Measure of poverty a conundrum not only for Malaysia

People collecting their BR1M vouchers in Penang.

It’s a challenge for many governments to reconcile the disconnect people feel between statistics and sentiment

THE recent release of the Economic Transformation Programme (ETP) Annual Report 2014 received its share of brickbats.

A few were aimed at me, in light of the commentary made that the rate of poverty in Malaysia for 2014 has been reduced to 1%. As a nation, we can be proud to have come far to stamp out poverty.

The World Bank in their latest overview of Malaysia reports says we have “succeeded in nearly eradicating poverty”.

The share of households living below the national poverty line (US$8.50 per day in 2012) fell from over 50% in the 1960s to less than 1% currently.

The Asian Development Bank declared that Malaysia recorded a 55.3% reduction on the percentage of population below poverty line income, the biggest reduction among Asean countries.

A survey conducted last year by the Department of Statistics Malaysia (DOSM) on a sample size of 81,634 households shares the preliminary data that only 1% of households were living under the Poverty Line Index (PLI) in 2014.

There’s data and then there’s sentiment, I get that.

There are also people who only want to see the negatives and get excited if the picture painted is one of doom.

So when we present data that demonstrates a different light and give hope there is improvement, they are dissatisfied and accusatory.

This conundrum is not isolated to Malaysia. It is the challenge for many governments to reconcile the disconnect people feel between statistics and sentiment. In this article, I hope to bridge the gap.

I would first want to clarify on statistics - how poverty rates are calculated in Malaysia.

Second, I want to assure all Malaysians that the Government is attuned to concerns and has been acting to eradicate poverty and uplift the quality of life under the Government Transformation Programme (GTP).

Back in 2009, we clearly defined PLI during the GTP 1.0 Roadmap. It was important to get this right to ensure assistance was channeled to the right people.

Our definition of poverty is aligned with the Organisation for Economic Co-operation and Development (OECD) and our measurement of income follows the standards of the United Nations Development Programme (UNDP).

There are categories of what is considered “poor”:

1. Extreme poverty. These are households which fail to earn enough to fulfil basic survival needs such as food, clothing and shelter. Households that fall into this category earn average monthly incomes of less than RM460 in Peninsular Malaysia, less than RM630 in Sabah and less than RM590 in Sarawak

2. Poor. These people fall short of certain standards of consumption which are deemed necessary to maintain ‘decency’ in society, for example, those who cannot afford healthcare and education.

Households with average monthly incomes of less than RM760 in Peninsular Malaysia, less than RM1,050 in Sabah and less than RM910 in Sarawak are defined as poor

Lifting household incomes

We also looked beyond the definition of “poor”, paying close attention in lifting household incomes of the bottom 40%. In the ETP Roadmap, we aimed to increase the mean monthly income from RM1,440 in 2009 to RM2,300 in 2015, as stated in the Tenth Malaysia Plan. According to data from the Finance Ministry, this target was met, ahead of schedule, in 2014 (RM2,312).

We have many good women and men from DOSM; the Women, Family and Community Development Ministry; Economic Planning Unit; state governments and agencies, as well as non-governmental organisations (NGOs) and corporates active in duty to actively reach out to those in need.

We have their names – all 168,483 of them – through the e-Kasih database which is frequently updated to further identify and focus on this target group. They can enroll in 1AZAM Programmes to equip themselves with the tools to help them break free from the clutches of poverty.

A collaborative effort which involves multiple ministries, agencies and NGOs, 1AZAM provides income generating initiatives.

In 2014, 24,646 of them managed to raise their income by RM300 within a timespan of three months. A total of 64,689 individuals have benefited from financial literacy programmes since 2013 to ensure they are able to better manage their finances.

There is still much to do as “one percent” translates to 300,000 people. I admit, the hardest frontline battle in Malaysia’s fight against poverty is to change mindsets of those in living in poverty.

Moving forward, our focus are four-pronged:

1. Lift the level of education amongst the poor. Through education, children in poor communities will stand a better chance to get better jobs or get into business

2. Strengthen social safety nets, enhance collaboration with NGOs and corporates, and provide empowerment programmes

3. Ensure income is redistributed to uplift those in poverty through BR1M for the bottom 40%

4. Institutionalise appropriate polices which promote economic development

Every man, woman, youth and child throughout Malaysia must benefit from the country’s transformation. Government alone cannot do it. It calls for the collaboration of people of conscience and goodwill to protect and uplift the poor. That’s the measure of our success as a nation.

Datuk Sri Idris Jala is CEO of Pemandu and Minister in the Prime Minister’s Department. Fair and reasonable comments are most welcome at

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