Posts Tagged ‘Poverty Eradication

17
Apr
18

Do the majority of us have enough money to live comfortably?

Do most of us have a living wage?

A QUESTION OF BUSINESS | Yes, we have almost eliminated poverty in Malaysia, but do the majority of us have enough money to live comfortably and play our role in society?

Government officials are fond of blithely saying that we have achieved much over the years because the incidence of poverty has fallen from 49.3% in 1970 to a mere 0.4% now. But that statement is rendered meaningless when what is defined as poor is revealed.

I had trouble finding what the poverty line for Malaysia is – no one seemed to really care what that was despite quoting widely the latest poverty rate which indicated that poverty had been virtually wiped out in Malaysia. Eventually, I found one from the Economic Transformation Programme website.

This defines the poor as people who “fall short of certain standards of consumption which are deemed necessary to maintain ‘decency’ in society, for example, those who cannot afford healthcare and education. Households with average monthly incomes of less than RM760 in Peninsular Malaysia, less than RM1,050 in Sabah and less than RM910 in Sarawak are defined as poor.” Let’s just round that off to a nice easy cut-off figure – RM800 per month in household income.

Now, I ask you, if a household earned RM801, would it no longer be poor? Certainly not. If the average household is considered to be four people is RM200 per person enough? With that, you have to provide food, shelter clothing, health costs, education, etc. By my reckoning, a household can be earning RM800 and still be extremely poor.

When we are talking about poverty levels, we are talking about subsistence. It would be more accurate to say, in the common usage of language that hardly anybody in Malaysia starves these days, not that they are not poor. We can’t even say that there is no malnutrition among many. Such statistics are simply and conveniently unavailable.

The question to ask these days is whether we have a living wage – enough income for us to have a meaningful life free from need and not whether we are above the poverty line – it really does not take much for a resource-rich country like Malaysia to eliminate poverty the way it is defined.

Unable to make ends meet

But is there a living wage for a vast majority of Malaysians? Unfortunately not as a study by the central bank, Bank Negara Malaysia (BNM), shows. This is a timely study, contained in BNM’s latest annual report, which indicates how, despite good economic growth, many people have to struggle to make ends meet.

The study talks about a living wage which centres around the concept of a ‘minimum acceptable’ standard of living which goes beyond being able to afford the necessities, such as food, clothing, and shelter.

“This standard of living should include the ability to meaningfully participate in society, the opportunity for personal and family development, and freedom from severe financial stress. At the same time, it should reflect needs, not wants. It does not capture the cost of lifestyle, which is the spending to fulfil the desires for an aspirational living standard.”

The study estimated a living wage for various categories of people in Kuala Lumpur by using a basket of goods and services, and deriving the costs of these (see table).

The table shows that in 2016 for a single working adult in Kuala Lumpur, who rents a room, eats out more often than cooks, drives less and uses more public transport, the minimum living wage is RM2,700 a month; a household income of RM4,500 a month for a couple without children; and RM6,500 a month for a couple with two children.

This bears out what many have suspected all along – that the poverty line income is irrelevant and that most people require a living wage which is far in excess of that. The RM6,500 minimum living wage for Kuala Lumpur is just over eight times the poverty line income for Malaysia! Even a graduate who on employment gets about RM2,400 a month in Kuala Lumpur, gets a living wage below the minimum level.

According to the Statistics Department, the median household income (half of the households earn less than this) for Kuala Lumpur in 2016 was RM9,073 compared to the RM6,500 minimum living wage for KL calculated by the study.

That would indicate that a significant number of households live below this threshold. The BNM study indicated that up to 27% of KL households could be living below the minimum living wage level. It would be interesting to see the figures for the whole country as Kuala Lumpur is far more highly developed than the rest. Note also that the RM6,500 is higher than the Malaysian median household income of RM5,228 a month.

Low-wage policies

Clearly, any improvement in wage levels has to be accompanied by productivity improvements but this has been hampered by an adoption of low-wage economic policies exemplified by large imports of cheap labour as I pointed out in this article.

In the same annual report, BNM presents another study which indicates that a low-wage policy led to depressed wages and inhibited productivity improvements badly needed to support higher wages.

