The 10th Malaysia Five Year Plan : Old Wine in New Bottles – Part 5 (Poverty)


Chapter 4 of the Plan document together with several Tables dealing with Thrust 3 in the Appendices present fairly detailed statistics on poverty and income distribution.

In a somewhat self-congratulatory tone, the Plan proclaims that hardcore poverty was reduced from 1.2% in 2004 to 0.7% in 2009 and that the incidence of overall poverty fell from 5.7% in 2004 to 3.8% in 2009. These claims are questionable because of the underlying methodology employed in deriving these estimates.

In the first place there is no indication as to how the Poverty Lines were estimated. Assuming that the methodology used mirrors that used in the 9th Plan, the bar to define poverty is set at far too low a level.

In the second place, the use of “households” rather than “persons” distorts the measurement.

On the flawed basis, 228,400 households were categorized as poor. It is most significant that of these 99,100 were in Sabah with another 27,100 in Sarawak. Thus, there were a disproportionate number of the poor in these two states highlighting gross neglect by the Federal government of Malaysians in these two states.

Converting the number of households to a “persons” basis, (228,400 households X 6.4 persons per household) the number in poverty is a staggering 1,462,000 persons representing some 5.2 percent of all Malaysians. It is a sobering thought that after almost four decades of the NEP, poverty exists in our midst even when a low bar is used to define it. It is a telling indictment of the failure of the NEP to deliver upon the promise of development. That absolute poverty remains despite the billions expended, points to policy failures, incompetent implementation, and failure of the political will to make adjustments.

A new beginning is needed. To sincerely and fully address the issue of poverty, it is imperative that we apply the internationally accepted concepts and methodology employed to derive the various Poverty Line Income (PLI) measures and the estimates of poverty incidence. The current methods are deeply flawed. To the extent these are flawed, they fundamentally affect the analysis and conclusions. In turn, this leads to the advocacy of policies that are patently wrong.

In both the 9th and presumably in the 10th Plan the concept of HARDCORE poverty defined as “…. Income less than the food PLI which is based on nutritionally based diet” has been used. The very term “Hardcore” is not in international use. The World Bank and UNDP, two global agencies in the forefront on analyzing poverty, use the concepts of “Absolute” and “Relative” poverty. There are no valid reasons why Malaysia deviates from standard international terminology.

The internationally accepted and applied poverty measurement concepts developed by the World Bank are clear and precise. Rural poverty rate is defined as the percentage of the rural population living below the national rural poverty line. Urban poverty rate is the percentage of the urban population living below the national urban poverty line. National poverty rate is the percentage of the population living below the national poverty line. National estimates are based on population-weighted subgroup estimates from household surveys. Population below US$1 a day and population below US$2 a day are the percentages of the population living on less than $1.08 a day and $2.15 a day at 1993 international prices.

It would appear that these methodologies were rejected by the EPU in favor of its own definitions and methods with the sole main of producing low “feel good” estimates of the poor. This is an insult to the poor in that we are unable to generate true and accurate estimates. It cannot over-emphasis the importance of getting the numbers right as these underpin the need policy responses and ultimately the allocation of resources to alleviate the scourge of poverty from Malaysian society.

What of the future?

Beyond the rhetoric, it is clear that fundamental policies will continue. It is no consolation to the poor. The spending proposed on poverty in the Plan is a small fraction of the total size of the Plan. These numbers are more telling than the rhetorical speeches and applause of a compliant media. The reality for the poor is that subsidies are likely to be eliminated and new taxes piled on to finance grandiose projects such as yet another convention center, more roads to nowhere and large transfers to the powerful and well connected corporations and tycoons. If the truth be told the BN are obsessed with creating more infrastructure even though much of what has been created remains underutilized.

The issue of restructuring employment is not questioned. It has been a long pursued policy from the 1970s. However, this is not just a responsibility of the private sector. It must be noted that the public sector continues to be the largest single employer with almost 1.2 million workers. It has however failed dismally to follow the policy of eliminating or reducing ethnicity as a criteria in employment in the public sector. Ministerial statements offer lame explanations that non-Bumiputras are unwilling to enter the public service. This assertion can be challenged given the human resource management policies pursued by the responsible departments and agencies. It is indeed most disappointing that the Plan is silent on the entire issue of balanced employment in the public sector.

It is time for the Government to state in categorical terms that it will take steps to correct the imbalance in the employment pattern in the public sector. It must put its money where its mouth is. It cannot demand of or compel the private sector until it implements an employment policy that is embedded in the national compact under the NEP when it was introduced in the 1970s.

