More needs to be done to alleviate poverty

A comprehensive social protection scheme needs to be established to systematically address the revised poverty rate


MORE should be done to tackle the issue of poverty in the country, former United Nations special rapporteur Philip Alston said.

Alston said the issue of poverty should be addressed more in the government’s 12th Malaysia Plan following the government’s revision of the new poverty rate from 0.4% to 5.6%.

According to Alston, the new poverty rate was still only one-third of that estimated by most independent analyses.

“Adjusting the line is a vital first step. The challenge now is to systematically address poverty by instituting a comprehensive social protection scheme and to provide greater data transparency in line with almost all democratic countries,” Alston said in a statement over the weekend.

Last week, the Statistics Department (DoSM) revised the national Poverty Line Income (PLI) from 0.4% in 2016 to 5.6% in 2019.

The national per capita income is RM45,000, to which the DoSM has determined a new PLI threshold at RM2,208.

The country’s poverty levels have also fallen in 2019 against the previous available figures three years ago.

It was reported on July 7 that the country has begun to work to change the PLI from the RM980 threshold formulated in 2005, when the national per capita income was RM20,000.

The department also reported the incidence of absolute poverty in both urban and rural areas has recorded a decrease to 3.8% and 12.4% respectively in 2019 due to the revision of national PLI.

Similarly, hardcore poverty had also registered to 0.4% last year against 0.6% in 2016.

DoSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin reported that both the mean income and median income had risen by 4.2% and 3.9% respectively, against the previous 6.2% and 6.6% recorded in 2016.

In terms of value, mean income in Malaysia stood at RM7,901 while the median was recorded at RM5,873 in 2019.

He said in terms of median household income, urban households reported an increase of 3.8% from RM5,860 in 2016 to RM6,561. “Similarly, median household income in rural areas also increased at a rate of 3.3% over the same period that is between RM3,471 to RM3,828,” he said in the report last Friday.

As for the mean household income, urban households income grew by 3.9% per year from RM7,671 to RM8,635 while the rural households was RM5,004 in 2019, which grew by 0.8% higher than the national level of 4.6%.

He added that Kuala Lumpur (KL) recorded the highest median income with RM10,549, followed by Putrajaya (RM9,983), Selangor (RM8,210), Labuan (RM6,726) and Johor (RM6,427).

“Putrajaya has the highest compounded annual growth rate of median income at 6.3% over the period of three years, 1.6 times higher than the national median growth rate of 3.9%.

“Eight other states that also exceeded the national median growth rate were Terengganu (5.6%), KL (5%), Kelantan (4.9%), Pulau Pinang (4.4%), Johor (4.3%), Selangor (4.3%), Labuan (4.2%) and Kedah (4.2%),” he said.

Federal states registered a mean income higher than the national level of RM7,901, as well as Selangor and Johor at RM10,827 and RM8,013 respectively while the state that has recorded the highest growth of mean income was Terengganu with 5.5%.

Mohd Uzir also added the survey findings show the income threshold for the B40 (bottom 40% income) group last year was at RM4,849 for 2.91 million households.

“The M40’s (middle 40% income) threshold involving 2.91 million households was between RM4,850 to RM10,959.

“In addition, there were 1.46 million households in the T20 (top 20% income) group with income more than RM10,960,” he said.

In terms of distribution, the T20 constituted 46.8% of total household income, while the M40 group had 37.2% and the B40 only covered 16% of total income.

Mohd Uzir also said that the mean monthly disposable income for households had risen to RM6,764 from RM5,928 recorded three years ago.

“Mean disposable income comprises 85.6% of total mean gross income,” he said.

However, despite the overall increase in income, the Gini ratio for gross income has increased to 0.407 from 0.399 in 2019, noting an overall rise in both urban and rural areas.

Over the period, the Gini coefficient in urban areas increased from 0.389 to 0.398 whereas the Gini coefficient in rural areas rose from 0.364 to 0.367.

The similar could be said for disposable income, whereby the nation’s ratio grew to 0.393 from 0.391.

Over the period, the Gini coefficient in urban areas increased from 0.380 to 0.385 while the Gini coefficient in rural areas decreased from 0.365 to 0.361.

As the monthly income increases, so did the percentage of basic amenities, whereby the percentage of occupied dwelling owned by households has increased to 76.9% from 76.3% in 2016, while rented dwellings increased to 19.8%.

However, the percentage of households living in quarters dropped to 3.3% as of last year.