Endorse call for Royal Commission of Inquiry on Poverty in Malaysia

As we approach the 56th anniversary of the formation of Malaysia, on the 16th of September, 2019, we can reflect on some things which we can all be thankful for.

Despite global economic uncertainties, Malaysia’s 2nd quarter GDP grew by 4.9%, the only country in South East Asia where the 2nd quarter GDP growth was higher than the 1st quarter GDP growth.

In the first half of 2019, approved foreign investments in the manufacturing, services and primary sectors increased by 97.2% to RM49.5billion from RM25.1billion in the first half of 2018. The overall unemployment rate remains at a relatively low rate of 3.3% as of June 2019.

However, even as we celebrate the many things which we can enjoy, we must not forget the marginalized communities around us. Poverty and marginalized groups did not disappear overnight after Pakatan Harapan became the government in May 2018. These groups are a stark reminder of how much more work we need to do in order to uplift their lives and the lives of their children.

It is the family of four living in a low cost apartment in the heart of Kuala Lumpur with a household income of less than RM2000. It is the single mother in Lumut who has to take care of her four children after her husband was killed in a motorcycle accident. It is a FELDA family in Rompin whose incomes have fallen in tandem with the fall in the global Crude Palm Oil (CPO) prices. It is the families of former rubber estate workers who have to transition to making ends meet in the urbanized world that has developed around them. It is the Orang Asli families in Gua Musang who have unstable incomes because deforestation and illegal logging have decreased their access to food sources and other resources from the forest. It is the Penans in Sarawak who find their land and livelihood taken away from them as a result of corrupt land deals. It is the Bajau Lauts in Lahad Datu whose children face bleak economic prospects because of their statelessness restrict their schooling options.

Anecdotally, many Members of Parliament would not have the impression that Malaysia’s poverty rate has dropped to a mere 0.4%. This works out to be approximately 27,000 households below the poverty line income (PLI) out of a total population of 6.7 million households. This translates into an average of 121 households below the PLI in each of the 222 parliamentary constituencies. If we judge by the number of people who come to our service centers to seek for financial assistance, this low poverty rate does not seem to reflect the reality on the ground.

The need to look or relook the PLI has been something which PH MPs and our parties have supported before GE14.

Institut Rakyat, a PKR think tank, asked the then government to use relative poverty rather than only relying on absolute poverty based on the PLI.

MP for Klang, Charles Santiago, have raised issues to do with the poverty line way back in 2008.

In 2014, then MP for Lembah Pantai, Nurul Izzah, called for the use of a Multidimensional Poverty Index (MPI) to better reflect the incidence of poverty on the ground. This was later introduced in the 11th Malaysia Plan.

In my own speech in the parliamentary debate in April 2006 on the 9th Malaysia Plan, I also highlighted the need to have more accurate measures of poverty in the country.

The academic and research community in Malaysia have long had many inputs with regards to the understanding and measurement of poverty.

Professor Ragayah Haji Mat Zain, a noted scholar of poverty in Malaysia, highlighted the need to update poverty measurements including the poverty line income (PLI) in her research.

More recently, the Khazanah Research Institute (KRI) has highlighted the need to measure relative poverty to complement more updated measures of absolute poverty in the country.

In February 2018, a study published by UNICEF and DM Analytics found that almost all of children living in low cast apartments in KL were in relative poverty and 7% were in relative poverty.

The rate of stunting among these children, which is a measure of the lack of access to adequate food, stood at over 20%. This led the study’s chief researcher, Dr. Muhammed Abdul Khalid, who is now the Prime Minister’s Economic Advisor, to say that this has reached crisis levels.

I also note that Dr. Muhammed, in a recent column in Sinar Harian, has called for our poverty measures to be updated including adjusting the measures of the MPI and to take into account relative poverty.

Read in this context, the recent comments made by the UN special rapporteur on extreme poverty an human rights, Professor Philip Alston, on the 23rd of August 2019, which included the assertion that Malaysia undercounts the number of poor, should not be that surprising.

The call to have more transparent publication and sharing of micro level data for the household surveys which are used to measure poverty is also not something new. Noted scholar of poverty, Professor Martin Ravallion, who held the Royal Ungku Aziz chair of Poverty Studies at Universiti Malaya (UM) made the same observation earlier this year.

I am glad to note that Prime Mininster Mahathir has said that the government will study carefully the report published by the UN special rapporteur and that the government will review the poverty measurement if necessary.

Ultimately, any changes in the way we measure poverty in Malaysia should not be merely a technical exercise. These measurements have to be updated so that we can use them to better target our policies to help the marginalized groups especially the B40 communities. This point was clearly made by Christopher Choong, an economist at the Khazanah Research Institute (KRI).

Encouragingly, the new PH government is already focused on the needs of the B40 communities and have introduced new policies in the past year which target the B40 specifically.

This includes the MySalaam automatic social protection scheme, the Peka B40 health care scheme, the I-Suri EPF contributions for B40 housewives, just to name a few.

I am sure that policies which are better targeted can be implemented with an updated measurement of poverty. Prime Minister Dr. Mahathir’s call for the government to focus on “Shared Prosperity” is also consistent with a focus to uplift the livelihood of the B40 groups.

Of course, we must be cognizant of possible attempts by certain groups to ‘blame’ the PH government for any increase in the poverty rate if the poverty line income as well as the MPI measures are adjusted upwards and if relative poverty measures are introduced. In this day and age of rampant ‘fake news’, it would not be surprising if someone, DAP will be blamed for this!

But we should not be afraid of this challenge. As noted by World Bank Senior Economist, Kenneth Simler, “it will take political courage, and good communications, to raise Malaysia’s official poverty standards” even though, “inevitably some will claim, incorrectly, that poverty has increased”

To this end, I support the call by certain NGOs and individuals to form a Royal Commission of Inquiry (RCI) to study the contents of the UN special rapporteur’s report and to make recommendations on how to improve the measures of poverty in Malaysia. I also propose the following persons as members of this RCI:

1. Tan Sri Dr. Kamil Salih, current chairman of the Malaysian Institute of Economic Research (MIER) and highly respected academic and economist – to be the chair of this RCI;
2. Datuk Dr. Denison Jayasooria – a professor at IKMAS, UKM with a long track record of research and experience in poverty studies and inter-ethnic relations;
3. Dr. Lee Hwok Aun – researcher at the Yusof Ishak Institute of Southeast Asian studies and one of the co-authors of the 2013 Malaysian Development Report;
4. Associate Professor Dr. Madeline Burma – current SUHAKAM commissioner and director at the Tun Fatimah Hashim Women’s Leadership Center at UKM;
5. A representative from the World Bank Research Group in Kuala Lumpur;
6. A representative from UNICEF Malaysia.

I encourage Malaysians to propose additional names of individuals who are apolitical and can provide technical and on the ground experience in the area of poverty research and policy.

When the marginalized groups in Malaysia can partake in our vision for shared prosperity, we will be able celebrate Malaysia Day in the future with greater conviction!