Monday, November 3, 2008

Indian marginalisation clear-and-present

H Lee Oct 29, 08 12:06pm

So Home Minister Syed Hamid Albar – in a decision, as he puts it, of self-sacrifice for the sake of protecting society – has banned Hindraf.

Similar home ministerial valour must have been present when he chose to detain Raja Petra, Teresa Kok, Tan Hoon Cheng and hundreds of others under the ISA.

Many Malaysians have expressed their outrage at the latest cruel and callous act of repression against a civil group which has highlighted the continuing plight of marginalised Malaysian Indians.

I would like to examine an aspect: the assertion that Malaysian Indians are not marginalised and are actually doing better than Bumiputera Malaysians, and thus, they have no grounds to feel aggrieved, let alone angry. This is a cynical and specious claim.
We should first take note of the often ignored fact that the Malaysian Indian community is diverse, stratified and complex. Like any other.
Some are rich, some are part of the middle class, some are poor; some are posited in the mainstream, some are at the margins – and some are beyond the margins, trapped in urban squalor. The imperative question is whether the concerns of the Indian poor are being addressed by our government's attitudes and policies.

But the ruling regime would rather treat groups as monolithic blobs, then go about brandishing statistics to preempt debate - and stamp the lowly back into their place.
And so, in dismissing Hindraf's cause, Syed Hamid invoked the reality of high proportions of Indians among registered legal professionals (21.4 percent) and among doctors (18.4 percent), and the ratio of Indian to Bumiputera household incomes, of… 1.20. That's right, according to 2007 household income survey data, Indian households on average have 20 percent more income than Bumiputera households.

Is there something wrong with these figures? Why has the message of Hindraf resonated when official data paint opposing images of social mobility and nice averages?
There is no need to question the numbers, but every need to handle them responsibly, within context and in recognition of their limited scope. These bits of information provide no basis to conclude that all of the community is doing well and should therefore shut up and get on with their happy lives.

In fact, we do have evidence that Malaysians Indians are struggling as much as others to earn a decent living.

Averaging numbers

Of course there are many Indian lawyers and doctors – who's not cognisant of that? But there are far more Indian labourers, factory workers, and others at the low reaches of the labour market.

It is highly probable that the household income of the Indian community is propped up by the high earnings of professionals and managers.
Meagre family incomes of displaced agricultural workers and urban elementary workers get shrouded in the process of averaging the incomes of all Indian families.
Consider some changes that have taken place in the past decade or so.
In 1995, 17.7 percent of employed Indians worked as agricultural labor, while 8.7 percent were in professional and technical occupations.

By 2005, only 4.9 percent of employed Indians were agricultural workers, but 20.1 percent worked as professionals and technicians.
Albeit rather cursorily, we gain some impression here of developments at two ends of the socio-economic hierarchy: the continuous urbanisation of a low-skilled former plantation workforce; a steadily growing presence in highly qualified jobs providing middle class living standards.

In what sort of jobs are most Indians working? Within communities, Indians registered the highest proportion of persons classified as production workers.
In 2005, 45.8 percent of employed Indians fell in this category, compared to 33.8 percent Chinese and 34.1 percent Bumiputera.

Due to the unfree state of information in this land, the most we can do with officially disclosed statistics is make deductions and inferences such as these.

We are still left with a knowledge gap.

However, a study by Branko Milanovic, a World Bank researcher and renowned scholar of global inequality, helps fill the void¹.
He analysed Malaysia's household income data of 1997. This is from the national survey that the Statistics Department conducts twice in five years, from which all the inequality measurements we know are calculated.
One difference with the official accounts is that Milanovic focussed on individual earnings (wages, salaries and bonuses) instead of household income (the sum of household members' earnings, property income and remittances) . His findings are therefore more reflective of the earnings capacity of Malaysians in the labour market.

The housewife factor
The study analyses inequality more generally, but in the process finds something very striking: in 1997, the ratio of Indian to Bumiputera individual earnings was 0.98.
The official figure for Indian: Bumiputera household income was 1.41. In other words, the average earnings of individual Indians was basically the same as the average earnings of individual Bumiputera, even though average household incomes were quite unequal.
How might this be possible?

In terms of the gap between individual earnings inequality and household income inequality, we could postulate that combined earnings of Indians, especially in households with both spouses in professional jobs, raised their income to levels significantly higher than Bumiputera households.
This is a guess, and that's as far as we can go with available data.
What's not a guess is this objective report that average individual earnings of Indians and Bumiputeras were equal in 1997.

In 2007, with an Indian-to-Bumiputer a household income ratio of 1.20, what might the inter-group earnings ratio look like? We don't know, but it is more than likely that the ratio is less than 1.20.

It is possible that earnings are on average close to equal, or that Indian earnings are less than Bumiputera earnings.

Consider recent data on the distribution of employed persons by occupation.
In 2005, with 45.8 percent of the total employed Indians engaged as production workers and 4.9 percent as agricultural workers, it is plausible that average individual earnings are on par with the average among employed Bumiputera, of whom 34.1 percent are production workers and 15.2 percent are agricultural workers.

These two low-paying occupational groups account for about 50 percent of employed persons of both race groups.
Again, we won't have a clear picture unless we have access to data and can engage in constructive discussion.

Hindraf has grounds

We have a clear enough picture, however, to affirm the plight of marginalised Indian households, whose tough circumstances in labour markets and poor living conditions are a shameful reality that cannot be garbed in middle-class statistics.
Hindraf has grounds for grievance – yes, even in the official data, if only we would take a more balanced and critical look.

And we could better understand this whole inequality thing, and devise fairer and more effective policies, if the ruling regime would release more information to our - um - knowledge society.
Resistance towards extending the same policies to members of the Indian community as currently provided to Bumiputera is partly predicated on official household income statistics.
But they give us an oversimplified and selective glimpse to a complex of problems.
It is high time to reevaluate the way we assess income and earnings and to aim assistance at the people who need or merit it most.

¹ Branko Milanovic (2006) "Inequality and Determinants of Earnings in Malaysia, 1984-97", in the Asian Economic Journal, 20(2).
H LEE is a postgraduate student in economics at the University of Massachusetts, Amherst.