“Currently, while Malaysia has made progress on several fronts, there remains a broad reliance on low-cost production models that lean on low-skilled labour while keeping a lid on wages to maintain business margins. The relative ease of obtaining low-skilled foreign workers in Malaysia contributes to these tendencies,” it said.

“A prerequisite to achieving a high income and (becoming a) developed nation is the progression to a ‘high-productivity, high-income’ workforce. Fundamentally, Malaysia would benefit from a clear shift away from an economy that is input-based and dependent on cost suppression as a source of competitive strength, to one that competes on the quality of its labour force, technical skills and product offerings.

“Such a shift requires the implementation of well-aligned, coordinated and consistent public policies. These policies encompass talent development, research and development, and industrial upgrading initiatives. Importantly, these policies need to be coherent, well-communicated and mutually-reinforcing.”

Both studies indicate that if there is going to be further meaningful development in Malaysia, which includes as well a broad-based improvement in the living standards of most of the people, there needs to be major shift in policy-making and implementation by the government at all levels in furtherance of a competitive, competent economy based on high quality education and training.

Sadly, there is no indication that the current government is equipped, willing or able to make the necessary changes.

…more
Do most of us have a living wage?
5 April 2018 – malaysiakini

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04
Jan
17

Rising costs hit Malaysia’s urban poor the hardest, says World Bank

Rising costs hit Malaysia’s urban poor the hardest, says World Bank

POORER households are hardest hit by rising cost of living that has been compounded by a lack of affordable housing, according to The World Bank’s latest Malaysia Economic Monitor report.

The report said the build-up of inflationary pressures over the years had had a disproportionate impact on lower-income households, especially those in urban areas, who spend a larger proportion of their income on the goods and services that have recorded the most significant price increases.

It said household expenditure survey last year indicated a marked unevenness in the composition of household expenditure across income brackets, with households in the lowest-income deciles spending close to 40% of their expenditure on food, compared to about 25% among the highest-income deciles.

“As a result, the poorest households have been disproportionately affected by the build-up of inflationary pressures over the past years with higher relative increases in food prices ,” said the report, which was published last Thursday.

Rising costs had been more pronounced in urban areas, as food price inflation had been higher compared with rural areas. This had been further compounded by the persistent deterioration in the affordability of housing since 2012 due to undersupply of affordable homes.

The World Bank said the rising cost of living for low-income households underscored the need for better targeted social assistance measures to support the poorest households, particularly those residing in urban areas.

It said the government could fine-tune its Bantuan Rakyat 1Malaysia (BR1M), which currently makes no distinction between high-cost and low-cost areas, in terms of either income eligibility thresholds or benefit levels.

The World Bank warned that the “rapid increases” in real housing prices since 2008 could be a source of future instability.

Increases in housing prices could relax borrowing constraints and allow existing homeowners to increase consumption, thereby boosting the economy.

“However, the rapid increase in prices creates incentives for the construction of new properties, which could potentially lead to a burst in prices and an abrupt adjustment to economic activity,” the report said.

According to simulations conducted by the World Bank, Malaysia is projected to exceed the threshold that defines a high-income economy some time between 2020 and 2024.

The World Bank currently defines high-income economies as those whose gross national income (GNI) per capita stands at US$ 12,236 or more.

In 2017, Malaysia‘s average GNI per capita is estimated to stand at US$ 9,660, or US$ 2,576 short of the threshold.

The World Bank, however said, GNI does not holistically summarise a country’s overall level of development.

“In particular, GNI does not fully reflect the broader aspects of well-being, such as general health and environmental sustainability, which contribute towards the overall welfare of a country’s citizens, though it is often closely correlated with some of these dimensions.

“Nor does it capture the distribution of wealth and prosperity across geographical regions and segments of the population,” the report said. – December 17, 2017.

…more
Rising costs hit Malaysia’s urban poor the hardest, says World Bank
17 Dec 2017 – TMI

05
Jul
15

New look into poverty in Malaysia

New look into poverty in Malaysia – Lee Hwok Aun

Malaysia’s relentless reduction of poverty is a major chapter in its success story. The record is striking: the proportion of households classified as poor fell from 49.3% in 1970 to 12.4% in 1992, reaching a mere 1.7% in 2012.

By now, Malaysia has almost totally eradicated poverty, according to these official estimates.

We should be mindful, however, that these numbers have specific context and limitations.