The solutions to the issue of income disparities between groups cannot be resolved through setting targets and postulating restructuring and broad notions of human capital development in the manner proposed. There can be no denying of the fact that reform of the educational system at all levels is a first and fundamental step. The Plan throws out some tentative and meek proposals. These are insufficient. Standards must be improved, merit in selection must be a factor; the curriculum reformed, our institutions of tertiary learning need to be urgently restructured (including the pattern of employment). The focus on quantity must stop and be replaced by quality. It is most telling that our educational institutions are producing graduates to swell the ranks of the unemployed and the unemployables.

A nation’s competitiveness is in part determined by the quality of its human resources. That in turn is determined by the excellence or lack thereof of the knowledge and skill levels of the work force. For a generation or more, Malaysia has had the misfortune to have pursued educational policies that have impacted negatively on the creation of a dynamic, motivated, and skilled labor force. Our institutions of secondary and tertiary education have become sausage factories producing graduates unfit and unemployable in fields that hold a key to our future. The consequent loss of competitiveness is beginning to manifest. Despite the clear and present danger signals, the BN administration continues to ignore actions that are needed. Meritocracy in the selection of those that are taught and those who teach cannot be substituted with less than open and transparent processes. It must be recognized that upgrading the educational system demands more than money; throwing money at the problems will not resolve matters. There is an urgent need to move resolutely towards reforms that will improve the quality of the system, produce graduates that are equipped to meet the challenges of a harshly competitive world.

These issues are hardly addressed in the Plan.

  1. #1 by Brats195 on Monday, 14 June 2010 - 2:21 pm

    I would attempt to demand that DAP, PAS, PKR and MCA not to dwell on spoken words and writtem blogs.

    Stand up and be counted with a clear and definite demand to keep BN away from tax payers’ money.

    To me, it is definitely a failure if DAP, PKR, PAS and MCA MP’s were not be able demand that tax payers’ be safe guarded as would the respective MP’s money.

    DAP, PKR, PAS and MCA MP’s should be ashamed of themselves for not able to perform a SIMPLE TASK in parliament – to demand that BN steers clear of our tax payers’ money….

    DAP, PKR, PAS and MCA MP’s should step down and save million’s of ringgit to be used to lessen the Rakyat’s burden….

    What is the use of DAP, PKR, PAS and MCA MP’s if you only task is to TALK, COMPLAIN and NO ACTION? Any 5 years boy and girl can do better than that and is free of charge.

    I ask,

    If the presence of DAP, PKR, PAS and MCA MP’s in parliament can not change the way BN is abusing our tax payers’ hard earned money, what is the use of having these MP’s?

    If the only task DAP, PKR, PAS and MCA MP’s is capable is to complain, talk and write..what is the use of Malaysia tax payers spending millions to maintain these MP’s?

    I demand that DAP, PKR, PAS and MCA stand up together and be counted as people’s representatives…..

    I demand that DAP, PKR, PAs and MCA stand up together and be righteous to demand strict use of tax payers’ money….

    How do we know whether tax payers’ money is put to good use?

    The answer is simple….goes back to tax payers to seek approval to spend our money…

    Tax payers are better decision maker than polician as far as spending our tax payers’ moeny.

    It is a no brainer….

    You would not part with your own money unless he money is put to good use.

    You can not trust someone else to spend your own money.

    PAS, DAP, PKR and MCA MP’s. Stand up and do something now or never!!!

  2. #2 by pulau_sibu on Monday, 14 June 2010 - 2:28 pm

    calling it old wine seems to give BN a lot of compliments. Wine is good, the older the better.

  3. #3 by k1980 on Monday, 14 June 2010 - 2:38 pm

    Not wine lah.

    It’s actually old urine in new bottles. A

  4. #4 by boh-liao on Monday, 14 June 2010 - 3:44 pm

    As expected lah, d new Istana Negara in Jalan Duta will now cost >RM800 million, and not RM400 million as announced by UmnoB/BN in 2006
    Surprise? Of cos not lah
    So, watch out, new parliament in Putrajaya, sama sama 1, proposed RM800 million, later will bcome big fat RM1.6 billion leh
    No worry, nation will not b bankrupt, with oil $$ n GST, still got lots of RM 2 makan mah
    Old sh!t in same old sh!t pot, no bother 2 find new bottles, rakyat stupid 1, don’t know SHTF (sh!t hits the fan)

  5. #5 by ekompute on Monday, 14 June 2010 - 3:47 pm

    QUOTE: “In a somewhat self-congratulatory tone, the Plan proclaims that hardcore poverty was reduced from 1.2% in 2004 to 0.7% in 2009 and that the incidence of overall poverty fell from 5.7% in 2004 to 3.8% in 2009. These claims are questionable because of the underlying methodology employed in deriving these estimates.”

