Sunday, February 10, 2008

Malaysian Income Rose by 40% over 3 years?

The Star reported that Malaysia's per capita income rose by 40% in 2007 compared with 2004 according the Second Finance Minister, Tan Sri Nor Mohamed Yakcop in Penang. He said that per capita income was now RM22,345 compared with RM15,819 previously.

Nor Mohamed Yakcop must either be completely out of his mind, or can no longer perform simple Mathematics or worse, attempting to insult the intelligence of ordinary Malaysians.

Malaysia's Gross Domestic Product (GDP) grew by 5.0%, 5.9% and an estimated 6.0% in 2005, 2006 and 2007 respectively according to the Government's official statistics.

Based on the above growth rates over the past 3 years, Malaysia's GDP grew by approximately 17.9% from 2004 to 2007.

Income or GDP per capita is calculated by dividing the GDP with the total population. Therefore, it is completely inconceivable that our per capita income increased by 40% when our GDP grew by only 17.9%. Unless of course, the honourable Minister believes that our population shrunk by some 16%!

To achieve 40% growth, Malaysia must be growing in excess of 12% per annum. Hence, to grow by 40% over 3 years, with a population growing at just under 2% per annum, that will actually make Malaysia the fastest growing economy in Asia, outstripping even China and India.

The Second Finance Minister should refrain from getting intoxicated by the general election fever, in the attempts to paint a heavenly picture of the Malaysian economy. He must instead make an official public apology for his outrageous claims.
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