Based on the 2019 methodology, the mean value of the national PLI is at RM2,208, which is within the bottom 10% of households

by NUR HANANI AZMAN/ pic by MUHD AMIN NAHARUL

HOUSEHOLDS in the urban area recorded a higher number of poverty cases despite its absolute and relative poverty rate is relatively lower compared to rural areas.

Khazanah Research Institute senior research associate Hawati Abdul Hamid said this is due to fast urbanisation rate growth in the country.

“We have to look at the differences of the city. For example, Baling in Kedah and Kuala Lumpur (KL) are both cities.

“But, the challenges faced by the people are different,” Hawati said in a webinar titled “T20, poverty of the city and socio-economy” yesterday.

A city, she added, is defined as an area with more than 10,000 population, making 70% of the population are currently considered as living in the city.

According to the Department of Statistics Malaysia, absolute poverty rate in Malaysia improved from 7.6% in 2016 to 5.6% in 2019 following the revision of the national poverty line income (PLI), according to current needs that emphasise on optimal food intake and quality non-food basic requirements.

Based on the 2019 methodology, the mean value of the national PLI is at RM2,208, which is within the bottom 10% of households.

The mean value of the PLI rose to RM2,208 per household per month in 2019 from RM980 previously.

The findings of the Household Income and Basic Amenities Survey also revealed that KL attained the highest median income of RM10,549 followed by Putrajaya (RM9,983), Selangor (RM8,210), Labuan (RM6,726), Johor (RM6,427), Penang (RM6,169) and Melaka (RM6,054).

For the period of 2016 to 2019, Putrajaya posted the highest average annual growth rate for median income with 6.3%, higher than the national median income growth (3.9%).

Institute for Research and Development of Policy (IRDP) programme manager Ammar Atan pointed out that there is a growing disparity as economic sharing by T20 (top 20% income group) increased to 46% in 2019, while M40 (medium 40%) reduced to 37.2% and B40 (bottom 40%) reduced to 16%.

“This indicates a clear inequality and the economic instability happens in the urban area compared to rural areas. We often hear of poverty cases among Bumiputera. However, Malaysia also currently witnesses a huge increase of economic instability among the Chinese and Indian too,” he added.

Ammar opined that Malaysia needs a specific policy in order to achieve contribution of compensation of employees to GDP more than 40%.

“This has been practised in South Korea which recorded more than 40% and gives impact to the people,” he said.