    No secret about massaging figures… all public companies do that at the end of the year. We can actually achieve any target we want merely by redefining what hardcore poverty is.

  6. #6 by boh-liao on Monday, 14 June 2010 - 4:20 pm

    D maha racist MMK continues 2 stir up sh!t @ Gertak’s “Melayu Bangkit” rally
    Gertak = “2 intimidate or bully”, obviously
    2 intimidate non-UmnoB Malays n non-Malays

    Now he claimed dat meritocracy would not empower d Malay community but would instead hamper it’s progress; sh!t logic

    He wants rakyat not 2 forget d bludi incident of May 13
    “D bludi incident of May 13 was used as a guideline by d country’s leadership in finding d economic disparity between d poor n d rich, n between d different races.”

    “We do not want to see only one race that is rich n another that is poor,” he said.
    So, which race is poor and which is rich?His billionaire sons n Toyol: r they non-Malays?Among ppl titled Tun, Tan Sri, Dato Seri, d Dato’, how many r rich Malays n non-Malays?Among rich super-scale civil servants n doyens of GLCs n corporate sectors, how many r rich Malays n non-Malays?

    “We are requesting what is ours n not denying what belongs to d other [communities]. We just want a fair distribution of economic wealth,” he said.
    Excellent, Y not distribute d $$$ gotten by his sons n super-rich Malay UmnoBputras n cronies 2 poor Malays n non-Malays?

    Bludi lies n more lies, dis shameful maha racist
    No wonder dis nation remains in big sh!t hole

    For MMK’s information, Sg Malays r doing fine, hv dignity, n embrace meritocracy, thank you

  7. #7 by Jeffrey on Monday, 14 June 2010 - 5:01 pm

    Before we reached the goals set for 8th MP, we set new goals under the 9th and before arrive at that we set another starting point by 10th MP & so on.

    Setting out goals and elaborate plans, whether outline perspective plans or 5 Year Plans written out by Treasury is an unstoppable end in itself.

    Who gotta have goals? Why are they an end in themselves?

    (1) First there is a political purpose. That which is announced covers a wide net of all different groups of people whose votes are canvassed. Appetite of each has to be whetted. Examples, For Bumis, 30% quota remains, a high level committee for monitoring Bumiputra affairs where critical Malay rights NGOs given seats; for Chinese, allocations to schools and special villages; for Indian estate workers, improved access to basic amenities in estates and re-skilling programmes for displayed estate workers; then similarly for the women, the road users, teachers, the disabled, urbanites, the poor and so on. It is like a reminder: “hey I have not forgotten you, so you know how to vote”. Without new plans how to refresh the memory of the different racial, socio-economic, geographical groups?

    (2) Second, the plan will present a road map carving certain areas where the govt is going to spend more money so that beneficiaries of the state patronage system cronies and those connected to power will have a “guide” as to which area to source joint venture partners in advance and lobby for government contracts and patronage.
    It does not matter whether the 10 MP will be achieved or we have the means to achieve its goals because later there will be always be the 11th MP and the 12th that comes after, and the cycle goes on and on as an end by itself to serve the above dual principal objectives on a perpetual basis.

    That’s the genius of the system – of not crystallizing and attaining goals by discipline, but setting new goals all the time – in visionary and inspiring and bombastic terms eg “internally driven, externally aware, leveraging on diversity internationally, unleashing productivity-led growth and innovation, nurturing, attracting and retaining top talent, concentrated growth, inclusive development” etc – as a way to camouflage difficult or insoluble problems of either fast depleting revenues or racial/religious polarization under the guise of economic opportunities for all!

    Like a ship losing sight of shore but still setting new directions to discover new oceans, the end is in the sailing, not arriving at safe harbour.

  8. #8 by Loh on Monday, 14 June 2010 - 6:00 pm

    ///On the flawed basis, 228,400 households were categorized as poor. It is most significant that of these 99,100 were in Sabah with another 27,100 in Sarawak. Thus, there were a disproportionate number of the poor in these two states highlighting gross neglect by the Federal government of Malaysians in these two states.///–Kit

    Sabah and Sarawak house half the poor households in the country and yet Sabah and Sarawak provided more than half of the total Petronas revenue. Had Sabah and Sarawak state government retained the right to oil revenues rather than the 5%, they could have wiped out poverty entirely.

    NEP aimed at giving Malays 30% of equity share capital in the country. The NEP policies implemented over the past 40 years have not been getting the poor households, particularly the Malays out of poverty trap, and make them contribute to the ownership of share capitals with their own resources but it concentrated in diverting resources such as through the APs scheme which privatized wealth and socializing poverty, in making some families, said to be Malays according to Article 160 on the interpretation of Malays but very different from the Malays that Malays themselves would be ale to know by sight but of Mamakdthir type of Malays , billionaires. It seems that the wealth owned by the pseudo-Malays would make the ordinary Malays proud so that they would think nothing of running amok to perform the May 13, which Mamakthir claims that that was the outcome of class struggle.