They are referenced to an absolute poverty line income (PLI) – a level of household income considered sufficient for meeting basic needs, from food to clothing and shelter, as well as education, health, transportation and recreational expenses.

The poverty rate, which counts the poor as a percentage of the population, hinges on the PLI. Malaysia’s latest PLI of RM830 (as of 2012) per month for a family of four corresponds with a certain poverty rate – a low figure, since not many households earn that little.

If the PLI is RM1500, we get a higher poverty rate, because more households fall below that threshold.

Unsurprisingly, our poverty measurements are often greeted with incredulity. Is RM830 really adequate for a family of four to obtain their daily necessities (the line is higher for Sabah and Sarawak)?

Shifting consumption patterns and technology alter the composition of basic necessities, especially for urban residents, which now comprise 70% of Malaysia’s population. Is the existing poverty line truly identifying the poor and helping Malaysia keep track of its progress?

One obvious response would be to review the PLI. This will take some effort, but it is technically not difficult. The greater impediment, it seems, is more political: if recalculations raise the PLI, and consequently increase the poverty rate, this could disrupt the near poverty eradication so central to the Malaysian success story.

Well, that’s not entirely true. If we revise poverty estimations backwards in time, Malaysia will assuredly still trace out a declining poverty trend – though perhaps it will not be as impressively steep and probably hover at higher levels.

This absolutely can be done. Notably, Thailand comprehensively revised its poverty measurement, for the present and past, resulting in higher poverty rates across a few decades.

Its exercise in 2013 revised the poverty rate from 8.1% to 19.1% for 2009, and from 14.8% to 35.3% for 1996. Thus, it still produced an historical record of falling poverty.

The absolute poverty rate remains a powerfully simple, easily understood, and relevant measure, and it should be continually applied and refined.

However, the method has two further limitations that underscore the need to apply additional lenses and to expand the scope of how we identify and try to resolve poverty.

First, Malaysia’s development challenges increasingly revolve around exclusion and inequality, which are inadequately captured from the perspective of absolute poverty. Households at the lowest social strata are characterised less by being unable to buy food and shelter, more by being left behind in terms of wage and salary levels.

In other words, relative poverty grows in importance as a focus of analysis and policy making.

This type of shift toward greater emphasis on relative poverty has taken place in most high-income countries. The reference point is not a pre-determined poverty line income but current median household income – the household squarely in the middle, with half of the population earning more income and half earning less.

Households are considered relatively poor if their income is less than 50% (or other proportion, like 60%) of median household income. For instance, if median income is $3,000, households below $1,500 are considered relatively poor.

This measurement adds insight to the state of lower classes, by showing the extent they are being left behind. At the same time, we also find out about the middle classes, a key feature of more inclusive development.

…more
New look into poverty in Malaysia – Lee Hwok Aun
11 June 2015 – TMI

24
Aug
14

HIGH-COST or high-income nation by 2020?

The reality and hyperbole of high-income Malaysia by 2020

According to government efficiency agency chief Datuk Seri Idris Jala, Malaysia is on track to achieve its high-income target of US$15,000 (RM47,414) by 2020, if not sooner, as a result of the policies under the National Transformation Programme (NTP).

That is like Manchester United football team coach Louis Van Gaal predicting his team will win the English Premier League this year as a result of his player buys and tactics.

Or for that matter, Malaysia saying its football team will make it to the 2022 World Cup in Qatar.

Those are really targets, not reality until it happens. But Senator Jala, who heads the Performance Management and Delivery Unit (Pemandu), is fond of taking numbers to insist the Economic Transformation Programme (ETP) and Government Transformation Programme (GTP) is working to plan.

Jala said yesterday gross national income per capita had climbed steadily from US$7,059 (RM22,313) in 2009 to US$10,060 (RM31,799) in 2013, representing a 42.5% growth during the period.

In a statement yesterday, he said since the launch of the ETP in 2010, the areas under the National Key Results Area (NKRA) have generated a total of 1.3 million additional employment opportunities, where the ETP targets to create 3.3 million new jobs by 2020.

One would like to believe him. After all, under his leadership, flag carrier Malaysia Airlines booked profits but flew back into red ink after he left. Why? Didn’t his policies stick and work for the national airline?

Minister of International Trade and Industry Datuk Seri Mustapa Mohamed also said approved pipeline investment has been increasing year-on-year since 2010, surpassing the government’s annual investment target of RM148 billion under the 10th Malaysia Plan.

