Beware, this post is extremely long. My apologies, but there’s an e-mail attachment pasted in here added to my usual long winded yakking. Hope you’ll survive to the end.
As usual, I was blog surfing when I came to a thought provoking post at O-wern’s blog. A rarity among my friends who actually dared to be openly critical of our motherland on the Internet (where your posts will be recorded for anybody’s future reference), his blog reads like a Malaysiakini blog.
Hehe owie, if you read this, sometimes I think you’re better suited to be a journalist or politician than studying medicine. But on the other hand, maybe that extra 11 years in S’pore would be useful (plenty of time to learn how the Singaporeans tick).
In his post, ‘Cost Of Living In Malaysia’, it makes you wonder if something is truly wrong with our currency, Ringgit Malaysia (I’ve came across something similar on Friendster too). Is our currency really that pathetic, despite claims of healthy growth from the ‘official’ sources? To save you time, I’ll repost the unabridged text in the email forwarded to him here for you to read.And you could always go here for the post he put up.
Here you go:
Cost of Living in Malaysia….Terlalu Tinggi? PDF Cetak
Tue | Apr 25, 06 | 04:02:09 PM
Oleh Dr Zain Azrai, London
The argument in this thread from day one is the cost of living in each country (especially UK and Europe based on what you earn in the respective country) and whether the standards are higher than in Malaysia.
I tried to point out that many Malaysians always convert and that is why they say the UK is expensive. In fact, the cost of living is much cheaper than in Malaysia.
In actual fact, Malaysians are being conned because for such a rich and resource rich country, the pay in Malaysia is way too low compared to the cost of living and inflation.
One good example is Singapore.
Singaporeans (average) earns around S$3000 to S$4000 and nearly everything is half the price of Malaysia. Eg; clothes, computer parts, electronics etc. But the average Malaysian still earns RM$2000 plus and goods are double the price of Singapore.
This is the same as the UK. If you earn around 2000 pounds, you can liken this to the person earning RM$2000 in Malaysia. I give you some examples below. Maybe you can understand.
1) Good terrace house
It is more or less the same. If you want a house in KL, it would most probably be in Puchong and not Damansara Heights. So your house would be RM$200,000. In UK (London!), you can get a decent new house in Zone 6 (still within the tube) for 200,000 pounds.
If non London, you can get a nice house also for less than 200,000 pounds outside London (Manchester = <100, 000 pounds). The same also applies to buying a house in Seremban, Kajang etc. You can buy a nice house for RM200, 000 below. So buying a house is the same for the local and the Malaysian.
Renting a place is the same too or maybe cheaper than in Malaysia (I am not sure of this). A 2-bedroom flat in London is about 750 pounds (Zone 2). 500 pounds outside Zone 6 but still able to commute to London. A 2-bedroom house in Nottingham is 450 to 500 pounds. A 3-bedroom house in Belfast and Manchester is about 300-350 pounds.
2) A car
A good Wira is RM$55,000. Most Malaysians have to take 7-year loans and be in debt all the time. If you are earning RM$2000 a month, you take nearly 3 years saving the RM$2000 with not eating at all just to buy a Wira.
In UK, the average local earns about 2000 pounds. He saves 3 months, he can buy outright a good Ford Fiesta or a Vauxhall Corsa without being in debt.
If buying a second hand car, even better. A 1990 Mercedes 190E cost 500 pounds. My 1996 Mercedes E220 cost 2000 pounds. My friend just gave me his 1989 Honda Accord (Auto) for free because he said he could only get 30 pounds for it.
I used it for a few months and decided to give it of for free too. That alone speaks for itself.
Even if you are kuli or an office boy, you still can drive a Mercedes or a BM. Yes, kuli’s and office boy’s get paid quite well.
Average temp/office boy in London can earn about 7 to 10 pounds and hour. Overtime is 1.5 times or double. A brick-layer can earn 20 pounds an hour.
The same Indon who lays bricks in Malaysia earns RM$50 for the whole day.
Before I became a doctor, I used to be an office boy and I earned near 300 pounds a week working about 70 hours a week. My makan was 30 pounds a week. My rent was 70 pounds a week for a room but I still drove a BMW back then. I bought the 10-year old BMW 3 Series car for 200 pounds.
Amazing how an office boy can drive a safe and luxurious car.
3) Petrol
For a UK person earning 2000 pounds, 80 pence (now: 92 pence) a litre/gallon is cheaper than RM$1.52 (now: RM$1.92!) paid in Malaysia. If you don’t convert, it is like paying 80 sen a litre in Malaysia
4) Shopping
20 pounds (which is 1% of 2000 pounds) can buy you 1 week’s worth of groceries in Tesco. RM$100 (which is 10% of RM$2000) can also buy you 1 week’s worth of groceries in Giant or Carrefour.
