Perikatan Sticking To ‘Misleading’ Poverty Rate: UN Report

Government cash handouts to the bottom 40 per cent (B40) are too small to make a real difference, says Philip Alston, a former UN Special Rapporteur on extreme poverty and human rights.

KUALA LUMPUR, July 6 — The new Perikatan Nasional (PN) government has backtracked on the previous Pakatan Harapan (PH) administration’s commitment to reviewing the almost zero official poverty rate, said a United Nations report.

Philip Alston, a former UN Special Rapporteur on extreme poverty and human rights, who visited Malaysia from August 13 to 23 last year, noted that then-Prime Minister Dr Mahathir Mohamad had committed to revising the 2016 national poverty rate of 0.4 per cent, after Alston said then that Malaysia’s stand on virtually eliminating poverty was based on a “statistical sleight of hand”.

“However, the new government’s formal response to the Special Rapporteur’s report throws that commitment into doubt, stating that it ‘stands by [the] absolute poverty rate’,” Alston wrote in a report that will be presented by his successor, Olivier de Schutter, at the UN Human Rights Council tomorrow.

“The government’s reversal is deeply concerning because the current line is inadequate and almost universally considered to be misleadingly low,” he added in a statement.

“The insistence that the line is ‘derived from internationally accepted standards’ is a smokescreen and ignores the blatant mismatch between reality and statistics. Pretending that almost no one in the entire country lives in poverty doesn’t change the reality that millions are poor. Saving face is one thing, but distorting the facts is quite another.”

Alston refuted officials’ claim during his visit that only “pockets” of poverty remained.

“The use of a very low and entirely unrealistic poverty line obscures the more troubling reality that millions of people, in both urban and rural areas across the country, scrape by on very low incomes with tenuous access to food, shelter, education and health care, and limited ability to exercise civil and political rights.”

Philip Alston,  former UN Special Rapporteur on extreme poverty and human rights

The national poverty line of RM980 (US$235) per household per month would see an urban family of four surviving on RM8 (less than US$2), per person per day, which Alston described as a “tragically low line for a country on the cusp of attaining high-income status.”

He stressed that urban poverty was “significant” in Malaysia, disputing the mainstream narrative that poverty was mostly confined to small numbers in rural areas and indigenous people.

Alston pointed out that 27 per cent of households in Kuala Lumpur earned less than Bank Negara’s estimate of the living wage for the city in 2018, even though the official 2016 poverty rate for the capital city was 0 per cent.

“A survey of people living in low-income apartments, carried out in 2018, found 7 per cent of people living below the national poverty line, 85 per cent in relative poverty and 99.7 per cent of children in relative poverty.

“One soup kitchen director said she served up to 700 people a night, and that more than 40 soup kitchens operated in Kuala Lumpur. None of this points to a city that has eliminated poverty,” said Alston.

He also quoted independent analysis that found a much higher poverty rate with a more realistic poverty measure, citing economist Martin Ravallion’s projection of a 20 per cent poverty line in Malaysia, Khazanah Research Institute’s household poverty figure of 22.2 per cent, and a Unicef estimate of 16 per cent of Malaysia’s population being in poverty.

Malaysia’s social protection system, Alston said, was fragmented, inadequate, underfunded and poorly targeted, as the government told him that there were at least 110 different programmes spread across more than 20 ministries and agencies.

Malaysia is projected to record one of the lowest levels of fiscal revenue in proportion to its gross domestic product (GDP) in 2020 (17.9 per cent), well below the average for upper-middle-income countries (28 per cent) and down from 25.8 per cent in 2012.

He observed that Malaysia’s social protection spending has, unusually, not risen in step with the GDP.

“Better targeted and implemented fiscal policies would readily enable the government to develop a comprehensive and integrated social protection policy that will provide for all Malaysians across the life cycle.”

Government cash handouts to the bottom 40 per cent (B40) were too small to make a real difference, said Alston, adding that these transfers would be more meaningful if they were targeted at poorer households or those with more children, or if overall funding was increased.

“Many of those who most need social protection or cash transfers appear unaware of the programmes or unable to access them and the Special Rapporteur met many struggling low-income families receiving no support whatsoever.”

Alston also slammed Malaysia for its lack of transparency around publicly held data, pointing out that Malaysia does not provide full access to key household survey microdata. The government also “systematically” excludes millions of non-citizens from official poverty figures, including migrants, refugees, stateless people, and unregistered Malaysians.

“The illusion of poverty eradication has been reinforced through the deliberate exclusion of vast numbers of people from statistics and analysis in Malaysia.”

Philip Alston,  former UN Special Rapporteur on extreme poverty and human rights

He noted, for example, that the Ministry of Housing and Local Government told him no records were kept on the number of people evicted from public housing.

“Officials were consistently unwilling or unable to estimate the size of vulnerable populations, for which the government does not publish official figures. They could not provide estimates of undocumented immigrants, stateless people or those in need of low-cost housing, even though other countries routinely create such estimates, which are essential to informed policymaking.”

Existing data on poverty and inequality is not disaggregated by gender, nor does it distinguish between Malay and non-Malay Bumiputera, which Alston said obscured the situation of indigenous people.

Income and poverty statistics are often presented by household, rather than the more common and helpful unit of household income per capita or per adult, which Alston said obscured smaller incomes per person in larger households. This also skews ethnicity figures because the categorisation is based entirely on the ethnicity of the head of household and does not adequately capture multi-ethnic households.

“The government has a real opportunity to become a true champion of poverty reduction by improving the lives of many facing hardship and realising the poverty eradication ambitions of the new economic policy,” Alston wrote.

“The Special Rapporteur met with many politicians and government officials who were clearly dedicated to improving the well-being of the poorest people and marginalised groups.

“The government should capitalise on this goodwill by correcting the narrative around poverty, providing those living in poverty with the support they need and ensuring that the country’s economic growth is truly inclusive and benefits the entire population.”

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