Time to recognise the poverty in our midst

Sep 05, 2019

By Anil Netto
For far too long, we have been told that only 0.4 per cent of Malaysians were poor.

This was based on a ridiculously low poverty line income figure of RM980 per month for a family of four – which is used to measure poverty.

But now both the UN special rapporteur on extreme poverty and human rights and a World Bank senior economist have confirmed what many already knew, if not actually felt.

They say the real poverty rate in Malaysia is somewhere between 15-20 per cent.

It is no use being in denial over it. After all, the UK is believed to have a poverty rate of 15 per cent while the US has 12 per cent (Source: Wikipedia citing CIA 2017 figures).

While gross national income per person has increased from RM200 per month in 1977 to RM3,800 now, the poverty line income has only risen from RM200 to RM980 for a family of four over the same period.

Recent comparisons with other countries with similar levels of income as Malaysia show that they use a benchmark for absolute poverty of RM2,550.

So clearly, we need to triple our poverty line income level to get realistic figures for our poverty rate, as it would be tough for a family of four to manage on monthly household incomes of less than RM3,000 in the cities.

We also need to look more closely at the poverty rate of the Orang Asli/Asal and other indigenous groups, especially those in the interior areas.

We have not even considered the poverty rates among the migrant workers, refugees and asylum seekers. Remember, the 175,000 asylum seekers registered with the UN are legally not allowed to work while their children cannot go to state-run schools.

This leaves the adults vulnerable to exploitation by employers who know these refugees have nowhere to turn to. The refugee children, for their part, face a grim future without a proper education.

Before we can come up with policies aimed at empowering the poor, we have to know who they are. We have to recognise that 15-20 per cent are struggling badly not to mention the rest of the bottom 40 per cent of households and the middle-income 40 per cent too. After all, it has been pointed out that a family of four would need a living wage of RM6,500 to manage.

The UN special rapporteur also pointed out that we are spending way too little on social spending. “Policies should also be devised to address the needs of those living within the Bottom 20 and there is a need to expand overall spending on social protection,” he said.

Now that we know the extent of the problem, we have to figure out why they are poor in a country where so many are billionaires.

The gulf between the rich and poor has a lot to do with the regressive taxation rate in the country, which has shifted to taxes on spending while the tax rates for companies and high-income individuals have dropped over the years. This has a heavier impact on the lower-income group, who spend a large proportion of their incomes on essential items. It also leaves them with precious little left over to tide them over medical emergencies and their retirement years.

The other areas we need to look at are the expensive, unaffordable housing and reliance on private motor vehicles in the absence of an efficient public transport network, especially for those outside the Klang Valley.

Two of the largest components of household debt are housing loans and car loans. If people didn’t have to take on so much in loans for expensive housing and cars, their quality of life could be vastly improved.

The funny thing is while writing this, a few new neighbours from out of town dropped by to ask about transport options to get to their workplace. They were thinking of taxis but that would be expensive – so I suggested they try the bus, which would save them a lot.

A third area we need to focus on is food security – growing more food and protecting our food sources. This means protecting our farm land and coastal waters from encroachment by big corporate interests.

Finally, to round off this column I would like to wish the HERALD team and their volunteer reporters, congratulations and well done for their 25 years of hard work with the paper. From my experience with just a monthly magazine, I know it is no joke coming up with a weekly newspaper – in four languages at that – week in and week out. I am full of admiration for what they are doing, perseverance and dedication.

I also want to wish the Monfort Youth Centre in Melaka all the best with their fundraising event on September 8. The Brothers and their lay team have done an amazing job with the youth they are training and empowering, including refugees.They deserve everyone’s support.