KUALA LUMPUR: Countries need to have a firm national social compact to formulate policies in addressing inequality, particularly in income distribution.
Khazanah Research Institute (KRI) chairman, Tan Sri Andrew Shen Len Too said the national social compact, comprising the academia, businesses and civil servants (ABC), should work closely to ensure success in the new economy.
“The ABC partnership needs to tackle key issues of social inclusivity and development. It is crucial for them to share views on how to oversee sustainable living, which are inclusive, green and progressive,” he said during a presentation at the Malaysian Income Distribution in a Global Context Seminar organised by KRI yesterday.
Sheng said government policies should help to cultivate an eco-system that encourages innovation and risk-taking, but true success only comes from the community’s self-help, irrespective of race or creed.
However, he added, ongoing challenges will remain to address the disparity of income distribution such as technological forces, which would replace basic-skilled labour.
“Inequality is still growing in almost every country and this is conundrum because with the spread of global knowledge, the world has learned to create income and wealth,” said Sheng.
Meanwhile, KRI Research director, Allen Ng said addressing inequality in income distribution is a complex issue, which would primarily depend on the quality of employment of population.
“Broadly, the Malaysian economic development has been inclusive since the 1970s. A gradual trend in improving inequality has been observed to date, punctuated only during the rapid industrialisation of the mid 1980s to late 1990s,” he added.
Ng said it has since benefited about 70 per cent of the Malaysian population, mainly in the Bottom 40 and Middle 40 group. He also said the trend would relatively slow down the aggregate productivity growth, as well as lag in technological adoption.
The one-day seminar was jointly organised by Khazanah Nasional Bhd and attended by the Sultan of Perak, Sultan Nazrin Muizzuddin Shah. — Bernama