MALAYSIA stands by its current method of calculating its poverty level despite claims from the United Nations that it is under-reporting such incidence, said Economic Affairs Minister Azmin Ali.

Calling the UN’s remarks on the country’s absolute poverty rate “disappointing”, Azmin said the threshold is taken from a UN publication.

He said the national poverty line of RM980 per household per month is derived from internationally accepted standards based on the Canberra Group Handbook on Household Income Statistics, Second Edition (2011).

“While the government appreciates the effort by the special rapporteur in raising awareness on issues of poverty, certain comments are baseless and uncalled for,” Azmin said in a statement today.

“For instance, the assertion that a ‘sizable part of Malaysia’s population struggles to get by with tenuous access to food, shelter, education and healthcare’ is both misconceived and erroneous, clearly lacking empirical evidence and rigorous scientific procedures.” 

Azmin added that the RM980 poverty line income (PLI) level was based on the basic requirements for a household to live healthily and actively.

The national PLI is equivalent to RM8 per day or US$2. In comparison, the PLI targeted in the UN’s own Sustainable Development Goal 1 is  US$1.25 per day, Azmin said.

“(Malaysia’s) PLI is also higher for Sabah at RM1,180 and Sarawak (RM1,020) to take into account additional costs, such as transportation.”

Today, the UN’s special rapporteur on extreme poverty and human rights Prof Philip Alston said that Malaysia had vastly undercounted the number of its poor as it was using a measure more relevant in the 1970s.

Alston said based on the work of local and foreign scholars, a more realistic poverty level for Malaysia was between 15% and 20%.  

Alston had been on an 11-day working visit throughout Peninsular Malaysia, Sabah and Sarawak, where he met a diverse group of vulnerable communities, which included stateless persons, migrant workers, low-cost flat residents and indigenous people.

He said Malaysia should review its PLI to make it more in step with its current economic status as an upper-middle-income country on the cusp of becoming a high-income nation.

Despite criticising Alston’s remarks, Azmin said Putrajaya was reviewing its method of calculating the PLI to increase the effectiveness of its poverty eradication methods.

“In addition, a multidimensional poverty index (MPI) has been established to measure a wider scope of deprivation beyond the income dimension as currently practised,” said Azmin.  

“The indicators of MPI are also being reviewed to better reflect the social mobility of households.”

Azmin added that the government was not oblivious to the rising cost of living faced by Malaysians, especially the bottom 40% income group (B40).

“As such, a significant proportion of federal operating expenditure is allocated for subsidies and social assistance, cutting across energy, food, healthcare and education.

“In 2018, RM27.5 billion was set aside for this purpose, comprising 11.9% of total operating expenditure.” – August 23, 2019.