The politics of poverty

Much has been said on the poverty line income (PLI) since a UN expert on poverty disclosed that Malaysia might have grossly underestimated the number of households living below the poverty line.

Currently, the official figure on poverty stands at 0.4% of the total households, which according to UN’s estimate should be actually around 15-20%.

I am surprised no mainstream economists, social advocates, politicians and government agencies such as the Treasury and Economic Planning Unit (EPU) have talked about PLI in recent times.

It is a shame we need a UN expert, Philip Alston, to remind us we might have grossly underestimated on the number of households living in absolute poverty in Malaysia.

At least now, Prime Minister Dr Mahathir Mohamad has agreed to look at this “magic” line and, if possible, to revise it. I think this is definitely the correct thing to do.

Come to think of it, what can RM980 a month, which is the current PLI, provide for a family of four? Common sense would have told us that the threshold used is grossly out of date and inaccurate.

In case many have not realised it, a decade of so-called “high income” economy has actually rattled many people in the country.

People are suffering from the escalating cost of living.

When the high-income policy was introduced by the previous administration, many had reminded the government that we can’t “wish” or “talk” up our income. If it was so simple, many countries would have achieved “high income” by now.

High income is the consequence of sound macroeconomic policies applied over time, period. Today, what we face is high cost, not high income.

Coming back to PLI, I think setting a new threshold to reflect the reality on the ground is simple and straight forward if the government is sincere and honest.

I do not need any study, I know RM980 a month for a family of four is ridiculous and absurd, regardless of the locality.

There is no need to defend this number any further as some quarters in the Pakatan Harapan government are trying to do.

We stay in this country, we ought to know the value of the ringgit and the actual inflation that has taken place. Again, without any study, RM2,000 a month may be barely sufficient to provide a decent living for a family of four in this country today.

So over to the government: study whatever you need, but please don’t take too long. If we want to get things done, we must define the problems properly.

TK Chua is an FMT reader.

The views expressed are those of the author and do not necessarily reflect those of FMT.