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PROBLEMS FACED BY MALAYSIAN GOVERNMENT IN CALCULATING

NATIONAL INCOME STATISTICS

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Problems Faced by the Malaysian government in Calculating National Income Statistics

The Malaysian economy is growing at an alarming, leading to the need to calculate the

national income statistics to aid in planning development. Regardless of the economy's growth,

the Malaysian government faces the colossal pressure of calculating the national income

statistics due to its income inequality (Dogan, 200, p. 54). The lack of equal distribution of

resources contributes to a large gap between the poor and the rich in Malaysia. The situation

leads to a challenging task in calculating the income task since the results will not reflect the

economic growth but poverty and low production among the MaThe wealth distribution

inequality also contributes to the laxity in the issuance of the income data by the public since

they feel the government is not performing its tasks in the realization of equality Dogan, 200, p.

54). The scenario has contributed to the wrong statistics on national income statistics.

The recent decline in the oil-related revenue has contributed to low returns collected for

investments in the areas and businesses that can lead to high national income. Since Malaysia is

a fast-growing economy, it needs all the revenues collected to improve the economy and improve

the development plans. The government is grappling with the reduced revenues collected from

the sales of the natural resource (Koen et al. 2017. P. 39). The situation has led to a lack of

uniformity in the calculation of the national income statistics since a high number of layoffs and

the reduced income from the business organizations and other private investment have

influenced the uniformity in the calculation of the national income. For instance, in 2015, the low

global oil prices reduced the GDP by 2% (Koen et al. 2017. P. 39). The situation led to a decline

in the Malaysian national tax base. It further contributed to the fall in the number of businesses

benefiting directly from better oil prices. The situation led to the loss of jobs and reduced

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national income, affecting the statistics on the Malaysian national income due to the lack of

uniformity in the government's income and other private investors.

Foreign investment has been weaker in Malaysia after the financial crisis that occurred in

Asia. It changed the government's approach to salvage the situation since the more fragile the

foreign investment, the lower the revenues collected, and the lower the economic development.

The undeveloped economy translated to low productivity and low revenues by the government.

The government will find it challenging to calculate the national income statistics since the labor

force's income will not be in tandem with the revenue collection projection (Das & Onn, 2014, p.

16). The national income statistics will not be robust if the foreign investments are weaker since

the government depends on the export capital to calculate the national income and ascertain a

balanced economy. The statistics will not reflect on the perceived fast economic growth

witnessed in Malaysia due to the innovative ideas and the increase in natural resources sales. The

lack of proper uniformity and weak foreign investments affects the calculation of Malaysian

national income statistics.

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References List

Das, S.B., and Onn, L.P., 2014. The Economy of Malaysia. Problems, Present, Prospects.

Institute of Southeast Asian Studies Journal.

Dogan, E., 2006. Government Expenditure And National Income: Causality Tests For Five South East Asian

Countries. International Business & Economics Research Journal. Volume 5, Number 10.

Koem, V., Asada, H., Nixon, S., Rahuman, M.R.H., and Arif, A.Z.M. MALAYSIA'S ECONOMIC SUCCESS

STORY AND CHALLENGES ECONOMICS DEPARTMENT WORKING PAPERS No. 1369.

http://www.oecd.org/economy/outlook/Malaysia-s-economic-success-story-and-challenges.pdf

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