One of my earliest memories of the place where my father grew up, Kelantan — a predominantly rural state on Malaysia’s far northeastern coast — is of its famous flood-measuring point. Built around 1929 and known as Tangga Krai, it consists of a series of flood markers beside a set of steps that rise steeply from the banks of the Kelantan River to a height of about 100 feet — a simple but effective warning in the country’s most flood-prone region.
For me, like most urban dwellers, the dizzying scale and quaintly low-tech nature of the steps were part of Kelantan’s unique character: a rugged land of extremes, cut off from the rest of Peninsular Malaysia by jungle-covered mountains, rich in Malay traditions reflected in its own distinctive vernacular. But Kelantan’s beauty and relative isolation also obscured its poverty. When Tangga Krai was overwhelmed a year ago by devastating floods that forced the evacuation of tens of thousands of people in the state, the gulf between Kuala Lumpur’s affluent middle class and Kelantan’s struggling rural families was laid bare.
The growing inequality between rich and poor has become one of the most pressing issues of our time. In Malaysia, it is forcing reassessment of what it means to be a middle-class country. The Eleventh Malaysia Plan — the government’s road map for achieving developed nation status by 2020 — is devoted in large part to a distribution of welfare, education and employment opportunities to the poorest segments of society. But this means battling long-established patterns of deprivation and a decades-old model of material advancement that is proving difficult to adjust.
Malaysia’s rapid rate of economic growth — averaging around 6 percent annually for the last 25 years — has created an expanding middle class concentrated in major cities like Kuala Lumpur and Penang, and in the prosperous states of Selangor and Johor. Here, luxury apartment buildings dominate the city centers — apartments in the glitzy Norman Foster-designed Troika development in downtown Kuala Lumpur, for example, cost as much as $450 per square foot — while in the suburbs, fee-paying schools with sprawling campuses offer an international curriculum to tap into the middle class’s aspirations for higher education and access to foreign universities. Leisure, too, comes at a price: The Kuala Lumpur Golf and Country Club has a long waiting list of people willing to pay the $57,000 membership fee.
But Malaysia’s drive for development has created many stragglers. In Kelantan, the country’s poorest state, the median household income is about one-third of that in Kuala Lumpur. World Bank data shows that more than 60 percent of the nation’s poor live in rural areas.
Not surprisingly, these income levels have a direct impact on the well-being of the most vulnerable: In contrast to Selangor, the richest state, where child poverty is barely at 2 percent, rates of 31 percent have been recorded by Unicef in Sabah, in eastern Borneo, and 15 percent in Kelantan; the child mortality in Kelantan is double the rate it is in Kuala Lumpur. Recent reports from Malaysian research institutes paint the same picture: a country whose economy is dominated by those who hold the most lucrative posts in private-sector employment.
The polarizing effect of unevenly distributed growth has created not only a wider gap between rich and poor, but also a large group of disgruntled people — particularly in the cities — who remain trapped in salaries of between $200 and $400 a month. That is not enough to live comfortably in Kuala Lumpur or Penang.
These entrenched divisions threaten to thwart the government’s ambition to achieve the World Bank’s High Income status in just over four years. The government recognizes that its final push to join the world’s elite depends on its society’s being seen as fair and supportive of the poor.
But with the oil price depressed (oil and gas account for about 17 percent of Malaysia’s exports) and the economy slowing, progress has stalled and the government was recently forced to raise the top income tax rate. This was a bold move since the administration is fighting accusations of corruption and financial mismanagement and the urban middle class is still smarting from the new Government Service Tax, introduced earlier this year. That was a deeply unpopular measure in a country where total household debt last year reached 87 percent of gross domestic product.
The new tax regime, together with the widening disparity of incomes, means that Malaysians are having to question the template of economic development that has ruled over recent decades — and, in turn, the aspirations driving it. The long-held belief that a new bourgeoisie would naturally expand and create incentives for others to strive and rise has underpinned the model of Malaysian growth until now: Thriving free markets were supposed to reward individual effort. But it has become difficult to avoid the fact that without greater government intervention, a large proportion of the population is falling behind.
As schools and houses are rebuilt in flood-ravaged Kuala Krai and life returns to normal, it is clear that the Kelantanese, like Malaysians generally, are beginning to think about how a sophisticated society could share its wealth more fairly. According to the Pew Research Center, more than three-quarters of Malaysians now consider income inequality “a big problem.” This is perhaps the strongest indicator of shared awareness of the change now necessary for the country to become the developed nation it wants to be.
Tash Aw is the author of three novels, including, most recently, Five Star Billionaire, and a contributing opinion writer.