At $27,227, Malaysia’s GNI per capita based on purchasing power parity is less than half of Singapore’s – here’s what that means

But Malaysia’s GNI is still higher than countries or regions like Greece and Russia.
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Ever wondered how Malaysians’ purchasing power compares to the rest of the world?

According to the latest report by the United Nations Development Programme (UNDP), in 2018, Malaysia had a $27,227 gross national income (GNI) per capita based on purchasing power parity (PPP). That is less than half of Singapore’s $83,793, and also lower than countries such as South Korea ($36,757) and Japan ($40,799).

However, Malaysia’s GNI is still higher than countries or regions like Greece ($24,909) and Russia ($25,036).

GNI per capita PPP measures gross national income converted to international dollars using purchasing power parity rates, with one international dollar having the same purchasing power as US$1 has in the US economy, according to a definition by UNDP.

PPP refers to the total amount of goods and services that a single unit of a country’s currency can buy in another country, a definition by the World Bank says.

The annual index ranks 189 countries based on human development, which includes factors such as GNI per capita, life expectancy at birth, average years of education, and employment to population ratio.

Released on Monday (Dec 9), the index scored Malaysia 0.804, putting the country in the Very High Human Development category, and at 61st place globally.

The top three countries in the global Human Development Index (HDI) rankings are Norway (0.954), Switzerland (0.946), and Ireland (0.942).

Only two other ASEAN countries were categorised as having very high human development, namely Singapore and Brunei – ranked 9th and 43rd respectively.

The top 20 on UNDP’s Human Development Index. A total of 62 countries were categorised under “very high human development”.
UNDP Human Development Report 2019

Malaysia is steadily improving

According to the report, Malaysia had one of the lowest life expectancies in the “very high human development” category: 76 years at birth.

This is below the category’s average of 79.5 years at birth, but above the global average of 72.6 years at birth.

The top three countries with the highest life expectancy are Hong Kong at 84.7 years, Japan at 84.5 years, and Switzerland at 83.6 years.

As for education, Malaysians received 10.2 years of schooling on average, a number which has stagnated since 2014 and barely increased since 2011.

More than six in 10 Malaysians aged over 15 are currently employed, higher than countries such as Australia and the US, but lower than countries like Singapore and Indonesia.

Additionally, 81.2 per cent of Malaysians use the internet.

Global inequality gap widening

This year’s report highlighted the “more profound” inequalities that are widening the gap between countries with very high human development and those with low human development.

In countries with a very high human development, fixed broadband service subscriptions are growing 15 times faster than in countries with low human development. Some countries in the low human development category include Afghanistan, Nigeria and Papua New Guinea.

The proportion of adults with tertiary education is growing more than six times faster as well.

In addition, the report stated that children born in the 2000s in countries with different human development lead starkly different lives as “circumstances almost entirely beyond their control have already set them on different and unequal paths”.

By age 20, only 3 per cent of children born in low human development countries will be in higher education, a large contrast to the 55 per cent of children in very high human development countries.

Some 17 per cent of children born in low human development countries would have died before age 20, compared with just one per cent of children born in very high human development countries.
UNDP Human Development Report 2019

The report also stated that the unequal global distributions in education, health and living standards are stymieing countries’ progress. Through these sectors, 20 per cent of human development progress was lost through inequalities in 2018.

Beyond these sectors, society is also becoming more vulnerable to new forms of inequalities arising from technological transformation and climate change.

Addressing inequality needs to go beyond income

The UNDP recommended in its report policies that go beyond addressing income inequality, including: early childhood and lifelong investment; productivity; and public spending and fair taxation.

Since inequality can begin before birth and amplified into adulthood, the UNDP said policies must also address issues at or before birth, including investing in young children’s learning, health and nutrition.

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