Op-Ed: Why Malaysia is leading the way in Asean for poverty eradication
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Op-Ed: Why Malaysia is leading the way in Asean for poverty eradication

GE14-alternative  SO MUCH – perhaps too much – has been said of late about matters pertaining to poverty incidence and income or wealth disparity in Malaysia.

These commentaries, even when looked at objectively, can shine through to even the most politically apathetic among us as mere rhetoric parroted by parties and groups intent on pushing forward an opposition-leaning agenda.

But cut through the noise, look at the facts and it becomes easier to see how and why Malaysia has become something of a model nation among its Southeast Asian peers for poverty eradication.

Let’s break it down:

In just a little over 60 years, Malaysia has transformed itself from a low-income agricultural-based economy to a nation on track towards attaining advanced economy status in two years’ time.

Among its achievements in national development, Malaysia lays claim to a pretty remarkable decline in poverty rates and remains an example of poverty reduction in Southeast Asia.

Why? Results and data have shown that efforts by the government to promote equitable opportunities for all and grow the local economy have achieved its desired results.

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The Central Intelligence Agency (CIA) World Factbook 2017, for example, has reported that Malaysia’s poverty rate is the lowest among Southeast Asian countries at 3.8 percent, as compared to Vietnam and Indonesia (11.3 percent), Thailand (12.6 percent), Laos (22 percent), the Philippines (25.2 percent) and Burma (32.7 percent).

The report also highlighted that Malaysia’s per capita gross domestic product stands at US$27,200, which is far better than those of its regional peers in Thailand (US$16,800), Indonesia (US$11,700), the Philippines (US$7,700), Vietnam (US$6,400), Burma (US$6,000) and Laos (US$5,700).

Meanwhile, arguments claiming Malaysia’s wealth gap or Gini coefficient has grown are not backed by fact. Quite the contrary, the country’s Gini Coefficient fell to 0.399 in 2016 from the 0.401 registered back in 2009. This puts Malaysia on much better footing than some advanced economies such as Singapore (0.458) and even Hong Kong (0.539).


Malaysia’s Gini Coefficient has improved over the years. Source: Shutterstock

According to one of the most recent reports by the World Bank, Malaysia has had an inclusive economic growth rate of about 7 percent annually for the past 25 years.

Since this growth has been inclusive, Malaysia has been successful at nearly eradicating poverty in the country.

Nonetheless, with the rise of new forms of poverty particularly in urban areas brought about by mass and rapid urban migration, there is admittedly still plenty to be done for Malaysia to attain its zero-poverty target.

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Wary of this, the government, together with various stakeholders, continues to build on its national policies and plans, implementing numerous initiatives to help raise the incomes of the urban poor and vulnerable groups.

These can be divided into two main categories: short-term and long-term.

Short-term initiatives

Aiming to address the immediate needs of the urban poor, numerous aids and subsidies have been made available, including:

Bantuan Rakyat 1Malaysia (BR1M)

Introduced in 2012, BR1M is part of the Economic Transformation Program (ETP) to assist low-income earners in Malaysia. The aid (a yearly, one-off cash payment of RM500) aims to reduce the cost of living amongst households with less than RM3,000 monthly income.

Other financial aids

Eligible single mothers, the disabled, senior citizens in need as well as low-income households are also provided with a number of financial aids to help ease their burden. These aids come under the purview of the Women, Family and Community Development Ministry and Department of Social Welfare Malaysia.

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Long-term initiatives

Long-term programmes are also in place to equip the underprivileged with the necessary knowledge, skills and/or capital to become more financially independent in the long run. These include:

1Malaysia Programme

A nationwide ongoing programme with multiple initiatives to help ease the burden of the poor. Initiatives include Kedai Rakyat 1 Malaysia, PR1MA affordable housing scheme, KAR1SMA social assistance programme and Program Susu 1 Malaysia for school-going children.

2 Years Exit Programme (2YEP)

Introduced in 2010, 2YEP provides temporary welfare assistance to eligible candidates over two years whilst helping them to build on their abilities. After 2 years, the candidate is expected to be able to live independently without relying on subsidies. To date, 2YEP has helped 122 hardcore poor people, including those with disabilities to come out of poverty.

Transformative Education Policy

The Government has long been committed to provide free education for all Malaysians, free textbooks in public schools, continuously transform the education system and provide scholarships to further boost the social and economic standing of all races. Malaysia is unique in the sense that it provides a vernacular education system (Chinese and Tamil) to cater to the specific needs various communities in the country.

Simply put, poverty eradication is a challenging and continuous process. And the simple fact is there are no quick fixes.

The hope is that these holistic programmes will serve to lift those concerned out of poverty, empower them and in time, help them become active participants in Malaysia’s economy.

* V. Paramasivam as a former director in a Malaysian think-tank focusing on national and international issues.

 ** This is the personal opinion of the writer and does not reflect the views of Asian Correspondent