Let’s do our part to help build Malaysia

The measure of poverty

The recent release of the Economic Transformation Programme (ETP) Annual Report 2014 received its share of brickbats. A few were aimed at me, in light of the commentary made that the rate of poverty in Malaysia for 2014 has been reduced to one percent.

As a nation, we can be proud to have come far to stamp out poverty. The World Bank in their latest overview of Malaysia reports we have “succeeded in nearly eradicating poverty”. The share of households living below the national poverty line (US$8.50 per day in 2012) fell from over 50% in the 1960s to less than one percent currently.

The Asian Development Bank declared that Malaysia recorded 55.3% reduction on the percentage of population below poverty line income, the biggest reduction among ASEAN countries.

A survey conducted last year by the Department of Statistics Malaysia (DOSM) on a sample size of 81,634 households shares the preliminary data that only one percent of households were living under the Poverty Line Index (PLI) in 2014.

There’s data and then there’s sentiment, I get that. There are also people who only want to see the negatives and get excited if the picture painted is one of doom. So when we present data that demonstrates a different light and give hope there is improvement, they are dissatisfied and accusatory.

This conundrum is not isolated to Malaysia. It is the challenge for many governments to reconcile the disconnect people feel between statistics and sentiment. In this article, I hope to bridge the gap.

I would first want to clarify on statistics – how poverty rates are calculated in Malaysia. Second, I want to assure all Malaysians that the Government is attuned to concerns and have been acting to eradicate poverty and uplift the quality of life under the Government Transformation Programme (GTP).

Back in 2009, we clearly defined PLI during the GTP 1.0 Roadmap. It was important to get this right to ensure assistance were channeled to the right people. Our definition of poverty is aligned with OECD and our measurement of income follows the standards of the UNDP.

There are categories of what is considered ‘poor’:
1. Extreme poverty. These are households which fail to earn enough to fulfil basic survival needs such as food, clothing and shelter. Households that fall into this category earn average monthly incomes of less than RM460 in Peninsular Malaysia, less than RM630 in Sabah and less than RM590 in Sarawak
2. Poor. These people fall short of certain standards of consumption which are deemed necessary to maintain ‘decency’ in society, for example, those who cannot afford healthcare and education. Households with average monthly incomes of less than RM760 in Peninsular Malaysia, less than RM1,050 in Sabah and less than RM910 in Sarawak are defined as poor

We also looked beyond the definition of ‘poor’, paying close attention in lifting household incomes of the bottom 40%. In the ETP Roadmap, we aimed to increase the mean monthly income from RM1,440 in 2009 to RM2,300 in 2015, as stated in the Tenth Malaysia Plan. According to data from the Ministry of Finance, this target was met, ahead of schedule, in 2014 (RM2,312).

We have many good women and men from DOSM; Ministry of Women, Family and Community Development; Economic Planning Unit; State Governments and Agencies, as well as NGOs and corporates active in duty to actively reach out to those in need.

We have their names – all 168,483 of them – through the e-Kasih database which is frequently updated to further identify and focus on this target group. They can enroll in 1AZAM Programmes to equip themselves with the tools to help them break free from the clutches of poverty.

A collaborative effort which involves multiple ministries, agencies and NGOs, 1AZAM provides income generating initiatives. In 2014, 24,646 of them managed to raise their income by RM300 within a timespan of three months. A total of 64,689 individuals have benefited from financial literacy programmes since 2013 to ensure they are able to better manage their finances.

There is still much to do as “one percent” translates to 300,000 people. I admit, the hardest frontline battle in Malaysia’s fight against poverty is to change mindsets of those in living in poverty.

Moving forward, our focus are four-pronged:
1. Lift the level of education amongst the poor. Through education, children in poor communities will stand a better chance to get better jobs or get into business
2. Strengthen social safety nets, enhance collaboration with NGOs and corporates, and provide empowerment programmes
3. Ensure income is redistributed to uplift those in poverty through BR1M for the bottom 40%
4. Institutionalize appropriate polices which promote economic development

Every man, woman, youth and child throughout Malaysia must benefit from the country’s transformation. Government alone cannot do it. It calls for the collaboration of people of conscience and goodwill to protect and uplift the poor. That’s the measure of our success as a nation.

Staying the course

Every day we receive messages from Malaysians of all walks-of-life. Many are hopeful for the work that goes in to the National Transformation Programme (NTP). Others criticise and question our progress.

