 12,328

    3,650 9,092

    3,626 12,369

    3,575 12,170

    3,067 10,817

    3,047 15,932

    3,034 9,772

    2,860 10,034

    2,665 7,285

    2,633 5,949

    2,387 6,843

    2,276 4,814

    14DoS (2013a), KRI calculations. Sources of household income comprise employment (wages and emoluments), incomefrom self-employment, property income (including royalties, rents, interests and dividends) and current transfersreceived (including remittances).

    http://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspxhttp://www.krinstitute.org/Research-@-Interactive_Charts.aspx
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    THE STATE OF HOUSEHOLDS

    Deprived householdsThe federal government has done its part in providing schools, hospitalsand electricity. Except in Sabah and Sarawak, which have remote interiors,most households have electricity and are less than 9km away from asecondary school or a health facility.

    Chart 9a: Percentage of Households that have Electricity, Schools and Public Health in 201215

    100 Rural households accessible toelectricity.

    Household residences in a ruralarea that are located > 9kmfrom a secondary school.

    Household residences that arelocated > 9km from a publichealth centre.

    80

    60

    40

    20

    0

    Selangor

    N.Sembilan

    Johor

    Melaka

    Pahang

    P.Pinang

    MALAYSIA

    Perak

    Sabah

    Sarawak

    Perlis

    Kedah

    Terengganu

    Kelantan

    Water and sanitation in some states on the other hand have not been as wellprovided, as the chart below shows. For example, in Kelantan, only 50% ofits rural households and 68% of its urban households have pipe water. Themajority (57%) of its households have no lush toilets but use tandas curah.

    15DoS (2013a)16DoS (2013a)

    Chart 9b: Percentage of Rural and Urban Households that have Pipe Water and Tandas

    Curah in 201216

    Urban households with accessto pipe water.

    Households with tandascurah.

    Rural households with accessto pipe water.

    100

    80

    60

    40

    20

    0

    Selangor

    N.Sembilan

    Johor

    Melaka

    Pahang

    P.Pinang

    MALAYSIA

    Perak

    Sabah

    Sarawak

    Perlis

    Kedah

    Terengganu

    Kelantan

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    The states of the north: Perlis, Kedah, Kelantan and Terengganu

    Chart 10: Characteristics of Households by Median Household Income, Ethnicity, Ownership

    of Tandas Curah and Strata in 201217

    Attention has rightly been focused on the development of our mostsouthern Peninsular states, and Sabah and Sarawak, with their remoteinteriors. But we must also improve the state of households in the north.We must bring education and employment opportunities, and improvebasic amenities like water and sanitation. The corridor initiatives and the

    double-tracking to Padang Besar will help, but we must do more.

    Median Household Income (RM) Percentage of Households with Tandas Curah

    Urban

    Urban RuralPopulation

    231,541

    1,000,000

    2,000,000

    3,000,000

    4,000,000

    5,462,141

    Ethnicity

    2,276 5,847 0.0 56.90

    Bumiputera

    Chinese

    Indian

    Non-Malaysians

    Others

    Rural

    17 DoS (2013a)

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    There is an ethnic, urban-rural and gender divideOf the three major ethnic groups, Chinese households are on average therichest and Bumiputera ones the least well-off. The average income ofhouseholds headed by an urban male Chinese is the highest, while thoseheaded by female Indians and Bumiputeras in the rural areas are thelowest.

    The income gap between the ethnic groups is, however, less than the urban-rural income gap, which explains why young people move to towns from

    their kampung. For example, in the rural areas, the average Bumiputerahousehold income is less than the average Chinese household income,whereas the average urban Bumiputera household income is much higher.

    18 DoS (2013a)

    Chart 11: Average Household Incomes by Ethnicity, Strata and Gender in 2012 (RM)18

    Average Household Income

    Median

    Household

    Income

    Area Ethnicity Malaysia Male Female

    Malaysia National 5,000 5,248 3,671 3,626Chinese 6,366 6,700 4,508 4,643

    Indian 5,233 5,624 3,304 3,676

    Bumi 4,457 4,654 3,404 3,282

    Others 3,843 3,786 4,097 2,762

    Urban National 5,742 6,010 4,239

    Chinese 6,622 6,985 4,646

    Indian 5,491 5,885 3,840

    Bumi 5,301 5,502 4,129

    Others 5,323 5,230 5,674Rural National 3,080 3,225 2,387

    Chinese 3,806 3,951 2,795

    Indian 3,271 3,539 2,224

    Bumi 3,010 3,148 2,368

    Others 2,432 2,487 2,149

    Average Income (RM)

    Max: 6,985Min: 2,149

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  • 8/21/2019 The State of Households

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    14 KHAZANAH RESEARCH INSTITUTE

    THE STATE OF HOUSEHOLDS

    Unequal household incomesIncome disparities vary by ethnic group and there is also an intra-ethnicinequality in income distribution.

    The DoS Household Income Survey puts households in various monthlyhousehold income brackets. It starts with households that earn less thanRM1,000 a month, then those that earn more than RM1,000 but less thanRM2,000, all the way to those that earn RM10,000 a month or more.

    Others and Bumiputeras tend to have higher proportions of householdsthat earn less than RM2,000 a month, whereas the Chinese and Indianshave higher proportions of households earning more than RM5,000 permonth. The Chinese have proportionately the most households that earnRM10,000 or more per month.

    19 DoS (2013a)

    Chart 12: Percentage Distribution of Households in Each Income Category in 2012:

    Malaysia and by ethnicity of the household head19

    Monthly Household Income Categories (RM)

    20%

    Below1k

    1k-