Much political capital has been made by UMNO politicians on the Income Disparity Ratios between Chinese and Malays, to impress that because there is a significant disparity between Chinese and Malays, that there is justification for continuation of racial policies ie NEP, to continue giving privileges to Malays.

In the 12th August 2007 online version of utusan.com.my,
See link here:
http://tinyurl.com/2v36nl
“Jangan rasa bersalah bela agama, bangsa”

Mohd Khir Toyo was quoted as saying,

“‘‘Bagi setiap ringgit yang orang Melayu dapat, orang Cina dapat RM1.64 dan orang India RM1.30. Jurang pendapatan penduduk bandar dan luar bandar lagi lebar, hari ini saya difahamkan setiap ringgit orang luar bandar dapat, RM2.90 orang bandar dapat,’’ katanya.”

Simply using the figures provided by Mohd Khir Toyo, as in the news article above,
ie:
IDR of Malay:Chinese:Indian = 1: 1.64: 1.30
and
IDR Urban: Rural = 2.90 : 1
(I assume that the Urban Rural IDR is for ALL races in urban areas vs ALL in rural areas.)

From the second IDR statement, it is evident that
for every RM1.00 that a rural person makes, an urban person makes RM2.90.

I’m not sure why Khor Toyo wanted to highlight that figure of 2.90, but perhaps it was to highlight that the Chinese, being predominantly urban, made much more money than the poor rural folk. Perhaps it was also propaganda to impress upon the audience (UMNO Bahagian Batu Gajah) that there were NO rural Chinese, and therefore no poor Chinese?

However, imho, he may NOT have realised by highlighting this 2.90 figure, it serves to point out that the real disparity is NOT between Chinese and Malay, BUT instead between Urban Malay and Rural Malay!

Let’s take the following figures as basis for calculation:
http://en.wikipedia.org/wiki/Demographics_of_Malaysia

The html file can be saved as html and opened in MS Excel.
The actual numbers for population of ethnic groups and rural-urban groups can be calculated easily in an Excel,
deriving from the total state populations and percentages given.

Total Msia population: 23 million

Total Malay population: 15.25million
Total Chinese population: 6.01million
Total Indian population: 1.75million

The total rural population is about 8.87million,
and total urban population is about 14.47million.

From Khir Toyo’s impression, almost all the rural folk are Malays,
ie of the 15.25million Malays, 8.85million are Rural Malays, 6.40 million are Urban Malays.
(Means that there are as many Urban Malays as there are Chinese, who are almost all urban.)
(Assume also for calculation that ALL Indians are urban.)

From the above, for every RM1.00 which the Rural person makes, the Urban chap makes RM2.90.
That means that the total made in that year by ALL “Rural+Urban” persons would be
=(RM1 X 8.84million) + (RM2.90 X 14.47million)
= RM 50.82million

Using the same calculation, the total amount made by all races:
Total Malay + Total chinese + Total Indian
=(RM1 X 15.25million) + (RM1.64 X 6.01million) + (RM1.30 X1.75million)
=RM27.38million

SO THAT WE CAN COMPARE the inter ethnic IDR together with the rural-urban IDR,
we should change the base for the total amounts made by all the races, to be the same as that for rural-urban IDR
(this would NOT change the ratios):
Therefore, instead of RM1, the relative amounts made by each ethnic group is:
Malay RM1.87 (RM1.00 X 50.82/27.38)
Chinese RM3.07 (RM1.64 X 50.82/27.38)
Indian RM2.43 (RM1.30 X 50.82/27.38)

Put another way, the TOTAL amounts made by the different ethnic groups:
Total Malay = RM1.87 X 15.25million = RM28.30million
Total Chinese= RM3.07 X 6.01million = RM18.29million
Total Indian = RM2.43 X 1.75million = RM4.23million
(Total= RM50.82million)

HOWEVER, WE MUST REMEMBER THAT, IN THIS CALCULATION, the initial base amount for the “Rural-vs-Urban” calculation STILL STANDS, since we have already adjusted for it!
ie, if the total amount made is RM50.82million, the total amount made by the 8.84million Rural Malays is STILL RM8.84million.
{Rural Malays is just a subset of Total Malays}

HOW MUCH THEN, DO THE URBAN Malays MAKE?
Taking the total made by ALL Malays, ie RM28.30million, and subtracting RM8.84 million which the Rural Malays make,
would be how much the Urban Malays make.
THIS IS A WHOPPING RM19.46 million!
Which is more than what the urban Chinese make!

IN FACT, IF WE WERE TO DIVIDE THE RM19.46 million by the 6.40 million Urban Malay (Total Malay 15.25mil – Rural Malay 8.84mil = 6.40million Urban Malays),
they would be getting RM3.04!

That means that for every RM1 that a rural Bumiputera makes,
an Urban Bumiputera makes RM3.04!

So, WHAT IS THE BIG DEAL ABOUT THE CHINESE MAKING RM1.64 FOR EVERY RM1.00 WHICH THE MALAY MAKES?!

It is the difference between Urban and Rural which accounts for much of the disparity.

Of course, even amongst the Urban Bumiputera, I’m sure that there is a wide disparity – one single Datuk with an Istana of his own, will skew the income for maybe a hundred of his neighbours!

Let’s hope that the rakyat finally will see who is the bogeyman eating up his share of the economic pie.

Let us compare Urban Chinese with Urban Bumiputera, and not (urban) Chinese with ALL Bumiputera.
That would be an unfair comparison, as with any non-communist country, esp one which is rapidly developing, there is bound to be significant urban-rural income disparity.

To try to achieve Chinese-Bumiputera income equality would be an impossibility, unless ALL of the Bumiputeras become Urban!

You will note that, in the calculation above, an important assumption is made, on the basis that
“ALL Chinese are urban,
and ALL Rural are Malay.”
Obviously, this cannot be strictly true.
HOWEVER, it is my humble opinion that, even if the real figures are used (can anyone from the Statistics Dept provide them?), the greater disparity will still be more evident between Urban-Rural rather than between Chinese-Malay.

Therefore, using a Chinese-Malay disparity is spurious, even dishonest, because if we were to use Urban Malay-Rural Malay comparison, it will also show up a marked disparity.
Therefore, to continue to point to a Chinese-Malay disparity to justify Racial Policies, is plain dishonest.

There may still, however be a slight disparity between Urban Chinese and Urban Malay, but this should not be substantial enough to justify any major policies changes to correct it.