Is There an Underside to Economic Growth ? A Mixed-Methods Analysis of Malaysia

This paper sheds light on a Malaysian paradox that may have lessons for the rest of the world. Despite high gross domestic product growth with concurrent sharp reductions in income poverty and inequality, there was widespread discontent in the country. The paper first documents various dimensions of the Malaysian “miracle” with diverse data. It then draws on qualitative, open-ended focus group discussions to go below the surface of the quantitative data to analyze how Malaysian citizens perceive these changes, the challenges they face, and their sources of discontent. The findings reveal a broad consensus that while material living standards have improved, they have been accompanied by an underside such as a large “imbalance” between income and expenses, a need to rely on dual incomes and multiple jobs, growing indebtedness, increased stress, and polarization across ethnic groups. The paper argues that the Malaysian paradox may reveal something more general about the underside of economic growth.