Malaysia’s Poverty Claim: The Reality Gap is Different!

Malaysia prides itself as having slashed its poverty rate from 49% in the 1970s to just 6.2% in 2022. However, the perspectives and goals of poverty eradication have changed significantly since the 70s. 

For an effective assessment, poverty must be defined accurately to capture the lived reality of the poor. In 2024, several states reported they had eradicated hardcore poverty. (The hardcore poverty line was RM1,198 and the poverty line income was RM2,589 in 2022.)

But any activist working with poor communities will tell you that the reality on the ground is different. This is especially so in urban areas. Working-class families struggle daily to provide for their families, even though they hold full-time jobs. Their most pressing challenges are the costs of food, housing, education and healthcare.

 

Source: https://www.wikiimpact.com

Unicef’s 2023 “Living on the Edge” report on urban poor households in Malaysia reports that 41% experience poverty, with eight out of 10 families struggling to meet basic needs. Thus, when politicians make claims of having have successfully eradicated poverty based on a unidimensional income-based poverty line, the figures do not reflect the reality on the ground. The definition of poverty based solely on material needs has drawn criticism among scholars and activists for not capturing the lived realities of the poor. 

Low poverty lines are meaningless when relative incomes and living costs have soared over the years. After much criticism from the UN special rapporteur on extreme poverty and human rights, Philip Aston, Malaysia increased its poverty line income from RM980 to RM2,208 in 2019. Even with this increase, a stark disconnect exists between the severity reflected by Unicef and Malaysia’s poverty rate of only 6.2%. 

Malaysia adopted the multidimensional poverty index (MPI) in 2016, using the framework developed by Akire and Foster from Oxford University. Malaysia uses a modified MPI, suitable for middle-income countries, as most of the original dimensions and indicators were chosen to capture poverty from the poorest regions of the world. Using this methodology, the Malaysia’s Department for Statistics reported Malaysia’s multidimensional poverty rate to have reduced from 1.5% in 2016 to just 0.8% in 2022. 

Income and food poverty can be overcome by cash transfers. But housing, healthcare, education and other living standards require a whole-of-government approach, as it requires numerous ministries to work together cohesively. Placing the poverty eradication portfolio under the Ministry of the Economy reveals the tendency of the current administration to continue looking at poverty as an economic problem. 

The poor must be determined as those falling below more realistic thresholds for housing, education, healthcare and living standards. The government cannot ease their foot off the pedal by claiming they have overcome hardcore poverty. Multidimensional deprivations that the people face must be an urgent priority. 

Reference:

Malaysia’s poverty claim: The reality gap the numbers don’t show, A Sivarajan, Aliran,
10 Mar 2025