Das Kapital

Recent Malaysia Budget 2013 is basically a continuation of the practice over the past few years; Malaysian Prime Minister Najib Razak pledged to boost help for the poor to cushion the impact of inflation by promising it'll reduce the impact of rising costs on Malaysians.

Our poverty level looks good on paper but woefully ignores reality. Statistics are supposed to accurately measure our economic environment, so that in this case, pin-point policies to deal with poverty can be crafted.

An income that is necessary to buy a group of foods that would meet the nutritional needs of the members of a household. The income is also to meet other basic necessities such as clothing, rent, fuel and utilities, transport and communications, medical expenses, education and recreation.

Take a quick glance at Job Street’s salary report a fresh graduate is only able to earn about RM2500 per month. With living costs having risen exponentially in recent years, how are we expected to take out a decent living with these figures?

Today considering our public transportation system is still yet to improve; a fresh graduate must own a transportation to commute to work. This situation requires Malaysian to choose between buying a car or a house first, and many have committed to own a car first. Petrol costs RM 1.80 per litre and most of the roads are toll roads. It will cost easily around RM 300 for a average home to office.

It will easily cost them around two years of their salary to put down deposit for a local car. If we take into consideration their living expenses and other commitments, it may take them even longer to settle their car loan. Hence, it has left them with very little option but to take the maximum car loan financing tenure of nine years.

For young graduate in Malaysia, buying a car is more expensive both in real terms, and in terms of debt-to-income ratio due to the purchase price of the car are expensive because of tax . In reality, it means they have to either purchase a car with lower price tag or commit to a longer term loan to own a car, which cost them the opportunity of owning a home.

When Malaysian spend a substantial amount of their salary paying for a car, they are left with little savings to own a house, and their house affordability level decreases over the years as prices rise due to inflation.

Unfortunately by the time they can afford to purchase a home, be it three, five or nine years later, the price of a property would have escalated due to among other things, inflation, higher construction cost and higher land prices.

For example, an apartment today costs roughly about RM250,000 — translating to a R25,000 deposits. With an average salary of RM3,000, one may perhaps save RM500 per month (after deducting expenses) and take up to 50 months to save up for an apartment. That’s 4 years! How would young married couples cope with such costs?

Since most middle-class Malaysians earn within this average, it’s easy to see how one would be hard-pressed to afford a house, especially since property prices continue to skyrocket.

While it may be safe to say that their salary would also increase, generally speaking the increment may not aligned to the rate of inflation. In most cases, owning a home will be a huge debt lasting 30 to 40 years of housing loan repayment.

It should be in the government’s vision to ensure that Malaysian is paid well enough to buy a house and feed themselves. This is not even scratching the surface of the problem as there are many other Malaysians who earn less than RM3, 000 or even RM1, 500 for that matter.

Without stringent enforcement and specific policies to reduce income inequality and increase equality of opportunities, efforts to meet the 2020 target would be futile if not everyone can benefit from the increased economic growth.

Note:- Das Kapital, by Karl Marx, is a critical analysis of capitalism as political economy, meant to reveal the economic laws of the capitalist mode of production, and how it is the precursor of the socialist mode of production.

My Big Fat Malay Wedding

A couple of days ago, I read an interesting news paper article about how much dowry is enough? What is the proper 'rate' to give? What would be appropriate?

A wedding should basically held up as a lodestar of bringing families together and of realizing a couple's dreams, but the "happily ever after" myth that permeates Malay weddings was powerfully dispelled.

Most couples want to begin their married life auspiciously and free from the problems. However, it is not uncommon to hear about married couples who go into debt just to get married.

Behind the happy images of the big fat Malay weddings getting progressively bigger and fatter lurks the unpalatable truth of dowry and wedding cost. Dowry is a social evil in which the families of Malay brides can make such a big demands of the groom. Sometimes, the parents of the couple may expect a grand wedding celebration. The parents may want to show off to the relatives or friends and therefore expect no less than a grand wedding feast.

Bride price, also known as bride wealth, bride token, is an amount of money or property or wealth paid by the groom or his family to the parents of a woman upon the marriage of their daughter to the groom. (Compare Indian dowry, which is paid to the groom, or used by the bride to help establish the new household, and dower, which is property settled on the bride herself by the groom at the time of marriage.) The agreed bride price may or may not intended to reflect the perceived value of the girl or young woman.

Malay-Muslim tradition in Malaysia dictates two kinds of wedding dowries — the “mas kahwin” and “hantaran perkahwinan”.  

Mas kahwin prices in Malaysia are fixed by local state religious departments. It is compulsory in Islam for a man to pay dowry to the woman on entering marriage. 

Hantaran, on the other hand, is a tradition and technically optional. Hantaran was normally use by bride family to support their wedding functions. These bride prices are increasingly seeing young Malay couples heading to the wedding dais shackled by debt as they struggle to deal with the rising living costs

The sharp increase in prices of essential commodities, vegetables and food products has made catering costlier. Despite skyrocketing prices, relatives of the couple make specific demands about the delicacies to be served.

Due to the expensive rent of marriage halls and food costs, now days there will be a joint function. A wedding is supposed to be a once in a lifetime occasion. The couple may have no problem about spending whatever amount it takes to organize a special and a memorable wedding for themselves. They may decide to invite all their friends and relatives and hence need to accommodate a lot of people.They may decide to do their banquet at a hall instead of under a canopy in front of the house.

Yet this crazy spending for just one day, by two people, who are obviously smitten to even think logical; taking vows to spend the rest of their lives in wedded bliss…

A couple may decide to get married thinking they have sufficient savings fund to cover all the necessary expenses. However, they may fall for the various marketing gimmicks giving them the promises of the perfect wedding. The couple may end up paying extras for the wedding photos, the banquet, wedding rings or jewellery, clothing, preliminary celebration, honeymoon, etc. If they had a budget in the beginning, they may end up being over budget in the end.

The above are common scenarios on how a couple can get into debt when they get married. There are several ways for them to acquire the money and some of the common route is to use their credit cards, borrow from their parents or relatives, borrow from friends, take out a personal loan, etc. Depending on how big is their wedding debt, it may take years for them to repay or settle it.

I am a cynical realist who believes extravagant romanticism is only for the foolhardy. While you guys battle out the pros and cons of a big fat wedding, I am still trying to plan my own simple wedding.  

Note: Even to initial cost to hire Foreign Maid from Indonesia & Philippine in Malaysia now at RM 5000. What about having a wife?