The Malaysian Insight

ACCORDING to the 11th Malaysia Plan – the one currently in use – one sign that you’re poor is if you did not finish primary school.

But sociologist Prof Denison Jayasooria questions whether such a low threshold is relevant any more for Malaysia, which is classed as one step below a high-income country.

Such a threshold is not realistic given the fact that in today’s labour market, most decent-paying jobs require at least a pass in SPM and a credit in Bahasa Malaysia, said Denison.

“If you just complete primary school these days, you can’t even get a decent-paying job,” said Denison of Universiti Kebangsaan Malaysia (UKM).

“But this indicator in the poverty measurement does not capture that. It seems to mean that a household is not deprived if its children completed secondary school.”

Education is an indicator used in the multi-dimensional poverty index  introduced in the 11MP as the former Barisan Nasional government wanted a more accurate picture of poverty and deprivation.

Denison mentions this indicator as an example of how Malaysia still has to improve how it measures the most vulnerable and poor in society.

This comes as Perikatan Nasional recently revised its poverty line income (PLI) – its main measurement of deprivation – from RM980 per household per month to RM2,208.

This caused the poverty rate to rise from the contentious 0.4% to 5.6% or from 24,700 households to 405,411.

Denison and other experts said the revision is a step in the right direction but still too low for an upper-middle-income country that wants to join the club of rich nations.

To deal with poverty seriously it must also revise the indicators in the multi-dimensional poverty benchmark, such as access to healthcare, years of schooling and quality of homes.

“But the challenge is to move away from PLI because it is used for the poorest countries in the world. We are an upper-middle-income country going to high income,” said Denison, who has authored numerous studies on the subject.

“Even our multidimensional indicators are too low. We set it as completing primary school. But today, it should be that your child has to pass SPM because if you don’t, they can’t get a job.

“If a child lives in a flat but doesn’t have a computer, is he not digitally poor? Because during the Covid-19 pandemic, he won’t have access to his lessons.

“These are the current factors we must consider when measuring poverty.”

Different challenges

The PLI revision was announced on 10 July days after United Nations special rapporteur Prof Philip Alston released his latest study of poverty in Malaysia.

Among others, the report criticised the artificially low poverty rate and the lack of reliable data from government agencies on the problem and how groups, such as lowly paid migrant workers, refugees and stateless people, were not counted.

Developmental economist Dr Madeline Berma said Malaysian academics have for decades been campaigning for a revision of the PLI as the RM980 was formulated in 2005.

“When you have a threshold that doesn’t reflect realities on the ground, you get an artificial picture. You cannot realistically live in Sentul or Lembah Pantai on RM980 per month,” said Berma, who is also from UKM.

It is high time Putrajaya deals with the problem of children born to Malaysian parents but who lack citizenship status, she said.

“This is a problem with Dayaks and Indians who live in remote areas as the process to travel to an urban centre to register their children is difficult.

“So, they fall through the cracks of the social-safety net,” said Berma, who used to head UKM’s Tun Fatimah Hashim’s Women’s Leadership Institute.

Besides the PLI revision, the Statistics Department has also revised its classification of the income brackets.

The broad categories of top 20 Income percentile (T20), middle income (M40) and bottom 40 (B40) have been further broken down to B1, B2, B3, B4, M1, M2, M3, M4, and T2 and T1.

A B1 household is classified as earning below RM2,500 per month while B2 to B4 families make between RM2,501 and RM4,580. M1 to M4 households earn between RM4,851 and RM10,970 while a T1 family makes between RM10,971 and RM15,040.

The highest income bracket, T2 are those who earn more than RM15,041 per month.

This could indicate that the 12th Malaysia Plan, which is the policy blueprint for the next five years, could have different programmes tailored to the specific needs of each income group.

Another poverty researcher and author, Jayanath Appudurai, said academics have long known that the needs of B40 households differ from those in the B20 and B10 categories.

“Families with fishermen, farmers, odd-job labourers and cleaners don’t even earn the legal minimum wage,” said Jayanath, adding that they’re also not in retirement schemes or have access to social security.

This is different for someone who earns between RM3,000 and RM4,000 in a formal sector services or manufacturing job but who receives Employment Provident Fund (PEF) and Socso contributions.

“So, the challenges for B10 and B20 are different. They need higher direct cash of food aid and better capacity building so they can move up the income ladder,” said Jayanath, who co-wrote books on Indian Malaysians and poverty in Klang.

They also need more help with owning decent homes as during economic downturns, such as the Covid-19 crisis, many were being threatened with eviction, said Jayanath.

“At the same time, we have to start counting migrants, stateless people and refugees in our poverty data if we are serious about turning into a high-income country.” – July 18, 2020.