Has Poverty Rate Dropped?

According to the Department of Statistics Malaysia (“DOSM”), poverty rate was 6.2 percent of the population in 2022, down from 8.2 percent in 2022. This was according to the DOSM Household Income and Expenditure Survey 2022.

The national poverty line for 2022 was defined as a monthly income of RM2,589 and below, while "hardcore poverty" was defined as a monthly income of RM1,198. Other salient findings with policy implications from the survey were as follows: 

The poverty rate is highest in Sabah (19.7 percent), followed by Kelantan (13.2 percent) and Sarawak (10.8 percent). (Note that the poverty line for each state varies).

Source: Malaysia News

The income gap between the bumiputera and Chinese – a key policy consideration for successive governments – has widened from a 0.72:1 ratio in 2019 to now 0.71:1.

The Gini coefficient, which measures income inequality, has improved marginally to 0.404 from 0.407 in 2019. Median household disposable income is the lowest in Kelantan (RM3,156) followed by Perak (RM3,804) and Kedah (RM3,821).  The "top 20 percent" of households received 46.3 percent of all income, while "the bottom 20" received 16.1 percent.

Based on the DOSM's survey, the "middle 40 percent" band was defined as household income of between RM5,250 and RM11,819.

Both median and average monthly household incomes are RM6,228 and RM8,479 respectively. Both values appeared to have rebounded since 2020 and are now higher than 2019 levels.

The DOSM 2022 survey involved 8.4 million households and was conducted between Jan 2, 2022 and Dec 31, 2022.

Under the Madani Economy framework announced recently, distribution of income and inequality were not clearly mentioned. Reducing poverty must be a goal in itself. Growth and “trickle-down” growth especially will not help the poor. Specific programs/taxation has to be instituted to reduce poverty and inequalities in Sabah, Kelantan and Sarawak. We remain consistent with Gini coefficient of 0.4 over several decades now. Isn’t it time to be bold?

Reference:

DOSM: Poverty rate trends down, Malaysiakini, 28 July 2023