Tuesday, December 2, 2014

Incidence of Poverty in Malaysia

The government insists poverty in Malaysia has massively declined. But not everybody agrees with this assessment.
The Malaysia Human Development Report 2013 commissioned by the United Nations Development Programme maintains otherwise.
At the end of the day, it all depends on how poverty is measured. Putrajaya relies on absolute poverty figures, but UNDP says the data does not reflect reality. The latter’s perspective is that poverty is better measured against what households earn in general, rather than by a fixed minimum level.
The said report measures relative poverty, which sets the threshold at half the national median income, and finds the number of Malaysians in this category has been rising since 2007, with one in five households considered relatively poor.
Absolute poverty, on the other hand, is a measurement based on the declared poverty line. In Peninsular Malaysia, this is fixed at RM763, RM912 in Sarawak and RM1,048 in Sabah. But the relative poverty line in 2012 was RM1,813, or half of the household median income of RM3,626.
I would argue that many years ago, we could justify the use of the absolute approach to poverty. But considering the country’s progress in terms of access to technology, healthcare, education, housing and so on – it makes more sense to apply the relative poverty line because Malaysians need access to even more services beyond just the most basic needs.
Clinging on to the absolute approach insults the government and the country because in truth, we have made tremendous strides to reach a good level of economic development – although I cannot say the same for social and political progress.
After all, absolute poverty is when people do not have enough money to meet the basic threshold that is needed for survival. People who fall below this line do not have enough money to buy food, shelter, clothing, et cetera that is needed for survival.
I may even relent and be kind so as to accept the government’s claim to have successfully reduced absolute poverty to 1.7% in 2012, from 49.3% in 1970. But the UNDP report argues that relative poverty is “a better approach to assess inclusiveness”.
Relative poverty is when people are poor when compared to others around them, but may still have enough money to survive. Consider the urban poor – more often than not, they remain hidden. They are unseen. They are invisible.
The report – prepared by Malaysian researchers and released on November 25, 2014 – notes that in 2007, 17.4% of Malaysians were in relative poverty, and this increased to 19.3% in 2009 and 20% in 2012. It did acknowledge that “absolute poverty has decreased but relative poverty has emerged as a growing concern…”.
Already, the Pakatan Rakyat-led Selangor government has raised the state's poverty income threshold to RM1,500 to reflect the higher cost of living in the state. This was made in the state's budget for 2015, which sees close to 30% of Selangor's five million residents classified as poor. At least, Selangor is facing up to the poverty issue.
Yesterday, I was in Mercu UEM in KL Sentral to attend the KL Advanced Toastmasters meeting. I did my CC speech #5 titled “Confident Women” (Round 5). I was also an Evaluator for an Ice Breaker speech. Overall, it was a good meeting. An 8 over 10 score.


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