The implementation of the TPPA in Malaysia will further cause unequal wealth distribution, warns Jeyakumar Devaraj.
Just last week, Oxfam reported that “runaway inequality has created a world where 62 people own as much wealth as the poorest half of the world’s population – a figure that has fallen from 388 just five years ago”.
This over-concentration of wealth in the hands of the world’s richest is the main causes of poor aggregate demand and sluggish demand that is bedevilling the world economy, resulting in persistent recessionary tendencies and high levels of unemployment.
The high level of indebtedness of the bottom 90% of the world’s population is the reason why all the “quantitative easing” carried out by the US, Japan and other countries have not really spurred growth in the real economy but have only led to stock market rallies.
What the world needs is a fairer distribution of the word’s wealth. The percentage going to the top 1% has to be reduced and redirected to the pockets of the bottom 50% of the population.
This could take the form of:
- higher minimum wages for the world’s poor;
- the closure of tax havens so that the world’s richest can’t avoid taxes by hiding their wealth in off-shore accounts;
- legislation to limit transfer pricing that enables the 1% to repatriate their profits to tax havens;
- a better safety net funded by this increase in taxes on the richest 1%.
These measures will not only help re-distribute world income in a fairer manner but will also boost aggregate demand and create business opportunities and jobs for younger people all over the world.
The TPP agreement is going to do exactly the opposite. For the agreement is nothing but a corporate wish list. It gives big capital massive new “rights”:
- the right to invest in the 12 TPP member countries without any restriction, without requirements regarding technology transfer, local content, etc (Article 9.4, 9.9, 9.10);
- the right to repatriate its profits as it wishes; (Article 9.8);
- much stronger intellectual property protection which will lengthen the period when big capital will have a monopoly (Article 18.37, Article 18.50, Article 18.52, Article 18.77);
- the right to tender for government contracts;
- the outlawing of any form of government assistance to state-owned enterprises; and
- the right of big capital to use the ISDS provisions to sue any government that does anything that will affect the bottom-line of the foreign investor.
The TPP agreement strengthens the hand of the biggest corporations and will lead to a further concentration of wealth in the richest 1%.
This is precisely the opposite of what the world needs at this point in time.
Is the government being truthful?
The Malaysian public would remember that before the GST was introduced in May 2015, senior customs officers said that the overall increase in expenditure for families earning less than RM3,000 per month would only be 2.6% because of the many items excluded and because of the reduction of sales and service taxes from 10% to 6%. A government minister also quoted this figure.
But the reality is quite different. A DAP branch in Sungai Siput distributes 120 hampers each Deepavali. I help out a bit. In 2014, the cost of these 120 hampers was RM4,500. But last year, after GST, the cost of 120 hampers of identical items – rice, dhall, cooking oil, etc – came to RM5,300. This is 17.8% – not 2.6%!
The Malaysian public should check carefully before taking the government’s reassurances as true.
We have another two years before this agreement is ratified. The people still have an opportunity to stop this unfair economic agreement.
False information being given by Miti:
- Prices of medicine will not go up.
- Malaysian SMEs will not be affected adversely.
- Cumulative gain to the GDP in the first 10 years after signing.
- Malaysia will benefit as a whole.
- It will be easy to withdraw from the TPP agreement whenever we want.