Sarawak third highest in absolute poverty level

By S. Harrish

MALAYSIA’S poverty line income (PLI) has been revised from RM980 to RM2,208, which means that over 400,000 households in the country with monthly incomes below this level were considered poor in 2019.

The Department of Statistics Malaysia (DOSM) said that based on the new poverty line income, Malaysia’s poverty levels have fallen in 2019, when compared to the last available figures in 2016.

Malaysia’s chief statistician Datuk Seri Mohd Uzir Mahidin said the new figure was based on changes in methodology that now emphasised healthy eating and quality basic needs.

The previous 2005 methodology was based on the minimum food requirements of each household member and 106 non-food items based on the spending patterns of the country’s bottom 20% group (B20).

The new 2019 methodology was based on optimum food requirements and healthy eating, as well as 146 non-food items from the B20 households’ spending pattern.

Under the new methodology, calculations for the food component of the PLI are now based on servings according to food categories that are converted to price, instead of the previous methodology based on the individual’s calories requirements.

The recommended food servings include fish, poultry, meat, cereal, bread, rice, eggs, vegetables and milk.

As for non-food items, those covered are clothing and shoes; housing, fuel and utilities; furniture; transport and communications; education and health.

By using the new methodology, Malaysia’s absolute poverty rate would be recorded as improving from 7.61% in 2016 to 5.6% in 2019. This would translate into a decrease in households considered poor, namely a drop from 525,743 households falling below the poverty line in 2016 to 405,441 households in 2019.

When it comes to absolute poverty levels among states in 2019, Sarawak was third highest at nine percent.

Top on the list is Sabah (19.5%), followed by Kelantan (12.4%), Kedah (8.8%), Perak (7.3%), and Terengganu (6.1%). The other states were below the national absolute poverty level of 5.6 per cent, namely Negri Sembilan and Pahang (4.3%), Melaka, Perlis and Johor (3.9%), Labuan (3.1%), Penang (1.9%), Selangor (1.2%), Putrajaya (0.4%), and Kuala Lumpur (0.2%).

The new methodology would also translate to a decrease in absolute poverty in Malaysia’s urban and rural areas to 3.8 per cent and 12.4 per cent in 2019, down from 4.8 per cent and 17.5 per cent in 2016 when the new methodology is used on 2016 figures, DOSM said.

In contrast, the DOSM said that using the 2005 methodology would result in a national PLI of RM983 in 2019 and RM980 in 2016.

This would have resulted in Malaysia’s absolute poverty rate being recorded at 0.4% in 2016 and 0.2% in 2019, or just 24,673 households in 2016 and just 16,653 households in 2019 being officially considered poor.

The old 2005 methodology would also have translated into zero levels of hardcore poverty being recorded in 2016, and just 0.02% or 1,752 households considered as being hardcore poor in 2019.