KUALA LUMPUR, June 4 — Malaysians needing just US$485,000 (RM2.2 million) in net worth to rank as the country’s richest 1 percent was not necessarily an unfavorable situation, according to economists.
Universiti Malaya honorary professor at the Faculty of Business and Economics Nazari Ismail told Malay Mail that it could be interpreted as the country with a lower cost of living compared to others with higher thresholds such as Singapore where it has a net worth of US$3, 5 million cost being in the same percentile.
“In those countries, for example, houses are expensive. You have to have a lot of money to live in a bungalow.
“In Malaysia, even a schoolteacher can afford to live in a bungalow if you live a little further from big cities,” he said, using the term bungalow typically used here to describe detached houses or to describe large houses.
In comparison, a primary school teacher in Singapore could only afford a small apartment, he added.
Another reason for Singapore’s higher threshold was that the island nation welcomed wealthy elites from all over the world to buy real estate and live there, he said.
“As a result, property prices in Singapore are beyond the reach of ordinary Singaporeans,” he said.
This has led ordinary Singaporeans to be priced out of comfortable and spacious housing, he said.
“So there is no reason to make our country as prosperous as Singapore or Switzerland. It will only lead to a higher cost of living for most ordinary people,” he said.
Singapore-based economist and investment director of the Financial Alliance, Sani Hamid, held similar views.
A higher top 1 percent threshold was one result of higher gross domestic product (GDP) per capita, he explained.
For example, Singapore’s GDP per capita is about $70,000, while Malaysia’s is about $11,000, he said.
“So from that premise, you already know that the wealth of individuals in Singapore will certainly be much higher than in Malaysia,” he said, adding that this was reflected in the 1 percent threshold.
There was little point in comparing the top 1 percent of different countries, he said.
“I think everyone would agree that it would be pretty good to be the top 1 percent earner in any country, at any level of economic growth,” he said.
Aside from that, one should also consider other less tangible indicators such as happiness and stress, he said.
On Tuesday, real estate consultancy Knight Frank’s latest edition of its The Wealth Report (Wealth Sizing Model) revealed that Malaysians needed just $485,000 in net worth to be categorized as part of the country’s wealthiest 1 percent.