By Aidila Razak
Performance Management and Delivery Unit (Pemandu) said that growth in gross national income (GNI) per capita in US dollars from 2009 to 2012 has been revised down to 41 percent from 49 percent previously.
However, it said that it arose following the adoption of a new accounting method, rather than a deliberate attempt to fudge numbers. It said the changes will also not affect the unit’s projection that high income status, which is US$15,000 per capita, will be reached by 2018.
Idris Jala
“The 41 percent growth is still phenomenal in the space of three years,” Pemandu CEO and Minister in the Prime Minister’s Department Idris Jala told KiniBiz. “ What is important is that at current growth rates we are on track to achieve developed country status by 2020 if not earlier.”
He said that there was no intent by Pemandu to show better figures by deliberately using a low base for 2009. “When we used the GNI per capita figure for 2009 in 2010, that was the correct figure. We had no way of knowing that the figure would change three years later.
“The final arbiter is whether we achieve high income by 2020 and current projections show we will, whichever figure we use, provided growth continues at current rates. But the world is not linear, and if conditions change, you can’t hold us to that.”
Pemandu said the change in figures was due to the adoption of the latest version of the United Nations Systems of National Accounting (SNA 2008) in 2012 which had pushed the GNI per capita up for 2009 from US$6700 to US$7059.
“In early 2012, the country adopted the SNA 2008, which changed several things, including the inclusion of research and development expenditure as investment.
“Because of this the 2009 GNI number grew to US$7059. We were basing our figures on the Finance Ministry quarterly reports, and by 2012 (when the SNA 2008 was adopted), their report no longer showed the 2009 numbers,” it said.
The government has been under fire for making up “fictional” figures for income growth, following Prime Minister Najib Abdul Razak’s claim that income went up 49 percent on a television show last week.
Why ETP uses US dollars
Critics have also questioned why the ETP is measuring income growth in US dollars, instead of the currency Malaysians earn and spend everyday–the ringgit. In ringgit terms, GNI growth from 2009 to 2012 is a more modest 24 percent.
Pemandu said that income is measured in US dollars instead of ringgit as the ETP is benchmarked against the World Bank standard for a high income nation.
“It cuts both ways. When you use US dollars and your ringgit appreciates, you benefit from it, but if it depreciates you suffer from it.
“The last couple of years, it has been appreciating. So we enjoy the growth rate in US dollar terms. We have to be consistent (with the currency used for measurements),” it said.
Appreciation of the ringgit against the US dollars also have a wealth effect on consumers, as a significant portion of imported goods, including food items like wheat, are traded using US dollars.
It added that those questioning the GNI per capita growth rates should also remember that GNI per capita is also a product of population growth.
It said that next to GNI, the GNI per capita growth numbers indicates that GNI growth has outpaced population growth by four times.
GNI is a measure of the income of a country in current price terms, including net income from overseas, whereas real gross domestic product is an economic measure of output within the country keeping prices constant. GNI is considered a better measure of income.
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