FORMER United Nations Special Rapporteur on extreme poverty and human rights Philip Alston has welcomed Malaysia’s revised poverty line from RM980 to RM2,208, but pointed out that it is still short of estimates by independent analysis.

“Malaysia’s government has taken a courageous step towards bringing its poverty line closer to reality (from 0.4% to 5.6%).

“The line announced today is more than double that of previous and results in an official poverty rate 14 times higher than previously acknowledged.

“Yet, because the new poverty rate of 5.6% is just one-third of that estimated by almost all independent analysis, I hope that the government will include an even more realistic benchmark in the 12th Malaysia Plan,” Alston said in a statement, responding to Putrajaya’s revision of the poverty line index (PLI) using computations last updated in 2005, resulting in an index of RM980 as of 2016.

Putrajaya announced the higher PLI of RM2,208 yesterday, following the release of Alston’s report to the United Nations earlier this week in which he said Malaysia’s had understated poverty with its official PLI of 0.4%, calling it a “statistical sleight of hand”.

“Adjusting the line is a vital first step. The challenge now is to systematically address poverty by instituting a comprehensive social protection scheme and to provide greater data transparency, in line with almost all democratic countries,” Alston added.

The revised PLI was also welcomed by the Malaysian Trades Union Congress (MTUC), which said the higher rate showed that national poverty in 2016 should have been closer to 8% rather than 0.4%.

MTUC secretary-general J. Solomon said the new PLI supported its case for raising the current minimum wage of between RM1,100 and RM1,200, which is not realistic given the cost of living, especially for urban areas.

“As the poverty index is now set at more than RM2,000, surely the minimum wage must also be adjusted accordingly.”

The MTUC also said the new PLI of RM2,208 could be further improved to cater the high cost of living in urban areas where 75% of Malaysians are employed, many of them in low-paying jobs.

The congress also urged Putrajaya to address income inequality instead of leaving it to “market forces or other lame excuses often offered by employers and politicians”.

Minister in the Prime Minister’s Department (Economics) Mustapa Mohamed, who announced the revised PLI, said that with the new computation, the actual rate in 2016 would have been 7.6%, which showed that it had dropped by two percentage points to 5.6% last year.

However, the MTUC cautioned that despite this drop, poverty is likely to worsen in the coming months amid the Covid-19 pandemic as workers are laid off or are forced to take pay cuts.

Under the revised computation, the current 5.6% PLI comprises 405,411 households. Under the old methodology which put the rate at 0.4%, only 24,700 households were considered poor. – July 11, 2020.