JUST by revising the national poverty line income (PLI), the number of households categorised as “poor” increased by a staggering 16 times. Malaysia’s new PLI is now RM2,208 for a monthly household from RM980. As such 405,441 households last year were marked as poor compared to 24,700 in 2016 .
The new numbers are supposed to be bad news. But the truth is, it is a more realistic figure under current circumstances. No household technically can live with RM980 a month today. The PLI has not been revised since 2006. The cost of living since then has spiralled and inflation, despite official denial over the years, have impacted upon the livelihood of especially, the so-labelled “urban poor.”
The increase in minimum wage from RM1,000 in 2006 to RM1,100 in 2019 is seen as too little too late. Many believe it has little or no impact on local workers. It is not immediately known how the lower end of the income spectrum has benefited from the RM100 increase in minimum wage.
When the United Nations Special Rapporteur on Extreme Poverty and Human Rights, Professor Philip Alston summarised his findings in August last year, he highlighted the need for Malaysia to revise its PLI. He wasn’t too kind about how Malaysia managed its data. He believed the government was concealing information. He recommended the government to adopt “a data transparency policy.”
It created quite a commotion among some policy makers at the time. But common sense prevailed, in fact to the government’s credit, there is a new desire to address the issue of poverty in a more transparent manner. Thus the revision of the PLI which the government claimed was initiated even before Alston’s visit.
Minister at the Prime Minister’s Department, Datuk Seri Mustapa Mohamed was quick in pointing out that if the new methodology had been used in 2016, the poverty rate would have been 7.6% involving 525,743 households. The government’s eradication programmes must have worked for the poverty level has dropped by 2% from a high of 7.6% to 5.6% last year.
Numbers don’t lie but numbers can be cooked up to our advantage. We have to acknowledge poverty is not merely a concept, it is real. And poverty must be addressed accordingly. Poverty is race blind, therefore policies to eradicate poverty must move beyond racial imperatives.
Old perceptions about race and poverty must be debunked. Not all Malays are poor, not all Chinese are rich. There is abject poverty among all races. While it is true the majority of those in the B40 household bracket are Bumiputera (73.6%), but there are a substantial number of Chinese and Indians in that category too (17.5% and 7.5% respectively).
The issue of disparity of income among the races is real, but the disparity among intra-race is even more worrying. In the case of the Malays, the income disparity within the race is more pronounced in comparison to disparity with other races. A little noticed report by Khazanah Research Institute in 2014 pointed out to the fact that there are more Bumiputera households earning RM10,000 a month than Chinese households. There are 280,000 Bumiputera households in that category compared to 254,000 Chinese households and 45,000 Indian households. The rise in Bumiputera income is largely the result of education that has helped unshackle the yoke of poverty over the last many decades since the implementation of the New Economic Policy (NEP).
The PLI update in the Statistic Department’s methodology is the best thing that has happened on the poverty front. As Mustapa pointed out there is a need for the government agencies and state governments to formulate their programmes and policies accordingly. He also called for the need to review all policies in relation to poverty eradication and social assistance in view of the new PLI.
According to him “by using accurate statistics’ the government will be able to formulate strategies and policies and to design “a more appropriate, dynamic and pragmatic approach” for each target group.
We have yet to ascertain the real impact of the Covid-19 pandemic on the economy. Whatever gains accrued over the years might even be partially wiped out. The global economy will have an impact on us as a major trading nation. We will be reeling from the aftermath of the pandemic years after the dust settles.
Our people might even be poorer than before. But the fight to eradicate poverty must go on.
Johan Jaaffar was a journalist, editor and for some years chairman of a media company, and is passionate about all things literature and the arts. And a diehard rugby fan. The views expressed here are entirely his own.
The new numbers are supposed to be bad news. But the truth is, it is a more realistic figure under current circumstances. No household technically can live with RM980 a month today. The PLI has not been revised since 2006. The cost of living since then has spiralled and inflation, despite official denial over the years, have impacted upon the livelihood of especially, the so-labelled “urban poor.”
The increase in minimum wage from RM1,000 in 2006 to RM1,100 in 2019 is seen as too little too late. Many believe it has little or no impact on local workers. It is not immediately known how the lower end of the income spectrum has benefited from the RM100 increase in minimum wage.
When the United Nations Special Rapporteur on Extreme Poverty and Human Rights, Professor Philip Alston summarised his findings in August last year, he highlighted the need for Malaysia to revise its PLI. He wasn’t too kind about how Malaysia managed its data. He believed the government was concealing information. He recommended the government to adopt “a data transparency policy.”
It created quite a commotion among some policy makers at the time. But common sense prevailed, in fact to the government’s credit, there is a new desire to address the issue of poverty in a more transparent manner. Thus the revision of the PLI which the government claimed was initiated even before Alston’s visit.
Minister at the Prime Minister’s Department, Datuk Seri Mustapa Mohamed was quick in pointing out that if the new methodology had been used in 2016, the poverty rate would have been 7.6% involving 525,743 households. The government’s eradication programmes must have worked for the poverty level has dropped by 2% from a high of 7.6% to 5.6% last year.
Numbers don’t lie but numbers can be cooked up to our advantage. We have to acknowledge poverty is not merely a concept, it is real. And poverty must be addressed accordingly. Poverty is race blind, therefore policies to eradicate poverty must move beyond racial imperatives.
Old perceptions about race and poverty must be debunked. Not all Malays are poor, not all Chinese are rich. There is abject poverty among all races. While it is true the majority of those in the B40 household bracket are Bumiputera (73.6%), but there are a substantial number of Chinese and Indians in that category too (17.5% and 7.5% respectively).
The issue of disparity of income among the races is real, but the disparity among intra-race is even more worrying. In the case of the Malays, the income disparity within the race is more pronounced in comparison to disparity with other races. A little noticed report by Khazanah Research Institute in 2014 pointed out to the fact that there are more Bumiputera households earning RM10,000 a month than Chinese households. There are 280,000 Bumiputera households in that category compared to 254,000 Chinese households and 45,000 Indian households. The rise in Bumiputera income is largely the result of education that has helped unshackle the yoke of poverty over the last many decades since the implementation of the New Economic Policy (NEP).
The PLI update in the Statistic Department’s methodology is the best thing that has happened on the poverty front. As Mustapa pointed out there is a need for the government agencies and state governments to formulate their programmes and policies accordingly. He also called for the need to review all policies in relation to poverty eradication and social assistance in view of the new PLI.
According to him “by using accurate statistics’ the government will be able to formulate strategies and policies and to design “a more appropriate, dynamic and pragmatic approach” for each target group.
We have yet to ascertain the real impact of the Covid-19 pandemic on the economy. Whatever gains accrued over the years might even be partially wiped out. The global economy will have an impact on us as a major trading nation. We will be reeling from the aftermath of the pandemic years after the dust settles.
Our people might even be poorer than before. But the fight to eradicate poverty must go on.
Johan Jaaffar was a journalist, editor and for some years chairman of a media company, and is passionate about all things literature and the arts. And a diehard rugby fan. The views expressed here are entirely his own.
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