KUALA LUMPUR, Jan 4 — Prime Minister Tun Dr Mahathir Mohamad said growing income inequality between the rich and poor, particularly along urban and rural lines, could lead to class conflict and the re-emergence of communist and socialist ideologies.

Speaking at an event titled "Conversation : Legacies in Transition Reinvent or Retain” here today, Dr Mahathir said this was why he was promoting the shared prosperity concept in the hopes of creating a stable environment in which the country could continue growing.

"One of the reasons for communism and socialism was because the capitalist were making a lot of money. The workers were not making much money so there was a confrontation. 

"There was a revolution. And of course they began to impose communistic or socialistic ideas on their country and, in the end, the country’s growth became stunted,” he said in the event that was held in conjunction of Bank Rakyat’s Inaugural Integrity Forum 2020 today.

The prime minister did not specify which country he meant.

Dr Mahathir said the Pakatan Harapan’s Shared Prosperity Vision (SPV) 2030 expressly aims to close the income gap and to help rural Malaysians share in the development that has so far centred around urban centres.

The prime minister said this could encourage racial harmony.

"It so happens that rich and poor are related to different races and town and rural areas,” he explained.

As with many countries across the world, Malaysia is grappling with stagnant wages and sharply rising costs that have hurt Malaysians’ spending power.

In October, Dr Mahathir introduced the Shared Prosperity Vision (SPV) 2030, a ten-year plan to guide Malaysia towards achieving the goals set for Vision 2020, with an added emphasis on narrowing income gaps in the country.

Communism and socialism remain stigmatised in Malaysia due to the Malayan Emergency and ensuing Communist Insurgency.

The conflict officially ended with the 1989 Hat Yai Peace Accord but Malaysian police routinely investigate individuals and events that are linked to communism.