Govt sets targeted approach to eradicate hardcore poverty

Mustapa says 50 localities throughout the country will be targeted using tailor-made strategies based on the unique features of each locality


MALAYSIA will adopt a holistic and targeted approach to eradicate hardcore poverty in about fty localities throughout Malaysia, said Minister in the Prime Minister’s Department Datuk Seri Mustapa Mohamed.

He said the strategies will be tailor-made based on the unique features of each locality.

“In March next year, we are going to be working hand-in-hand with state governments, civil society organisations and the private sector in implementing hardcore poverty eradication programmes in the poorest localities of Malaysia.

“The government is committed to eliminate hardcore poverty by 2025. For this purpose, a Poverty Unit under the Economic Planning Unit has been set up to coordinate policy matters on poverty alleviation at the national level,” he said in his official remark during the launch of the 25th Malaysia Economic Monitor “Staying Afloat” yesterday.

Fiscal policy has been expansionary in the past two years and will continue to be so, he said, in order to ensure the wellbeing of Keluarga Malaysia.

“As much as the government’s short-term policies are important to drive our economic recovery in 2022, it is equally critical that we put in place medium-and longer-term institutional reforms to strengthen our resilience.

“Certainly, one of the hardest-hit groups during the pandemic has been vulnerable households. These include firstly, those in lower-income groups, most of whom are in the micro, small and medium enterprise sector; secondly, those who have lost their jobs; thirdly, those with few or no assets or savings to fall back on; and fourthly, informal workers who are not adequately covered by social safety nets,” he added.

Malaysia aspires to be a high-income nation by 2025. According to the World Bank’s projections, the country is expected to exceed the threshold that defines a high-income economy at some point between 2024 and 2028.

Mustapa said one issue to be addressed in order to achieve high-income status is low wages. A Department of Statistics Malaysia (DoSM) survey on wages and salaries in July 2021 showed that the percentage of workers in the country earning less than RM3,000 is now at about 65%.

He said there was also a DoSM study on university graduates in July 2021 showing a worrying trend of declining number of graduates working in the skilled category. The skilled category refers to professional and managerial positions.

“About 31% of graduates are still working in semi-skilled and low-skilled categories. In the 12th Malaysia Plan, our target is to improve the share of compensation of employees (CE) to GDP from 37.2% to about 40%. If we want to achieve this target, we need more and more Malaysians working in the skilled category. CE refers to the total gross wages paid by employers to employees as a percentage of our GDP.

“Two important strategies to achieve our goal of 40% CE is by, firstly, enhancing Malaysia’s position as a quality investment destination and secondly, improving the marketability of our technical and vocational education and training graduates to meet the demands of industry.”