Poverty in Malaysia reaches a critical state and can no longer be ignored

Recently, The Department of Statistics Malaysia released their Incidence of Poverty Report and the Household Income estimates revealed that the poverty rate in the country has increased to 8.4 % compared to the 5.6% in 2019.

A news article from Malay Mail stated that the rates were retrieved from stimulations to data from the 2019 poverty income line which was later adjusted to the 2020 content distribution pattern of households.

A picture of PRR houses for households under B4O category | Source: Kyoto review

It was also reported that household incomes have declined substantially, with 580,000 households from the M40 category moving into the B40 group whereas 12.8% of T20 households have slipped into the M4O division.

In Addition to that, an extra of 12.5% of households were listed to be receiving earnings lower than RM 2,500 “per month.”

The Sun Daily has also released an article that linked the pandemic to the change of global education leading it to worsen the existing unequal environment.

In response to this, Lim Sze Hau, an Economics major currently working in Hong Leong Bank said, “Poverty rates were already increasing before the pandemic, due to the lack of infrastructure, education and investment from the government. The poverty rate only accelerated because of the pandemic.

Not to mention, government schools in less advanced states will face issues like not having access to virtual learning such as stable internet, access to laptops or mobile phones.

All of these will create a competitive advantage for people who have access to virtual learning over the ones that don't, so infrastructure is still important.”

In an article by The Star, it was revealed that Sabah, Kelantan, and Terengganu were the states that were facing the largest impact in terms of absolute poverty.

A picture of people living in rural communities Sabah | Source: The Star

Lim also explained that states like Sabah, Kelantan and Terengganu have lower median household wages which results in a lack of spending power hence lesser investment. Therefore, it is less profitable for businesses there compared to those in bigger cities like Kuala Lumpur and Selangor.

“Wage gap and poverty will continue to worsen as long as there is a lack of government spending in infrastructure for those states, especially, when the government’s focus is to sustain the economy instead of growing it now,” he adds.

Dr Mohd Uzir assures the public that the economy is expected to improve as long as the spread of the pandemic can be suppressed.