Street that reflects island’s affluence

Published on: Sunday, February 23, 2020

By: Sohan Das

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Jalan Merdeka in early 1960s was usually lifeless but it now has branded shops. The lodging house is where the KFC is and the empty lot in a foreground is where the HSBC is now.

JALAN Merdeka in Labuan, previously Beach Street, which spans about a kilometre along the harbour was pretty lifeless in the early years.

It was a favourite spot for residents to walk aimlessly and land in one of the coffee shops to exchange gossips. Stevedores would also be waiting for ships to arrive.

But today it’s a different picture. At one end of the street is the impressive huge financial park complex, a five-star hotel and three banks.

There are franchise outlets such as Watson’s, Pizza Hut, KFC, Guardian and Sugar Bun. The impression is that Labuan has an affluent population. Needless to say, branded shops would not set up outlets in a locality that did not have purchasing power since the outlets depend very much on this factor for a profitable business.

Moreover, Labuan’s population is merely 80,000 (maybe 60,000 now). These are outlets that would not be regularly patronised by those who cannot afford.

But the unfortunate fact is it is only a thin layer of affluence; as many are poor.

Member of Parliament Datuk Rozman Isli highlighted this fact in a speech in Parliament on May 2015.

He said although Labuan’s per capita income was reported to be the highest in the country, Labuan also held the number one position in highest unemployment rate (7.8 per cent in 2016), highest cost of living, high mental-related cases and high squatter dwellings and the island is nearly 92sq km.

He noted more than 60 per cent of the population was living in B40 as could be partly seen from the fact that out of the 21,459 premises including houses and industries, about 16,000 households were eligible for BR1M aid and with more than one family sharing the same roof.

The high-income earners were mostly from the oil and gas, chemicals and financial services sectors and most of the top jobs were not handled by locals.

The (locals) occupied mostly the lower rung of employment earnings.

The other sad part was that 60 per cent of those in B40 bracket earned merely RM1,200 (in 2015) compared to RM2,900 in Peninsula Malaysia.

Former Bank Negara Governor Muhammad Ibrahim, during his visit here, made similar observations of Labuan two years ago. He said the gains in Labuan were not evenly distributed across the population and the income inequality was worrying.

At present the top 20 per cent were earning more than five times that the bottom 40 (B40) household groups and this high income inequality did not provide the local communities meaningful benefits. Also the rate of women workforce of the population was significantly low compared to the national average.

He suggested the offshore industry in Labuan which had benefited significantly from the island to give back as it was the duty of the regulators and industry players to advance the welfare of the local society through more inclusive economic development.

Recently, Labuan’s per capita income was also the subject in the Sunday Express Forum pages. A reader with the pen-name “Anak Labuan” blamed Labuan Corporation (the lead agency in Labuan) for development projects submitted to Putrajaya not being entertained because it gave the monthly per capita income of a family of two RM10,000 which is the highest compared to other States.

Such feedback had caused Putrajaya leaders to think that many in Labuan were talking with a “silver spoon” and the island did not deserve much economic support.

LC responded by saying that the statistics were used by the Department and was applicable to all the States. It assesed that the income did not reflect the real state in Labuan which basically, the per capita income stated in 2015 was RM58,577.

The definition of per capita income is the average amount of money earned by a person or family whichever is stated over a period of one year. Even if these updated figures are more than realistic in Labuan, the fact remains that only a small percentage of the working population is enjoying the carrot.