An economist has urged policymakers to shift their focus from chasing high-income nation benchmarks to building an economy centered on equal opportunity and freedom of choice. The economist cited the US as an example, highlighting its wide income inequality and technological complexity.
Instead of chasing benchmarks, policymakers should focus on an economy centered on equal opportunity and freedom of choice , said economist Geoffrey Williams. KUALA LUMPUR: Malaysia should focus on building a more equitable economy instead of pursuing the status of a high-income nation, says an economist.
Geoffrey Williams said the country’s long-standing ambition to become a high-income nation lacked meaningful economic value, and that the classification was largely a World Bank benchmark tied to eligibility for financial assistance.
“If Malaysia were to move into the high-income category under the World Bank, there would be no financial assistance, there would be no help at all. “So this is actually a taxonomy based on the type of assistance you can expect from the World Bank,” he said in a special lecture at the Universiti Malaya Economics Summit here today. Williams said high-income nations were defined by average income figures and did not reflect the actual financial position of ordinary Malaysians.
He cited the US as an example of a country considered high-income despite having wide income inequality, adding that it has one of the worst distributions of income across its population. Williams also questioned the push towards creating a more complex, technology-driven economy, saying governments were often unable to keep pace with technological developments. Instead of chasing benchmarks, he said, policymakers should focus on an economy centred on equal opportunity and freedom of choice.
He said added economic complexity was unnecessary if income targets could be achieved through simpler, more straightforward means.
“The aim of complexity has to be balanced with the aim of equity and the aim of reaching a target income across as many people as possible. “If the market works effectively, you get what you pay for. If you're happy with that, there's no reason for anyone to intervene,” he said.
Economic Value World Bank High-Income Nation Taxonomy Income Figures Ordinary Malaysians Technology-Driven Economy Inequality Complexity Equitable Economy Freedom Of Choice
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