KUALA LUMPUR – In bridging the gap of inequality in terms of income and social security, the focus should be on lifting the bottom level of the social stratification, while at the same time advancing the growth prospects of the higher echelons.
“I would be averse to simply try to control inequality by capping off the top (earners) but we should allow them to continue to grow and we want to lift the bottom,” economist Professor Danny Quah said during a forum at the International Social Security Conference 2018 today.
Also the Dean of Lee Kuan Yew School of Public Policy, National University of Singapore, Quah said that the bottom level can be assisted through education, improving human capital and facilitating productivity, thus ensuring that resources are well allocated.
He admitted that implementation is an issue though, as it would require proper governance, which is also transparent and accountable to ensure that things get done.
Quah said a self-correcting mechanism should be put in place to ensure that policy makers are able to deliver what they are accountable for.
As far as allocation of resources are concerned, Quah said economic growth is the process of increasing the resources available, and Malaysia as a country is far from having reached its potential. He said the focus should be in creating a sustainable human capital base rather than securing jobs.
Quah noted that different societies need to understand the dynamics of their own society while policy makers will have to listen and respond to their stakeholders.
“You can have inequality even when there is no poverty and you (can) have the situation where there is complete equality and everybody is in poverty. So it is the wrong thing to look at just (on) inequality,” he told SunBiz.
Additionally, Quah said that the world has actually become much more equal and the leaders must not let global policy be hijacked by those countries such as in the advanced Western countries, where inequality has become a problem due to the government mismanagement.
“We need to be very careful about how sometimes the kind of stories that the world tells about (social) inequality, are actually the wrong stories,” he added, noting that globalisation and technology are the two main factors that widen inequality.
Another speaker, founding director of the University of Oxford’s Oxford Martin School, Professor Ian Goldin said economic growth, growth in income and wealth, and proper taxation system is vital in ensuring the allocation of resources is done fairly.
He also noted that while the government cannot create jobs, which should be the goal of the private sector, the government can however create a platform through frameworks.