PUTRAJAYA has revised the poverty line index (PLI) to a monthly household income of RM2,208, which brings the country’s poverty rate in 2019 to 5.6%, Mustapa Mohamed said today.

The computation of the PLI was last updated in 2005, and the PLI stood at RM980 in 2016.

In a statement today, the minister in the prime minister’s department in charge of economy said the new threshold was determined following a review of the index.

Citing a Statistics Department’s Household Income and Basic Amenities Survey Report 2019 released today, Mustapa said the national PLI for households in 2019 stood at RM2,208 per month.

The new poverty rate in Malaysia now stands at 5.6% and comprises 405,411 households in 2019.

Under previous figures gathered in 2016 using the 2005 methodology, Malaysia’s poverty rate stood at 0.4%, with only 24,7000 households falling under the category.

The 0.4% poverty rate, which was one of the lowest in the world, was criticised by former United Nations special rapporteur on extreme poverty and human rights Philip Alston, who had found that Malaysia’s poverty rate was much higher than the government’s official figures.

However, if the new methodology is used, the poverty rate in 2016 would have stood at 7.6% involving 526,734 households.

“This means, if the new PLI methodology is used, the poverty rate has decreased by two percentage points from 7.6% in 2016 and 5.6% in 2019,” Mustapa said.

He said this goes to show that the programmes and initiative undertaken by the government in collaboration with civil society groups and the private sector has been fruitful.

The efforts to revise the methodology of the PLI started from the tabling of the mid-term review of the 11th Malaysia Plan on October 18, 2018.

The government has reviewed the methodology to ensure that it pictures the consumption pattern as well as the household and demography needs in tandem with the development achieved by the country.

The research was undertaken by the Economic Planning Unit under the Prime Minister’s Department, the Statistics Department, Health Ministry and other ministries and agencies.

The findings from the study, which was conducted from March 2019 until June this year, led to the updating of the methodology on three aspects.

The PLI for food has been updated from minimum to optimum minimum, taking into account the quality of the items in the food basket based on the 2020 food pyramid as well as the Diet Guideline Malaysia 2020 along with physical activities and the healthy lifestyle.

“For example, condensed milk, which is part of the food basket, has been substituted with powder milk,” he said while providing an example of the first aspect.

The second aspect entails the household needs of the Bottom 20 group, whereby 146 items have been identified as needs as opposed to 106 previously. 

The third revolves around the patterns of household expenditure on goods and services.

Mustapa added that there are other multi-dimensional methods employed in measuring the poverty rate based on aspects such as health, education, housing, quality of life, access to information and monthly household income. – July 10, 2020.