Poverty in Malaysia: Essay

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With a population of 32.7 million, Malaysia is a multi-ethnic religious nation, distinguished primarily by three major ethnic groups: Malay and indigenous people, Chinese, and Indians. Malaysia has been effectively converting itself from a poor nation into a middle-income country since its independence in 1957. Despite difficult external factors, the economy of Malaysia has shown periodic expansion. It may also certainly assert its fighting success against poverty. Despite its progress in decreasing poverty, for certain geographical and societal factors, a vulnerable class of people in the country is still facing poverty.

Poverty is viewed as a mixture of diverse elements that goes beyond the claim of scarcity of income and is not limited to a single-faceted condition. The word ‘poverty’ applies to numerous detrimental social and psychological consequences, including domestic abuse, crime, alleged insufficiency of social investment and human capital expansion challenges, unfair distribution of services, and weak political involvement. The concept of poverty, however, is essentially country-specific.

In its earliest form, changes were made to the poverty line for discrepancies between the three major regions of Malaysia -Peninsular Malaysia, Sabah, and Sarawak – in average household size and cost of living. No adaptations have been made for rural or urban areas. Three ethnic poverty lines have culminated in this (besides the national one). These poverty lines, with inflation adjustments and changing average household sizes, were in place between 1976 and 2004 when they were introduced. While consumption established the poverty line, the poverty level was calculated in comparison rather than expenditure to gross household income. Therefore, families with incomes below the poverty line are classified as living in poverty, and those with incomes below half the poverty line are defined as living in ‘pretty tough’ or abject poverty. A modification was made to the poverty line in 2004.

The new poverty line has now been established for each family and measured for each state and rural or urban area, keeping track of the overall cost of living, the structure, and the scale of the household. Extreme hunger or hard-core poverty was often characterized by this current poverty line as households with wages beneath their food poverty line or families unable to fulfill their basic food needs. The national average poverty line in 2009 translates into an unadjusted RM6.50 per household per day (equivalent to US$3.00 per day). Poverty line income (PLI) is currently being updated and segregated for each state in the nation. In the updated edition, various sizes of households are taken into account, with a distinct division based on urban and rural areas. Specific features of each household considered for the PLI calculation include the number of inhabitants and their location and demographic aspects.

Malaysia has achieved immensely in fighting poverty. The poverty threshold was 49.3 percent as of 1970, and it was lowered to 8.1 in 1999. It was optimally decreased to 5.5 percent in the year 2000. The policy which was employed for reducing poverty led to accommodating a successful poverty reduction enclosure and quick economic growth with the continuous development of its micro-economy. Hardcore poverty decreased from 1.2% in 2004 to 0.7% in 2009, and the rate of total poverty dropped from 5.7% in 2004 to 3.8% in 2009. In Malaysia, the general poverty rate is 3.7 percent (Department of Statistics Malaysia, 2011).

Despite the clear achievements in eliminating poverty, owing to many deprived situations, poor parts of the population remain stagnant. But I believe that the right approach of the government and renewed models of economic development will give results and, in a certain time, Malaysia will still be able to overcome the problem of poverty.

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