5) Utility Bills (This is what I pay in UK)
1. Virtually non-stop heating the whole day only 20 pounds a month (Only 1% of the 2000 pounds earned).
2. Electricity, I use my electricity maximum only 20 pounds a month.(Only 1% of the 2000 pounds earned)
3. My water bill also comes to about 20 pounds a month (Only 1% of the 2000 pounds earned)
4. My internet - I get 2Mbps for about 25 pounds (Bulldog DSL) (Also slightly above 1% of the 2000 pounds earned)
5. Astro Equivalent (NTL cable or Sky) - 30 pounds per month (Also slightly above 1% of the 2000 pounds earned)
In Malaysia, this is what I used to pay
1. Tenaga Bill comes to RM$200 to RM300 a month with 3 air-cons. This is more than 10% of the RM$2000 earned)
2. Water (Puas) comes to RM$40 (This is about 2% of the RM$2000 earned)
3. Astro RM$100 (if you take Chinese package) (This is about 5% of the RM$2000 you earn)
4. Internet Streamyx 512K RM 88 per month (This is about 5% of RM2000 you earn)
6) Books
A good book is about 10 to 15 pounds in the UK. This is less than 1% of the 2000 pounds you earn. In Malaysia, you have to spend RM$75 to RM$100 for a decent book in MPH or Kinokuniya in KLCC. This is about 5% of the RM$2000 ringgit you earn.
7) Education
I think it is about RM$20,000 per year to do a degree in Sunway Monash and about RM$12,000 per year to send your kid to UM, UKM, USM etc. I am not sure about this.
But in UK, it is only 3000 pounds a year to send your kid to a great university. That also, the white man still makes a lot of noise because the grants were taken away. Previously, it was virtually free for the English man to send his kid to university but now, since the grant was taken away, he has to spend 3000 pounds per year to send his kid to university and less money to get drunk in the pub.
Well, if you are earning RM$2000 ringgit, sending your kid to UM to study is quite difficult. If you are earning 2000 pounds per month, you can easily send you kid to university in the UK.
Even worse for the poor non bumi’s not given a place in local university.
Even if they can afford, they won’t get a place because of the quota system. Unfortunately, the Chinaman and the Indian who gets 5A’s in STPM have to be sacrificed and not given a place to let the Malay fellow with 2E’s and 3 Fail’s to enter the Medical Faculty or Law Faculty.
So the non-bumi’s have to save RM100,000 per year to send their kid to the UK. In the UK, at least the white man still can go into university based on results and merit and only pay 3000 pounds per year.
Luxuries
Panasonic Plasma TV in Malaysia about RM20,000. If you are earning RM$2000 a month, memang mahal! You have to save 2 years your monthly salary to buy it. In UK, the same Panasonic (ironically, Panasonic plasma is made in Japan and Japan is close to Malaysia, so the plasma should be cheaper in Malaysia) is only 200 pounds. And this is only 10% of the 2000pounds earned.
9) Health
NHS is free. Though the service is slow, quality is still there. You still can get a top quality by-pass for free although you may have to wait many months.
In Malaysia, IJN charges RM$30,000. SJMC charges RM$50,000. GH is free but as many people know, GH and UH have clown doctors.
10) Assessments to local councils
I may pay high council tax but at least my council assures my streets are clean and safe, got no holes (pot holes) on my roads, and they jump and attend to me whenever I call them.
When I stayed in Malaysia, I paid my assessment and quite rent but MPSJ I lived in Subang) told me to "podah" whenever I asked them to come and fill up the pot holes, cut the long lalang, put street lighting etc The councils, especially MPPJ and MPSJ, were more interested in eating nasi lemak and going for 10 teh tariks in a day during office hours and hardly did anything for their residents.
11) Income Tax
My national insurance and income tax also is not wasted. When I was unemployed in 1997, the government ia social security paid for my 2-bedroom flat for one whole year and I was given about 100 pounds per week for me and my wife to live on. I am happy to know that one day if I lose my job, I can still claim social security and get my apartment paid and food to eat again for free. It is a good security to know.
The list goes on. Here alone you can see, the sterling you earn goes a long way in the UK. So your quality of life is far better in the UK than a Malaysian in Malaysia. It is just that Malaysians are just too content with what they have. But you compare apple for apple.
The British just love to complain. They have it made but still they love to complain. Nothing is good enough for the British. The government gives the citizens so much but they still seem to want more and more.
LeisureMan
Apart from a few items (it’s unbelievable that a car can cost only 30 pounds!) it seems that the writer seems to be right. I cannot substantiate the claims made there, but the writer may have a valid point.
