May 7, 2021 House of Trust

FMT Article: Relook how Malaysia measures poverty, say academics at Urban Poverty Webinar

By Imran Ariff, Reporter of Free Malaysia Today

The way Malaysia measures poverty must be changed to take into account the urban poor and ensure that they aren’t left behind in aid and stimulus efforts.

In 2019, the department of statistics revised the national poverty line from a monthly household income of RM980 to RM2,208, in order to better account for sufficient food and essential needs, rather than setting the line based on the minimum needed for survival.

Malaysia also introduced the Multidimensional Poverty Index (MPI) in the 11th Malaysia Plan, which takes into account monetary and non-monetary aspects of deprivation such as sub-standard education, poor health and inadequate living conditions.

Speaking at a webinar organised by Bait Al-Amanah, Center for Market Education and Embassy of Belgium in Malaysia, Fatimah Kari of Universiti Malaya’s Centre for Civilisation Dialogue said that these measures in their current form are flawed as they lump the poor into broad groups that don’t take into account specific needs, which means aid efforts cannot be sufficiently targeted.

Webinar Poster

“In the last 44 years, we have revised the poverty line three times. This is where the problem is. Despite three revisions, you still find rampant poverty, and urban poverty is no exception.

“Policymakers will use the line to target who is poor, but it is not as easy as that.”

By using income as a metric, she said many are excluded from poverty eradication efforts even though they live in poverty-like conditions.

In developing the poverty line, she said the use of the Consumer Price Index should be replaced by the cost of living index to better reflect household expenditure.

For example, she said that during the pandemic, while the price of goods may not have increased significantly, the costs associated with increased food would have meant a boost in household spending.

In further developing Malaysia’s MPI, she said income should be excluded entirely, as it seems to contradict the intention of the index in measuring various factors associated with poverty.

Denison Jayasooria, a sociologist and research fellow at Universiti Kebangsaan Malaysia, said that there must be better distinction between urban and rural poor, as both communities have different needs and problems.

In rural areas, poverty may mean a lack of work, money or resources but it could be very different in urban centres.

“There is an understanding that in urban areas, if you are living in a one-room flat with five children, that is unacceptable. You would need three rooms, water and electricity, access to playgrounds and safety and working lifts if you are in a high rise.”

He said it must be understood that poverty is “relative” and thus the ways it is defined must reflect communities’ different needs.

Re-examining Urban Poverty Webinar Photo

*This article was published in Free Malaysia Today

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