National poverty line revised

PUTRAJAYA: Malaysia’s poverty line income (PLI) has been revised from a monthly household income of RM980 to RM2,208, thus pushing up the country’s poverty rate from 0.4% in 2016 to 5.6% last year.

The update in the Statistics Department’s methodology in computing the PLI came about as it had not undergone a review since 2005.

As such, the number of households now categorised as poor has increased from 24,700 in 2016 to 405,441 last year.

The new PLI was revealed during the presentation of the Household Income, Expenditure and Basic Amenities Survey 2019 report by Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin yesterday.

According to the report, the PLI review was done “to ensure that poverty measurement based on PLI is up to date and to accurately reflect the poverty situation”.

As a result of the increased PLI, the poverty rate is now at 5.6% (2019), up from 0.4% reported in 2016, which had used the 2005 methodology.

The 0.4% poverty rate reported in 2016 was criticised by former United Nations special rapporteur on extreme poverty and human rights Philip Alston as “misleadingly low and unrealistic”.

However, Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said if the latest PLI methodology is used to measure poverty rate in 2016, the percentage would be 7.6% or 525,743 households.

This means that the national poverty rate has dropped by 2% from 7.6% in 2016 to 5.6% last year.

“This clearly shows that programmes and initiatives to eradicate poverty by the government, with the backing of non-governmental organisations and private sectors, have yielded good results,” said Mustapa in a statement.

Mustapa said work to improve the PLI had begun since 2018, when the 11th Malaysia Plan mid-term review was tabled in Parliament that year.

“From then on, the government has been working on how to review the PLI methodology to better reflect the current needs, consumption patterns and demographics of every household, in line with the progress that the country has achieved so far.

“The study was carried out from March 2019 to June this year by the Economic Planning Unit in a combined effort with the Statistics Department, the Health Ministry as well as other ministries and agencies,” said Mustapa.

Mustapa urged all government agencies as well as state governments to take note of the 2019 PLI in formulating their programmes and policies.

He also called on them to review all policies related to poverty eradication and social assistance within the next five months.

“By using accurate statistics, the government will be able to formulate strategies and policies.

“It can also design a more appropriate, dynamic and pragmatic approach for each target group, including in preparing the 12th Malaysia Plan, 2021-2025 which will be presented early next year,” he said.