You see, despite claims to be a democratic and open country our economy does not adhere to the principle of 100% open, free-market practices. To be fair, no economy in the world is 100% open, but as clichéd as it sounds there are economies that are more open than others.
Firstly, our currency is deliberately undervalued. Yes, deliberately! After the 1997 crisis, we’re pegged to RM3.80=USD1 (from approximately around RM2.50=USD1, if I remember correctly). It stayed that way until 2006, where BNM decided to a ‘partial floating’ of our currency. Now, the RM would be managed against a basket of currencies (and within a range). In short, they’ll make the RM slightly more elastic. BNM will allow the RM to appreciate (or depreciate) very slowly. Based on the pre-1997 exchange rates and optimistic reports about our economy (undoubtedly a TKS reasoning flaw), I optimistically forecasted an appreciation to RM3.00=USD1. At the least, I thought it was feasible for it to reach RM3.50=USD1 in the short term. I was wrong. Dead wrong. So, if it didn’t go the way I hoped it to be, what went wrong? Did I make an overly optimistic forecast, or I got it all wrong? I wouldn’t be so presumptuous as to call the official figures wrong or misleading, since it’s way beyond my level of understanding.
I’m still not quite sure, but I got a few ideas. After the re-evaluation I kept my eyes peeled for some clues. That’s partly why I started reading The Economist (I had too much free time, and their caricatures are top notch!)
Here’s what I got.
According to their burgernomics (or the Big Mac index) our ringgit is weaker than the dollar, together with a few other currencies (most notably the Chinese yuan). Although there are flaws in using Purchasing Power Parity to compare currencies per se, it is quite useful. Furthermore, the RM appreciated slightly the day after the Central Bank of China made a slight adjustment to their currency. As such, I’m convinced that BNM includes the yuan as a benchmark currency, and is deliberately keeping our currency undervalued.
I’m just the street economist, so don’t impale me if I got it all wrong. You know, I’m young and naïve, and brought up to have pessimistic outlook of the world and human nature (I still try to keep a positivist outlook on human character on a personal level). Currently, I’m suspecting that the public are being inconvenienced in the best interests of businesses and nation. As we’re a manufacturing nation (we export products, not ideas and innovation), keeping our currency cheap is a good incentive, so that we can sell things cheap just like China. Furthermore, it makes it cheaper for investors to dump money here. Therefore, the M’sian manufacturers benefits, while we suffer. You see, in China the Chinese can practically buy anything in China so a weak yuan wouldn’t impact them significantly. But here in M’sia, we don’t benefit as much. Take sugar for an example. Keeping the price of sugar regulated isn’t such a good idea, because manufacturers benefit from it (and sell it to us at a marked up price). As a direct result, we face a sugar shortage. Same goes for oil. The government is subsidising oil to Singaporeans, Thai and Bruneians!
During my NTU ASEAN Scholarship interview, I was asked for my opinion about the reduction in oil subsidies. I agreed in the affirmative, as it doesn’t help anybody in the long term. Look, if the government want to give us subsidies, give us a tax rebate according to miles travelled! If not, they can mandate an increase in wages! But no, the government wasted too much money like propping up failed businesses, and a wage increase wouldn’t be in the best interests of businesses.
Another possible reason I came up with is a deliberate attempt to clamp down on capital outflow and brain drain. I have read somewhere (not an official source) that a million Malaysians have emigrated in the past 25 years. That equates to 40,000 Malaysians annually! Maybe they think that it should help rectify the brain drain problem, but it would definitely be a case of addressing the symptom, not the cause. Combine that with Malaysians making investments overseas. The KLSE is crap anyway. An astounding 70% of Initial Public Offering shares of a company are allocated to bumiputras. Once they get the stocks, most Malays sell them off for a quick profit. This is utter nonsense!
Please don’t take me for a racist here, but it was published in newspapers some time ago. The dumb quotas and the bumiputra classification must go. Not being classified as ‘sons of the Earth’ just because we’re not Malay and Muslim isn’t helping in creating a socially integrated and progressive nation. Unfortunately, we’re all equally guilty in allowing this to happen. To quote V, “Well, certainly there are those who are more responsible than others, and they will be held accountable, but again, truth be told, if you’re looking for the guilty, you need only look into a mirror.” A memorable movie, especially when it embodies the present day realities we’re going through (if you notice, all the references to literature in the movie are either about battles, or personal vengeance). Darn, if only I got ‘The Count of Monte Cristo’ in my collection. I only got ‘The Three Musketeers’. I must seriously consider expanding the family literature collection instead of buying only science books. After all, I’m out of books for leisurely reading at home. But as you can see, it’s expensive to buy books with RM.
Maybe I should go to the UK and work there.