This is the age-old problem in economic theory - the difference between the value of an item and its market value.
The famous example is that air and water are precious for human life but they are practically free (not wholly true for fresh air and mineral water). Diamonds are practically useless but they fetch high market prices. As Adam Smith concluded (I think), the market price of an item does not reflect its use-value but rather the interplay between supply and demand. Air and water have little market value because it is ubiquitous whereas diamonds are expensive because of there limited supply and insanely huge demand.
When we look at the issue of the distribution of income and wealth, we have to be careful to realise that we are talking about market prices or market values.
Land in the urban centres cost more than land in the rural areas because there is a limited supply of land in town and there is a huge supply of land ready to be offloaded onto the market from the vast hinterland as we go into the rural areas. If all the rural folks try to flock to the urban areas in search for high paying jobs, then there will be an escalation in the cost of urban properties - which is another way of saying that the real incomes in the urban centres will fall, and hence the problem of the rising cost of living.
If urbanites want to live a decent life, they must try to raise their incomes which means they have to work much much harder in order to produce services for which there is demand. Urbanites cannot be arrogant about things for they are mere slaves to the way of life that they have chosen to live, although they must be arrogant when they have made it because of the immense suffering - physically and emotionally - that they must go through to struggle and fight and then to be able to emerge out and land on the shore of financial independence.
Rural folks generally have great assets of land - which if valued at the nearby urban prices would amount to a lot - and their major concern is only income for their daily needs and possibly the education of their children if they do not intend to work on the land. The great wealth of rural families can be passed on to the next generation which, I am sure, as development expands, will mean great wealth for their future generations. It is precisely because of the likelihood or the desire to hold onto the land and to keep that wealth within the community and to pass it on within the community that land-rich families eschew unnecessary consumption in order to save for the long-term wealth of the family.
I know there is a great desire by many Bumiputera families (or some family members) to sell their land immediately so that they "do not have to work so hard anymore and have money to spend." This is the story of the Malay reserve land and that of Kampong Baru in KL. Of course, if you are not putting the property into the market or if you are restricting the market to a smaller section of society, then you should not expect the full market price as can be got elsewhere there is a scarcity of supply and ample demand (fueled by generous bank loans).
As a way of reducing the income and wealth gap between the urban centres and the rural areas, I like the strategy of developing economic corridors in the various states so that more new urban centres can be created in existing rural areas, thereby raising the market price of the land and labour in remote areas. This is now not a popular view. The World Bank thinks that the fastest way for a nation to climb the income ladder is for developing nations to concentrate their scarce resources on the existing urban centres and intensify economic activities there, on the argument of creating more value from synergy. This is true, but this only means that the gaps in income and wealth distribution will widen. While greater inequalities may be argued to be an inevitable evil of development, it does not have to be the case. I prefer a more spread-out and dispersed development strategy geography so that there will be less depletion of human resources from the rural areas and faster development of the rural areas.
We all know that rapid economic development is pursued at great social and cultural costs, for this is real transformation of society and the economy. In developing nations like Malaysia, we obviously have a very strong cultural sense of ourselves for each of different communities - and it is this great cohesion that is at once a strength and a weakness. Closely knit families with strong parental guidance tend to create also material success and sustain it, whereas families with weak cultural and social sense will have to struggle to find alternate new pathways to rise above their respective situations. However, strong traditional families are at best good at maintain the status quo, and may not lend themselves to be the agents of change and high incomes. The cultural and communal pull is too strong. This is where enlightened education sets the society free, not that education is needed for entrepreneurship (although literacy is definitely needed for communication) but the courage to explore new frontiers with courage and confidence. The ability to think and the ability to think for oneself are assets to anyone who have them and to those who are fortunate to be their neighbours.
Future success can only be assured when it is properly nurtured. Affirmative actions are desirable, but these are double-edged swords especially when they are used to change the dynamics of the game. We are talking about changing the game for one group to compete with another group. Adaptation will come in to ensure continued success and that adaptation creates a new game which the old affirmative actions may be inadequate to deal with. The affirmative actions themselves, if badly designed, may probably accentuate the discrepancy by weakening the affirmed group and toughening up the unhelped group. My point is that one cannot be too careful in designing policy instruments. Numbers are not facts, and they need careful analysis and understanding or they can become dangerous.
There is a need to be clear about real value and market prices. I believe our policies tend to focus on market values rather than creating real values that will last.