In 2011, approved investment stood at RM154.6 billion; in 2012, RM167.8 billion; and in 2013, RM216.5 billion.

That should be good news for many of us but it remains as headline figures. The reality on the ground is that not many Malaysians are having a share of the wealth or a rise in incomes.

Putrajaya is using the assumption that once US$15,000 is achieved as per capita income, Malaysia will be a high income nation. As simple as that? But per capita income is not a reliable indicator as only 30% of per capita income counts as income, the rest are booked as profits.

How can Malaysia even talk about a high income economy when a significant percentage of the local workforce cannot make ends meet and do not appear to have the capability of doing so anytime soon.

We have soup kitchens in the cities and programmes for affordable housing. We have direct cash aid. How does that gel with Malaysia well on its way to a high income nation status by 2020?

That is why even though the government announced the 6.4% growth in the last quarter, it had little impact on the wellbeing of ordinary Malaysians. It is just a statistic, a headline figure and nothing more.

Jala and Pemandu’s time has been punctuated by fantastic headline numbers and hyperbole but both do not reflect the real situation on the ground.

Malaysia is six years away from 2020 and the target for a high-income nation. Repeating it ad nauseam won’t help the cause or the people who don’t feel the money that Putrajaya says is in our pockets.

The reality for most Malaysians is Malaysia might just be a higher-cost nation by 2020 with perhaps a few more billionaires to make sure the hyperbole per capita figure looks just right. – August 24, 2014.

…more
The reality and hyperbole of high-income Malaysia by 2020
COMMENTARY BY THE MALAYSIAN INSIDER
24 August 2014 – TMI

24
Jul
14

Real poverty in Malaysia – 22.6%

Real Poverty
(Source:
SIA Infographics: Incidence of Poverty
24 April 201 – Rakyat Times)

14
Jul
14

Abject poverty in our land of plenty

The poverty of our minds – Cheryl Ann Fernando

Poverty. The kind that happens in a third-world country. The kind where we see children missing school because they need to work for a living. The kind where children in school are hungry because they did not have breakfast. The kind we forget is still happening in our own country.

I didn’t know what being poor meant until I became teacher in a rural school. One year into teaching and I thought I had seen it all. I’d encountered students who were too poor to come to school, students sharing uniforms because they could not afford to buy another pair, malnutrition and 13-year-olds with part time jobs to support their families – I thought I had seen it all. And then I met Alia.*

One morning, on her way to school, she fell from her bicycle. As I walked over to look at her wounds, she said, “Please don’t touch me, teacher.”

Alia’s hands were covered with sores and pus – every square inch of her hands were covered with sores. She didn’t want me to touch her because she thought it was contagious. After much questioning, she told me that she did not have a father and lived with her grandmother and mother, both of whom couldn’t work. They were supported by their uncle who worked in KL. She had no means to go the clinic and was waiting for her uncle to come back to take her. Meanwhile, she had been unable to use her left hand for about three weeks because of her sores.

Her story bothered me the entire day. My fellow teacher and I then made plans to take her to the government clinic nearby to get treatment. As I spoke to the doctor, I was pretty surprised when the doctor on duty launched into a lecture about my responsibilities as a teacher.

“You shouldn’t be bringing your students to the clinic. If every teacher brought their student, what are their parents doing?” she asked.

I explained Alia’s situation and why I needed to bring her to the clinic but the doctor still thought I was wrong. She pointed out that I was a TEACHER and then proceeded to quickly treat Alia.

A week later, we were expecting Alia’s hand to heal but it only got worse. It got so bad that she could barely open her palms and was in pain. We rushed her to a private clinic and this time, the doctor did not scold me for bringing a student in. He diagnosed her with skin allergies and told her to only eat organic food. Again, I found myself explaining A’s situation. She barely has enough to eat on a daily basis and her family lives on eggs and rice every day. But the doctor’s best advice was still organic food.

A few days later, Alia’s hands were healed. I shared her story on my Facebook page and got a pretty large sum of donations for her. One friend pledged to give me a sum of money every month to help her. I went over to Alia’s house and found out that they were barely getting by with the basics. The only time they had proper meals was when they received some government aid. Their house was empty and the fans were switched off to save electricity.

