Global Development Initiative to alleviate poverty in Malaysia

In a world that has recently experienced enormous challenges, the Global Development Initiative (GDI) has emerged as a ray of hope and a driving force behind global development cooperation. GDI, a potent vehicle for promoting global development and eradicating poverty, was introduced by China.

President Xi Jinping proposed the GDI at the General Debate of the 76th Session of the United Nations (UN) General Assembly. One of GDI's top priorities for collaboration is the reduction of poverty. Global poverty reduction has gained significant momentum because of China's GDI. China has established a US$4bil Global

Development and South-South Cooperation Fund as well as will shortly establish a US$10bil special fund to support the execution of the GDI.

According to Collins Dictionary, the main definition of poverty is the lack of access to resources necessary to enjoy the most basic levels of existence. As a result, many nations, including Malaysia, have made it a top priority to end poverty.

The pandemic is causing suffering around the world, with many people dying from or relapsing into poverty.

From 3.9% in 2019 to 4.5% in 2022, Malaysia's urban population's rate of poverty increased. However, the percentage of rural residents living in poverty dropped from 12.4% to 12.0% in 2022.

Social assistance programmes have nominally concentrated on households in the B40 category. As a result, the claim that such targeting has been "both too narrow and too wide" is frequently made.

Therefore, there is still room for improvement to reduce poverty. The 12th Malaysian Plan (RMK12) prioritises rural development.

Because rural areas make up 75% of the nation's total land area, the country will have difficulty closing the urban-rural divide.

Poor human capital capability, poor income and unattractive work possibilities, inadequate rural basic infrastructure and other amenities, and low productivity are some of the essential factors associated with rural development.

The urban poor are more susceptible to exploitation due to their lack of education and skills. Many workers are vulnerable to abusive bosses because they are unaware of their rights as workers or where to turn for assistance.

The major obstacle to promoting the role of the private sector in reducing poverty includes enhancing the supportive environment for business investment and improving the investment climate.

Malaysia continues to offer a more favourable environment that encourages both the commercial sector and NGOs to increase their efforts to help the underprivileged.

The private sector will continue to help the government build infrastructure and affordable homes for the poor and lower-income groups in urban regions.

The government has announced several interventions to combat poverty, including the Unity Package prepaid mobile Internet plan, various subsidies for paddy farmers and smallholders, and the Rahmah Cash Aid, which will provide nearly RM8bil to about nine million recipients.

The Malaysian Government had approved a national budgetary commitment of US$215mil (RM1bil) to speed up poverty eradication initiatives in the nation in 2023.

The programmes, among other things, aim to increase the income of more than 50,000 extremely poor households. Recipients will receive the necessary training, start-up money, and incentives for projects related to marketing, agriculture, and digitalisation. Implementing the

Shared Prosperity Vision 2030 would be challenging given the predicted rise in pension costs during the subsequent 10 years.

To pay back the money they withdrew during the previous two years from their Employee Provident Fund (EPF) deposits, individuals will need to work an extra four to six years.

The continuous practice of withdrawing EPF contributions, especially by lower-income and poorer groups, will significantly exacerbate the problem of inadequate retirement savings.

China and Malaysia will work together practically to reduce poverty. Malaysia is becoming more and more focused on producing research and development (R&D)-intensive parts for assembly in China.

The trends are in accordance with how international value chains have developed in response to regional comparative advantages. The assembly operations produce jobs for unskilled labour, who are primarily impoverished, consequently reducing poverty.

China qualifies as a major contributor to the assistance for trade programmes in Asean due to its successful track record in managing trade liberalisation to combat poverty.

According to the Higher Education Minister in Malaysia, Malaysia and China have a long history of peaceful bilateral cooperation in the fields of education and business.

The cooperation between industries in Malaysia and China plays a major role in providing work experience to many Technical and Vocational Education and Training (TVET) students and graduates. Malaysian TVET institutions under the GDI initiative are already working with Chinese partners including ZTE, Alibaba, and Huawei.

Malaysia has 1,295 institutions that deliver TVET programmes, including state skill centres, federal ministries, and commercial providers.

Malaysia is increasingly focusing on components that require a lot of R&D. The TVET education track has great potential to create a skilled workforce in connected industries to achieve the nation's socioeconomic goals.

Since 2008, International Science, Technology, and Innovation (ISTIC) for South-South Cooperation has operated under the direction of the United Nations Educational, Scientific and Cultural Organisation (Unesco).

Through more than 30 Science, Technology and Innovation (STI) Training Programmes with strategic partners and more than 1,000 participants from around 100 countries, ISTIC in Kuala Lumpur (ISTIC-KL) has so far aided South-South Cooperation. Through the extension of the terms of collaboration with the ISTIC-KL Malaysia has reaffirmed its commitment to South-South Cooperation.

These training programmes can strengthen the development of digital capabilities and close the digital bridge between China and Malaysia.

This will enhance coordinated digital and green transformation and development; and foster international cooperation on the growth of digital industries.

It also encourages the integration of digital technology and the real economy and empowers the transformation and modernisation of traditional industries with digital technology.

The training programmes support digital pandemic response and economic recovery and growth; and integrate digital and green transformation and development.

Utilising digital technology can help to encourage the eradication of poverty and cooperation in e-commerce for example help farmers use e-commerce to sell their products.

The Malaysia-China Digital Cooperation & Development Fund will invest RM1bil into digital technology sectors such as digital applications, industrial big data, advanced manufacturing technology, industrial technology, and other areas in Malaysia and

China. This cooperation can create additional regional and topical networks to reduce poverty. Malaysia and China should continue to intensify policy exchanges, experience sharing, and practical cooperation to increase global awareness issues.

Society and policymakers should have sound policies and a reliable system to end extreme poverty, address pandemic or conflict-induced poverty, and prevent relapse into poverty.

Dr. Cheong Jia Qi is a Senior Lecturer at University Malaysia Sabah; Research Fellow at Centre for Economic Development and Policy and Malaysian Inbound Tourism Association (MITA). The views expressed here are entirely the writer’s own.

The SEARCH Scholar Series is a social responsibility programme jointly organised by the Southeast Asia Research Centre for Humanities (SEARCH) and Tunku Abdul Rahman University of Management and Technology (TAR UMT), in conjunction with the 10-year anniversary of the Belt and Road Initiative.