Is There an Underside to Economic Growth? A Mixed-Methods Analysis of Malaysia

Investment Rating - The report does not explicitly provide an investment rating for the industry analyzed Core Insights - The report highlights a paradox in Malaysia's economic growth, where high GDP growth and significant reductions in income poverty and inequality coexist with widespread public discontent [3][8][19] - Despite improvements in material living standards, citizens report challenges such as income-expense imbalances, reliance on dual incomes, growing indebtedness, and ethnic polarization [3][8][19] Summary by Sections Introduction - The paper discusses Malaysia's economic success juxtaposed with social discontent, particularly following the 2018 elections [8][19] - It documents the Malaysian "miracle" through diverse data and qualitative focus group discussions to understand citizen perceptions and challenges [3][8] Economic Success: Miracle vs. Paradox - Malaysia transitioned from a low-income country to an upper-middle-income country, with GDP per capita rising significantly and poverty rates dropping from 49.3% in 1970 to 0.4% in 2016 [19][21] - The New Economic Policy (NEP) aimed to eradicate poverty and restructure society, leading to improvements across ethnic groups [31][35] Focus Group Analysis - The report includes findings from 56 focus group discussions, revealing both positive and negative aspects of intergenerational change, including improvements in education, poverty levels, and infrastructure [46][55] - However, a significant number of participants reported an imbalance between income and expenses, indicating that rising costs of living have outpaced income growth [66] The Downside of Progress - A majority of focus group participants expressed feelings of economic strain despite visible progress, citing the need for multiple jobs and dual-income households to meet basic needs [66] - The qualitative data suggests that while material conditions have improved, many Malaysians feel worse off due to rising living costs and social disparities [66]