    Had the revenue that could have been collected through the APs scheme been used to benefit the poor rather than making billionaires out of a pseudo-Malays, the 200,000 poor households would have been out of poverty for a year. But BN government believes that it is better to have a billionaire so that true Malays could be proud of their ‘race’ at the expense of having 200,000 Malaysians remain in poverty. Yet the government always claims that NEP is needed to remove poverty. The only plausible explanation of the actions by the BN government is that it needs poverty to justify the continuation of NEP, and they need the NEP to continue giving government resources to the selected cronies so that they can remain in position to milk the country and send it to become Zimbabwe.

    NEP has succeeded in improving the education standards of Malays. Over the past 40 years the first batches of NEP beneficiaries have gone into retirement, and so it is fair to say that the Malays, at least 95% of them have benefited from NEP-led education policy. But are we to believe that having gained through the education provided, the Malays have still not understood the game of UMNO leaders who made use of the name and dignity of the Malay ‘race’ to enrich only themselves as well as converting the Malaysian civil services to behave almost like the corrupted political leaders so much as that the ordinary people now cannot even expect that the government would able to look after the security of the ordinary citizens through their police. Are the UMNO Malays so convinced that they gain through the trade-off of seeing Ketuanan Melayu at the expense of their own security, purchasing power and environment for entering a high income economy? If not, how can we explain that UMNO retain the political power despite the widespread corruption, such as the PKFZ scandals? It appears that with the new MCA leadership, PKFZ is now a non-issue.

  9. #9 by HJ Angus on Monday, 14 June 2010 - 7:05 pm

    para 6
    Converting the number of households to a “persons” basis, (228,400 households X 6.4 persons per person)

    Think this is an error:
    should be:
    (228,400 households X 6.4 persons per household)?

    [Corrected. Thank you for being sharp-eyed. – Admin]

  10. #10 by cinaindiamelayubersatu on Tuesday, 15 June 2010 - 9:49 am

    south korea 2 : greece 0
    japan 1 : cameroon 0
    malaysia : bola boleh bola boleh bola tak boleh ahmoi boleh…..

  11. #11 by BoycottLocalPapers on Tuesday, 15 June 2010 - 11:56 am

    Malaysia’s UMNO regime and the opposition party leaders Anwar Ibrahim & Nik Aziz don’t give a damn thing about poverty in Malaysia. They don’t care about the poor in Kelantan, Sabah and Sarawak.

    Malaysians (generally) prefer to help the Palestinians (some of them are children of terrorists) than helping the poor in Sabah and Sarawak.

    Why can’t we see UMNO regime sending flotilla to Sarawak to help the poor Penans who are the real bumiputera of Malaysia?

    Why UMNO regime & Pakatan Rakyat prefer to spend millions on Palestinians?

    UMNO regime & Pakatan Rakyat leaders neglect fellow Malaysians so that they can look good in the eyes of their so-called Arab brothers.

    If Tsunami strikes Malaysia, those so-called Arab brothers won’t give a damn about the lives of Malaysians as you can see for yourselves what happened after the 2004 Tsunami.

    It will be the Americans (whose flags and effigies of their President UMNO and Pakatan Rakyat leaders love to burn) who are going to come and rescue all of us.

    Recently, Nik Aziz the Minister of dirt poor Kelantan, spent millions to help Palestinians to study in Malaysia.

    Why don’t you spend that money to help the poor discriminated and persecuted Penan in Sarawak? They need that money more than the rich Arab kids.


    Helping Palestinians will not help Malaysia’s economy to recover as most of these Palestinians will go back to Palestine to commit suicide bombing in order to kill the Jews.

    Why can’t UMNO regime and Pakatan Rakyat leaders understand that?

    Don’t waste your money and your time on Palestine!

    Use that money and your time to help fellow discriminated and neglected poor Malaysians like the Penan, Orang Asli, and other aborigines of Sabah and Sarawak.

    Why the plights and suffering of the Penans and Orang Asli are not highlighted daily on TV3, RTM1, RTM2, and local newspapers? Why are you bombarding us with biased reports on Arab-Israel conflicts?

    Malaysia is hopeless because the ruling regime and the Opposition Leaders don’t give a damn about the poor in Malaysia.

  12. #12 by lopez on Sunday, 20 June 2010 - 9:46 pm

    you people yelling so aloud and no one can hear….
    others can hear just whispers over thousands of miles away in the deserts

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