Poverty measurement and M'sian society: A need for a radical rethink?


  • Letters
  • Thursday, 24 Sep 2020

POVERTY measurement is a hot topic in Malaysia and the United Nations (UN) special rapporteur on poverty had criticised Malaysia for low poverty measurement.

In 2020, the government issued new poverty figures based on the Household Income Survey (HIS) 2019. While the methodology of poverty calculation is the same, the government adjusted the Poverty Line Income (PLI) from RM980 to RM2,280.

Of this, the Food PLI is RM1,038 and the non-food PLI is RM1,1170.

These changes were very much welcomed as it was a fairer capture of who is poor in Malaysian society from an income poverty measurement.

In Malaysia, we view the poor as very poor (absolute poverty), and another as not so poor but low income and the popular term has been the Bottom 40 (B40) income group.

The government gave a break down for the B10, B20, B30 and B40 using scaling income figures from the very poor to the poor to low income. Here, we can note that the level of deprivation and vulnerability can differ based on different levels in the income stratification.

Urban Poverty Measurement

The PLI measurements seem suitable for the very poor, especially in rural locations, as it is based on the very basic needs of food, clothing, shelter, transport and housing.

However, a very basic approach is inadequate to capture the deprivation experienced by urban poor families, especially living in affluent cities such as Kuala Lumpur, Petaling Jaya, Johor Baru, Ipoh, Penang, Kota Kinabalu or Kuching.

In most cases, there is a transference of poverty from rural to urban due to rural-urban migration.

Poverty researchers have suggested relative poverty measurement using the medium income measurement. Malaysia, too, accepts the concept of relative poverty and based on the HIS 2019, the medium income for urban areas is RM6,561 and therefore if we use the half-benchmark then urban poverty should be RM3,280, which is much higher.

This is a fairer indication and closer to the living wage indicators suggested by others. Urban poverty measurement must include new measurements to capture the deprivation and vulnerabilities in urban locations, capturing the new face of poverty which is very different from rural poverty.

Furthermore, the non-food PLI of RM1,1170 is inadequate in the urban context. One simple example is the rental rate for a low-cost flat in the urban areas. It is RM600 per month in the Desa Mentari flats in Petaling Jaya.

Not all the poor are living in public housing where the rental is about RM150 provided by the local authority or state government.

Therefore, the PLI is unable to capture the deprivation and vulnerability of the urban poor who form a major bulk of the informal sector undertaking micro businesses with very little or no savings or social protection.

Multi-dimensional Poverty Indicator (MPI)

In 2015, Malaysia, through the 11th Malaysia Plan, released the MPI which was most welcome as it moved beyond income measurement to include three other dimensions such as education, health and living standards.

With four dimensions, the government introduced 11 indicators for measurement. While these were very good and an enlargement of the measurement instrument, it failed again to capture urban poverty. The key in any measurements are the specific details one is reviewing.

The first dimension is Education with indicators such as year of schooling and school attendance.

The Health dimension also encompasses two indicators - access to health facilities and access to clean water supply.

The dimension with the most indicators is Living Standards with six areas - conditions of living quarters, number of bedrooms, toilet facilities, garbage collection facilities, transportation and access to basic communications tools.

The final dimension is Income, which looks at mean monthly household income.

The dimensions are good but we need to review the indicators or have different sets of indicators for different locations such as in the interior in Sabah and Sarawak and among the Orang Asli community in Peninsular Malaysia, a second MPI for the rural areas and a final MPI for urban areas, especially to capture the deprivation of the urban poor.

If we take education, we already know that years of schooling or school attendance are not the real issues but the quality of their achievements. How many pass and especially secure a credit at the SPM level in critical subjects like Bahasa Malaysia, English, Mathematics and Science or how many can pursue post-secondary education or training?

In 2015, Malaysia indicated 11 years of schooling as basic but in the HIS 2019 survey, they reduced it to just six years.

Having only primary education is no benchmark for Malaysia in 2020. It is sad we are benchmarking so low. We should compare with the developed nations in Asia, such as Singapore, South Korea and Japan.

Unlike the global MPI where for health, the indicator is on nutrition and infant mortality, we in Malaysia benchmarked lower to whether we are within 5km of a hospital and have access to clean water.

Malaysia, at its stage of development today in the post Millennium Development Goals (MDG) period, has moved beyond the status of a developing country.

We have a very good public health system. We must therefore aspire for higher targets. The Sustainable Development Goals, targets and indicators would be a better benchmark to assess the quality of life for all Malaysians at a much higher measurement scale.

Likewise, when we look at the six indicators for living standards, these are too basic for even the urban poor as we have moved from squatters to high-rise, low-cost housing as a basic standard.

The indicators must capture the new realities in Malaysia.

Suggestions for the 12th Malaysia Plan

Firstly, we must have more public engagement with all stakeholders on the poor and low income measurements including the indicators. This cannot just be an exercise of a civil service technical committee. Academic, civil society and grassroots community leaders must be part of this decision making process. A more transparent and open and engaging process must be instituted on the PLI and MPI.

Secondly, the PLI and MPI must not just be measuring tools but as a social assessment and intervention check list with well-trained social workers who could serve as the first point of contact and ensure they maintain a case file and follow through to see the families graduate from the programme and move on into the next level of social progress.

This case coordination should ideally be done by the social workers from the Social Welfare Department, but almost 50% of government workers are not trained social workers and therefore the role of CSO/NGOs could complement this gap.

Thirdly, the current e-Kasih database, which only captures income poverty, could also be enlarged to capture other dimensions, and also record the interventions and the progress of each family.

This must be an inter-agency, well-coordinated multi-dimensional intervention at the district level. The case conference and collective review is essential to track the progress.

Special training on the MPI as a tool for assessment and intervention must be introduced to every district-level agency staff in the relevant agencies including local CSO/NGOs who can complement the role of civil servants, especially the hand-holding and empowerment process.

> Denison Jayasooria is the co-chair of the Malaysian CSO-SDG Alliance and Associate Fellow at the Institute of Ethnic Studies, UKM

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