Govt to adopt MPI to measure poverty

It will include calculations that will capture whether a person living in poverty has sufficient income to afford 3 basic needs, says PM


THE federal administration has opted for a new rubric to better gauge the country’s poverty level, after a United Nations (UN) human rights expert in August found that official figures did not reflect conditions on the ground.

Prime Minister (PM) Tun Dr Mahathir Mohamad (picture) said the government will now refer to the multidimensional poverty index (MPI) to effectively measure poverty, which forms the basis of Putrajaya’s newly launched needs-based policy referred to as Shared Prosperity Vision 2030 (SPV2030).

Dr Mahathir said the MPI will include calculations that will capture whether a person living in poverty has sufficient income to afford three basic needs namely food, clothes and shelter.

“This will determine whether a person is poor or not. This MPI is what we will use to measure the poverty rate in our communities today,” he told the Dewan Rakyat yesterday.

The Langkawi MP was responding to a question by Datuk Seri Anwar Ibrahim (PH-Port Dickson) who asked about the measures taken by the government on a report by UN special rapporteur on extreme poverty and human rights Prof Philip Alston.

Alston said Malaysia still has “significant poverty” as its actual poverty rate is at 15% and not 0.4% as suggested by government data. Local economists have since backed Alston’s claim, describing the country’s measurement of poverty incidence as outdated, irrelevant and antiquated.

This included the PM’s economic advisor, Dr Muhammed Abdul Khalid, who in a commentary, argued that Putrajaya’s use of the poverty line index (PLI) — defined in absolute terms as a monthly income of RM980 for Peninsular Malaysia, RM1,180 for Sabah and RM1,020 for Sarawak — was impractical.

In comparison, he said Palestine and Zimbabwe — countries with a GDP size that is one-tenth of Malaysia — have higher PLI levels.

Dr Mahathir said the government’s use of the household income survey (HIS) was based on standards set by the UN Statistic Division. He said HIS is still relevant and reliable at the macro-assessment level.

However, he said at the micro level — referring to states and districts — HIS statistics should be used cautiously as it does not reflect actual patterns, needs and demographics of households due to sampling oversights.

In line with SPV2030, Dr Mahathir said the upcoming Budget 2020 will see priorities given to districts and states with visible poverty rates. “We don’t have sufficient funds for development, therefore we need to prioritise,” he said.

On a separate matter, Dr Mahathir said the government can consider private sector proposals to reduce highway tolls as it is incapable of eliminating toll charges immediately due to the high expense involved and increasing debt.

In a statement issued by the PM’s Office yesterday, Dr Mahathir said studies show that the government has to spend billions of ringgit to immediately take over tolled highways.

“The government needs time to eliminate tolls. However, toll payment reduction can be shouldered. If there are private entities, which can reduce tolls, their suggestions can be considered,” he said.

Dr Mahathir also stood by his earlier statement in which he said the government has never promised to eliminate highway tolls — contrary to popular belief.

Quoting the Pakatan Harapan (PH) manifesto, Dr Mahathir said PH promised a review of all highway concession agreements and will attempt to negotiate to take over all tolled highway concession at a reasonable price, with the ultimate aim of eliminating toll collection in stages.