And Alia… see, Alia was always a happy child. On the outside, no one would ever guess the kind of burden she was carrying around on her tiny shoulders. But the little help she got from my friends ignited in her a spark to start learning again. She worked hard in all my classes, came in for extra classes and was first in class during the recent exams. All she ever wants to talk about is how well she’s doing and how she’s going to put in all the effort to go to university. She never talks about her struggles.

Poverty for me was just a story I used to read in the papers before pledging to donate some money. What we often forget is that people need to live every day. Our one donation of RM100 will help them for a month or maybe two, and then what? I’m fortunate to have friends who are willing to support Alia so long as I am a teacher here. But what about the other Alias out there? What will happen to our very own children of Malaysia if they have to leave school to make ends meet?

In a society where doing good means sharing a post on Facebook or creating a hashtag to spread awareness, we often forget what it means to reach out in kindness to our own Malaysians. I figure the only reason the doctor scolded me for bringing a student to the clinic was because she unaware of the poverty in her own backyard. The only reason the doctor suggested organic food was because he thought everyone could afford organic food. It wasn’t really their fault, no one talks about these things.

As teachers, we try to do what we can with the little we have to help the students we meet. In my school, each teacher donates some money every month to buy food for students during recess time. Many teachers reach out to families to help them with their monthly provisions. But the greater aim is more than giving them food and money. As teachers, we want our kids to be free from the kind of poverty that is plaguing our society. The poverty of our minds – the ones where we forget to feel for another person, the ones where we are so saturated with images of war and destruction that we are numb, the ones that make us stop others from doing good. We are a society lacking in empathy.

We talk and talk about the problems in our country, yet we forget to do anything about it. We are plagued with the worst kind of poverty because we are empty from feeling anything for our neighbours. As a teacher I know that I can give my kids food and water and that will sustain them on the outside, but the real battle here is to free them from the poverty within. – July 12, 2014.

…more
The poverty of our minds – Cheryl Ann Fernando
12 July 2014 – TMI

06
Jul
14

When the good life makes a minister poorer of empathy

Spare a thought for Tengku Adnan Tengku Mansor (pic). He lives in a different stratosphere than 99% of Malaysians.

Have you seen his palatial home in the tony neighbourhood of Bukit Tunku, just a short distance away from the Prime Minister’s private residence? If you are one of the thousands of motorists travelling along Jalan Duta daily, you would have seen his house.

In his world of plenty, he and his family members want for nothing. The best food. The best accommodation. The best clothes. The best cars. The best air travel. The best holiday destinations. Domestic helpers. Drivers. Bodyguards. Gardeners.

This is his nice, comfortable, sterilised bubble.

He has little clue about the daily hardship of Malaysians; whether it is the clerk at the Treasury with a hand-to-mouth existence or the marginalised on the streets in Kuala Lumpur who often have to forego a hot meal.

When he talks about reaching out to Malaysians and being one with them, what he really is referring to are his exertions with Umno members.

When he talks about empathy (in the very rare occasion when he does talk about empathy) it is with regard to his party members. Not about ordinary Malaysians.

Because his world is his nice bubble.

So, Malaysians should not have been surprised that the Federal Territories Minister asked soup kitchens in the city to shut up shop, and spoke about the homeless and indigent in our society as if they pieces of litter.

He has since fallen back on the chosen defence of the Umno minister (“I was misquoted”). This is a really puzzling defence given that Tengku Adnan is now asking non-governmental organisations (NGOs) to help the government provide solutions on handling the vexing issue of the homeless in Kuala Lumpur.

We can only imagine that the good minister must have realised his great folly after his initial statement unleased a gush of criticism.

So now, he is backtracking in the only way he knows how: to pretend he was misunderstood.

But he wasn’t misunderstood. We understand him perfectly.

Like many ministers, big shot Umno politicians, he lives in a different world than most Malaysians; in a world surrounded by an excess of everything.

The most important thing missing in this world is EMPATHY – sadly that is what every elected representative and minister must have. Pity that some have no space for that in their palatial mansions or their own hearts. – July 5, 2014.

…more
When the good life makes a minister poorer of empathy
COMMENTARY BY THE MALAYSIAN INSIDER
5 July 2014 – TMI




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Mahathir in Putrajaya ceramah

 

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All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?

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