Malaysia's poverty line too low, says Kian Ming

Kuala Lumpur: A higher poverty line would better measure poverty rates in a high-income nation, says Deputy Minister of International Trade and Investment Dr Ong Kian Ming (pic)."As wages climbed and we became a middle-income nation, we didn't increase the standard for what is considered decent living above the poverty line.

"So now it's a very low bar that we have.

"We need to increase the poverty line index to reach the level of a 'living wage', said Dr Ong.

He said poverty rate reports should also take into account at-risk groups.

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"There are households – although they do not fall under the poverty line – that are in great danger of falling into poverty, if for example, the breadwinner meets with an unfortunate accident and cannot work anymore, or passes away. Or if someone in the family, a child for example, suddenly falls ill with a debilitating disease.

"Among the urban poor in KL, one in three households has no social safety net – this means no insurance, no Socso, no EPF," said Dr Ong. He was speaking at the release of the World Bank's biennial Poverty and Shared Prosperity Report here on Friday (Oct 19) in conjunction with International Day for the Eradication of Poverty.

The report stated that over 80% in the South Asia region still lived with below US$5.50 a day in 2015.

The report further said that despite the decline in extreme poverty, broader measures show billions worldwide still struggled to meet basic needs. Meanwhile, the gap in income between the rich, middle class and poor in Malaysia has widened since 2008, according to a study by Khazanah Research Institute (KRI).

In its "The State of Households 2018" report, the research outfit of sovereign wealth fund Khazanah Nasional Bhd noted that the gap in the real average income between the top-20pc households (T20) and the middle-40pc (M40) and bottom-40pc (B40) households in Malaysia has almost doubled compared to two decades ago.

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The report, entitled "Different Realities", pointed out that while previous economic crises in 1987 and the 1997/98 Asian Financial Crisis saw a reduction in the income gap between the T20 and B40/M40, post 2008/09 Global Financial Crisis (GFC), those disparities were not reduced.

Photo Source: Bernama

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