Wednesday, August 01, 2012

Buying Power of Malaysians, Singaporeans, South Africans

A comment by Isaac Nair 

Lets look at the buying power of Malaysians currently, compared to that of South Africa, a country that is on the rise economically and was inducted into the BRICS (Brazil, Russia, India, China and now S. Africa) group of developing nations, and also Singapore, our closest neighbour.
Below is the world average salaries for the 3 countries we're looking at:
World Average Salary (USD) : $1480.00.
Malaysia : RM2070 (USD) $958.
Singapore: SGD3880 (USD) $2622.
South Africa: R10200 (USD) $1830.

To purchase an unlocked 32GB iPhone 4s, RM2699 (Price in USD749 or RM2284).
1. Malaysian must spend 1.3x their average salary.
2. Singaporeans (iPhone 4s SGD 1088) only spend less than 0.3x of their average salary.
3. South Africans (iPhone 4s R8000) only spend 0.8x of their own salary.
*South Africa had a high import tariff on the iPhone 4

To purchase a Honda Civic 1.8M Sedan (Price in USD15,955 or RM48,662) - Ignoring sales and automotive or protectionism taxes in all countries. OTR price for all countries in brackets.
1. Malaysians must spend 23.5x of their average salary (real price RM119,00 or 58x).
2. Singaporeans (Honda Civic SGD19,784) only spend 5.1x of their average salary (real price SGD190,000 or 49x).
3. South Africans (Honda Civic R130,000) only spend 12.7x their average salary (real price R220,000 or 21x).

Malaysia had a head-start in terms of economic pace because the industrial revolution started quite early, around 1980-81. We've had a nearly 20 year gap over South Africa, yet now their world average salary is now double of ours. If you check the source links I've provided below, you'll notice that Botswana, Jamaica, former war-torn Serbia, Hungary and Chile has higher average salaries than us.

Also note that Foxconn recently chose Indonesia over Malaysia when deciding for a location to build their USD1 Billion manufacturing facility which would provide about 1,000,000 jobs over 2 decades. Their reason? Indonesia had a more steady growth rate of 6% year-on-year compared to Malaysia's 4% average.