One thing is clear. These feedback – good, bad and ugly – demonstrate without doubt Malaysians care about Malaysia and want things to improve.

Last week, the Prime Minister reported on the 2014 results of the Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP). Broadcast live on RTM1, he spoke of our country’s progress since 2010, sharing facts and figures on the economy, jobs, investments, and efforts to narrow income disparity and uplift rural communities.

I believe what gripped the hearts of viewers were stories how socioeconomic improvements have transformed the lives of those living at the edge of poverty and struggling to get by.

Take G. Munisamy from Muar, for example. A recipient of the BR1M programme since 2012, the 75-year-old who recently had a heart bypass used his BR1M assistance as “emergency cash” to offset medical costs his monthly pension could not cover.

Up north, we have Asbdullah Ali from Nibong Tebal, a beneficiary from the Azam Tani Programme. Formerly a factory worker who earned RM900 a month, Asbdullah worked his way to be a quail egg supplier and is making a minimum gross profit of RM6,000 a month today.

I am heartened to hear the story of the Murut and Dusun villages which benefitted from a 60km road connecting Pekan Sook to Kampung Sinua in Sabah. This new road makes life a lot easier for villagers to trade, travel and for children to get to school.

In the grander scale of things, our Murut and Dusun friends are just 10,000 of the 2.5 million Malaysians in rural areas who now have access to newly-build roads.

Stories like these inspire us to push on. Our transformation efforts must be inclusive, meaning, no one gets left behind as we march towards our high-income goals.

On the economic front, the ETP is relentless in its pursuit of growth even as we fiercely compete regionally and globally. In 2014, we chalked records and successes, as evidenced:
1. We have stable economic growth. Amidst low inflation, our GDP steadily grew since the start of the ETP. In 2014, we beat forecasts to record one of the fastest growth in the region at six percent.
2. We are closing in on high income with National Key Economic Areas (NKEA) as main contributors to Gross National Income (GNI). In 2014, the 12 NKEAs contributed 68% of total GNI. Meanwhile, GNI per capita grew 47.7% from US$7,059 in 2009 to US$10,426 in 2014. The US$15,000 target is within sight.
3. Employment is on the rise. A total of 1.8 million new jobs have been created with 1.5 million employment opportunities within the NKEA universe since 2010.
4. Private investment continues to outpace public investment in line with the ETP’s objective to elevate the private sector as the main driver of the economy. Private investment grew 2.5 times between 2011 and 2014 compared to 2007 and 2010. Today, private investment captures the chunk of total investment at 64%.
5. Our fiscal consolidation measures are on track. We have successfully reduced fiscal deficit from 6.7% in 2009 to 3.5% in 2014, targeting for a balanced budget by 2020.
6. Government revenue on the rise. We have seen Government revenue rise in the last five years. In 2014, we expect to record RM225.1 billion in revenue, compared to RM213.4 billion in 2013. As we improve in tax collection, we can channel more resources to fund development and improve our social safety nets.
7. Diversifying the economy and reducing our dependence on oil and gas revenue. By prioritising investment and policy support to 12 NKEAs, our economic pie has become more diverse with manufacturing and service-based industries staking a greater share of GDP. Contribution of oil and gas to Government revenue steadily decreased from 40.3% in 2009 to 29.7% in 2014.
8. Robust capital market economy. Malaysia remained the largest fundraising destination in ASEAN for the second straight year in 2014, raising RM22.7 billion through IPOs as well as secondary offerings. Investors are confident in the Malaysian economy and in our ability to compete.
9. Private consumption is strong. Consumption now accounts for 65.7% of the GDP thanks to a stable labour market, wage growth and private investment activities.
10. Global endorsements. In the IMD’s World Competitiveness Yearbook 2014, Malaysia’s ranking improved to 12th from 15th in 2013. Pemandu was one of the top 20 most innovative Government agencies in the world, according to NESTA, UK based organisation and Bloomberg Philanthropies.
Working in tandem with other Government programmes, such as the 11th Malaysia Plan, we will sprint through the final lap towards 2020. When I see how far we have come, I know there is more we can accomplish. When we are armed with knowledge, drive and optimism, we are unstoppable.

I urge all Malaysians who care about our progress, to read the GTP and ETP 2014 Annual Reports. To download, log on to http://ar.pemandu.gov.my. These reports include the validated KPI scores of all lead ministers and ministries, an inventory of what has been achieved and what has not, validated by PwC

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