NEW methods of calculating poverty and the real costs of living are among some of the new metrics that will be introduced in the latest official Household Income Survey due out in April.

These new measurements, said Statistics Department director Dr Mohd Uzir Mahidin, will give a more accurate picture of the levels of deprivation nationwide to aid policy makers channel funds more effectively.

The 2019 Household Income Survey will also have details on poverty rates in each district and a detailed breakdown of the income bands among M40 and B40 households, Uzir told The Malaysian Insight.

The new cost of living index, based on wages, and the cost of food and household products in different parts of the country, will hopefully aid workers in demanding higher wages from their employers, said Uzir.

The new measurements are aimed at addressing some of the criticisms Malaysia has faced concerning how it calculates poverty, Uzir added.

“We will also refine the different levels in the M40 group, for instance to show who among them are more vulnerable, so that there can be more targeted policies to those who really need it,” he said on the sidelines of a talk organised by think tank Institut Masa Depan Malaysia (Institut Masa).

“So, this time we will include the poverty line income, and measurements of relative poverty and multidimensional poverty,” he said.

“We will also show poverty levels at district level, so that people can relate to the data because if it’s on a national level people can’t really see and relate to it.”

Malaysia has been criticised for using a poverty measurement that is more relevant for its level of development in the 1970s.

United Nations special rapporteur on extreme poverty and human rights Professor Philip Alston said local and foreign scholars who have studied the country’s poor believe that a realistic poverty rate is between 16% and 20%.

The figure is based on having the poverty line set at RM980 per household per month, or RM8 per person per day.

Experts at the Khazanah Research Institute (KRI) and economist Martin Ravallion have advocated their own metrics to better reflect the reality of the situation.

Using KRI’s relative poverty measure of 60% of the national median income would show 22.2% poor households.

In Ravallion’s study: Has Malaysia virtually eliminated poverty? he said the country’s poverty rate is about 20% when compared with nations with a similar average income.

Uzir added the cost of living index will give a better idea to ordinary Malaysians on the rise of daily necessities such as groceries and expenses, such as transport.

“We will have an overall inflation measurement but we are going beyond that to look at our expenses and what is the cost of living based on whether they live in a city, suburban area or rural area, and by region.

“It will also propose a salary level that is suited for different regions and their living costs so it will help workers and employers to determine what is an appropriate wage in a given locale.” – February 13, 2020.