‘Review unrealistic poverty benchmark’

G Vinod | August 22, 2012

A social activist has called for the current absolute poverty measurement used by the government to be revamped as it doesn't take into account the rising cost of living.

PETALING JAYA: Would you be able to pay for food, clothing, accommodation, furniture, medical bills, transport, education and recreation by earning just RM763 a month?

This was the question posed by Saya Anak Bangsa Malaysia (SABM) representative A Jayanath, 63, during a recent interview with FMT in Petaling Jaya.

“The eight things listed are based on the government’s minimum requirement on what a household should be able to manage based on the poverty line income (PLI) of RM763 for a middle-income nation,” said Jayanath.

He said the calculation was based on a concept called the “absolute poverty measurement”.

But the government had set different “measurements” for different regions. While RM763 is the benchmark for poverty line in Peninsular Malaysia, it is RM912 in Sarawak and RM1,048 in Sabah.

“Based on the absolute poverty line measurement, Malaysia has done a great job in reducing poverty. Currently, we only have 3.8% of Malaysian households that are considered poor,” said Jayanath.

However, Jayanath said that the weakness in the absolute poverty line measurement system was that it uses the bare minimum World Bank standard of US$2 per capita per day, and it does not address several factors, such as the differences in cost of living in urban and rural areas, and the annual increase in the consumer price index (CPI).

He added that this is the reason why the government should consider using a “relative” poverty measurement system that would include, among others, these factors in calculating the poverty rate in the country.

Based on the system, Jayanath said that 50% of the monthly household median income should be used as the benchmark to measure the poverty rate in the country.

“Based on the 2009 survey by the Department of Statistics, the national household median income stands at RM2,841 a month. Therefore, our poverty line benchmark should be set at around RM1,500 per household,” he said.

Jayanath said that many developed countries, such as the United States, Australia and New Zealand use this system to measure their poverty level.

“And that is why high-income nations such as Japan and South Korea say that their poverty level is about 15%,” he said.

Social Inclusion Commission

However, Jayanath pointed out that if RM1,500 per household was used as a benchmark for poverty, it will show that about 21.6% of total households in Malaysia are currently below that threshold.

“That roughly translates into nearly six million of our population. But tell me honestly, what can you do with RM1,500 if you have a family of four? Not much I think,” said Jayanath.

And this is why, he added, that the government should consider the proposed Social Inclusion Bill in order to address this matter.

On Tuesday, SABM mooted the bill which would compel the government to establish a Social Inclusion Commission (SIC).

The commission would be tasked with formulating and monitoring poverty reduction programmes and eliminating institutionalised discrimination in the country.

Jayanath said that it was also equally important for the government to customise poverty eradication programmes based on the rural-urban divide and by regions.

“Earning RM1,500 in Gua Musang, Kelantan, is different from earning the same amount in Taman Medan, Petaling Jaya,” said Jayanath.

He also said that it was important for policy-makers to get the participation of the MPs, state assemblymen and NGOs in order to understand poverty in a given constituency or locality.

“A community leader from Klang will have better understanding of the poverty in his area as opposed to a policy-maker based in Putrajaya ,” said Jayanath.

Indigenous people, he added, needed customised programmes that cater for traditional norms and cultural practices.

“Many of them prefer to live in their natural ecosystem. So you cannot go around building concrete structures for them to live in. You must consult and understand their real needs first,” he said.