What is to be poor ?

2 days ago, I posted the ‘ Table of millionaires’.

Today I am going to post another table: the distribution of household income in Malaysia.

This is what is written in Wikipedia on malaysian poverty:

The official figure for urban poverty is given as 2%; critics have argued that this significantly underestimates urban poverty, as the poverty lineis set at RM500 per month for a family of four — a monthly income which has been argued as unrealistically low for a family of four to meet its needs

Our official figure is that only about 2 to 3% of population is below poverty line. But looking at the table above, 38% of household has household income below 2000.

Poverty depending on pre-defined ‘poverty line’  and income alone may not be reflective of real situation. This is because those living in cities experience higher standard of living ( a nicer way of saying more expensive living), and it also depends on the number of people in that household. A household earning 2,000 and has only 2 persons, living in a remote area may not be as poor as one with 8 members living in slums in the cities.

So what is actually “being poor’? I think a more appropriate definition is the inability of the household to cope with basic living expenses for the household– the inability to feed proper calorie-sufficient meals, provide basic  education and basic healthcare, with a simple roof on top of its  members.

If we take this as poverty, then the incidence of poverty is definitely higher than 3%. I suspect it will be more in the region of 30%…

To these poor households, it is really meaningless to talk about economic growth of 10%-11% because they just do not feel the effects, if any, of the so-called growth figures.

The challenge to any government is how to bring these households out from poverty  —  a more balanced socially based economic policy  and free  education  (our ‘free’ education has lots of hidden charges) may be the answers.

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10 Comments (+add yours?)

  1. CYC
    Jul 22, 2010 @ 14:23:06

    Gandhi said ” The world has enough food to satisfy our needs but not not our greed”

    Our govt said ” We care to use tricks to satisfy our ego but not your stomach”

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  2. Dr Hsu
    Jul 22, 2010 @ 14:35:55

    Once i spoke to a Singapore taxi driver, and he told me that that he would rather die than be sick, since the cost of medical care is very high there .. The little red dot is also facing this problem of the lower class struggling to make ends meet..In US too..

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  3. petestop
    Jul 22, 2010 @ 16:20:01

    Another way to look at this statistics is that only 1.3mil people pay taxes in this country (this figure from a friend who happen to work for Idris Jala).

    Therefore, only 1.3mil people in this country cares about how the govt spend (or some say waste) our money, while the rest are just waiting for handouts and subsidies.

    Without improving our middle-class (and those who actually felt the pain of paying taxes), we will still have election that can be bought-off openly by the govt-of-the-day.

    Me and my friend, both working senior management level in MNCs have always discussed that in the event we get a terminal illness like cancer, we would rather die as well, instead of wasting all our hard-earned and hard-saved money on treatment that more often than not actually shortens the patient live (just ask any hospice worker), and further financially burdening the family, not even just this generation, but also the next.

    So, it is not just a class struggle, but the reality of life (and the cost associated with it). Just like life insurance, you can only insure yourself up to a point according to your worth. We like to believe all life are “priceless”, but the reality is that, you can actually put a price tag on it and apply mathematics on it, like what insurance underwriters do.

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  4. CYC
    Jul 22, 2010 @ 17:37:34

    Poverty and terrorism comes as twins. So, be very very alert and treat it seriously. Else, we can’t be sure if we will end up as another Afghanistan or Pakistan. Afterall, we have foolishly/ignorantly fans up religious fanaticism out of political convenience in the past 20years. The marriage of these 3 ingredients will suffice to make us a potential 3rd world war zone.

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  5. wisely
    Jul 22, 2010 @ 19:09:00

    I was looking for this piece of info for quite sometimes. I agree with ur analisis. To me, family income below RM2000 should be consider poor and the one draws by govt should be hardcore poor instead!

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  6. Chabalang
    Jul 22, 2010 @ 19:09:57

    1) M’sia poverty line is drawn at RM800/household for whole M’sia (wikipedia is outdated – pls refer to NEM or http://www.themalaysianinsider.com/malaysia/article/how-poor-are-we-really)

    2) Yes, the low poverty line is definitely understating the urban poor. I do agree with your qualitative measures of poverty. For urban area such as KL, poverty line for a household of 4 may be around RM2,000 to RM2,500/monthly. UN typical definition for poverty line is the total cost of all the essential resources that an average human adult consumes in one year.

    3) As for your comment on the taxi driver in S’pore. >80% of S’pore taxi drivers like to whine and complain about the Govt. Yes, life is tough for the lower income group in S’pore just like anywhere in the world. For medical care, S’pore Govt. does subsidize heavily for their basic Class C ward. Govt. hospitals are of relatively higher standard than M’sian ones. The Singapore Govt is well aware of the widening wealth gap and trying to improve the lower income group without limiting earning potential of the top-end group which are globally mobile. If S’pore Govt try to lower the income gap by holding back the top-end group’s income – these group will just leave S’pore and go another more welcoming place (that’s what is happening to M’sia, > 80% of my ex-colleagues are now working/living in S’pore, HK, London or US).

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  7. clearwater
    Jul 23, 2010 @ 09:50:08

    The poverty line cannot be drawn at an imaginary fixed line of RM500 or even RM2000 because of wide urban-rural disparities in earning as well as spending power. In addition, the basket of goods consumed and its price can be vastly different in both settings.

    Your definition of poverty is much truer to the mark and an infinitely better measure. The estimate of some 30% of Malaysian households having difficulty making ends meet may be no exaggeration. They can still manage but not for long if things don’t improve. Many depend on funds remitted from family members working elsewhere to meet expenses.

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  8. Phua Kai Lit
    Jul 23, 2010 @ 11:32:19

    The Gini coefficient is used by economists to measue income distribution.

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  9. Dr Hsu
    Jul 23, 2010 @ 12:15:41

    Unfortuately, malaysia has a very low GINI rankings. In 2005, it ranked 111 out of 127 countries (World Bank report meaning Malaysia has one of the worst inequility of income distribution.

    Country HDI Gini

    Singapore 0.902 42.5

    Malaysia 0.793 49.2

    Thailand 0.768 43.2

    Philippines 0.753 46.1

    Indonesia 0.692 34.3

    Viet Nam 0.691 36.1

    Cambodia 0.568 40.4

    Laos 0.534 37.0

    Source: UNDP Human Development report

    HDI is Human Development index which measures the well beings of the people.

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  10. CYC
    Jul 23, 2010 @ 17:42:20

    Why poor? Is Pemandu doing something about it ? Too petty and not the effort?

    The bigger storm is coming fast and u stay put inside the cave ? But is it safe? What is the “Dao” that leads to liberlisation out of poverty? KTK says “Tak tahu”. Well, he is just being honest and u must practice self reliance instead of looking up for help. UMNO says ” your Dao and my Dao needs to be differentiated in order to avoid confusion. otherwise when everyone tahu, big problem, u tahu”
    —this is the origin of different religion beliefs and ideologies as told by the holy book “Affirmative Dao For Corrupt Mankind” written in year 5000 BC.

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