Dr. Raman Letchumanan
Amid the posh, pompous and luxurious settings during the launch of the Malaysia Madani slogan, the above quote by Prime Minister Datuk Seri Anwar Ibrahim stood out like a sore thumb. Anwar was referring to the 136,000 households who are trapped in hardcore poverty (kemiskinan tegar) as of July 2022, barely surviving with less than RM1,168 per month.
Ironically, he was addressing the same leaders present – executive, political leaders, senior civil servants, corporate bigwigs, the rich and powerful – and I doubt they even shed a tear. Meanwhile, the hardcore poor would be wondering what all this meant to them, if at all they had a chance to hear Anwar’s amanat.
Leaders have come and gone, promised the moon and heaven, spent billions, but the latest statistics show the number of hardcore poor is steadily increasing.
I was even more blunt, when I questioned – in my opinion piece captioned “12MP: As Malaysia gets richer, do Malaysians become poorer?” dated Oct 27, 2021 - whether entrusting the leaders in the Top 10 category (T10) to address the woes of the most neglected community in our midst is a wise move.
Anwar promises a new paradigm of governance, among others, to alleviate the hardcore poor, but depends on the same category of leaders to make it happen. Whether this call will remain a soundbite, or come to bite the foreign sounding madani slogan is yet to be seen.
When Anwar held his first press conference upon his appointment, I suggested he donate his salary he refused to accept for the meaningful purpose of alleviating hardcore poverty. Subsequently the Cabinet decided ministers would take a pay cut, and combined with donations from other leaders, a fund could have been immediately set-up to address hardcore poverty. We are not sure now, what happened to all these sacrifices of our leaders, and for what purpose the savings are used for.
Let me reiterate a common sense and workable remedy to alleviate hardcore poverty which I will further elaborate here. But before that let’s look holistically at the root cause of increasing incidence of hardcore poverty.
Malaysia rich, but poor getting poorer
The table below is an updated version focusing on the latest poverty levels. For a full discussion, please refer to my article cited above.
A cursory glance as this table reveals the following:
1. Hardcore poverty has increased from 27,158 households in 2019 to 78,000 (2020) and 136,000 as of July 2022. Granted Covid-19 lockdowns had affected the economy, but where did the record RM600 billion spending go to. Shouldn’t it have been used to ring fence the hardcore poor as a matter or priority?
2. It seems while we aim to become a high income nation at GNI of RM57,882, the flow of wealth from the leaders gets choked off from the B60 of population. The Top 20 gets to enjoy all the wealth defying the trickle-down effect. Even when labor productivity increases three-fold, employee compensation and B40 household income remains stagnant, even lower than the 11MP target. The 12MP target Gini Coefficient, a measure of spread of wealth, is even lower that the 11MP target.
3. The B40 income in current prices is further strained by high inflation, reducing their purchasing power, and causing much anguish even among M40.
4. Furthermore, opening the flood gates to foreign labour is going to further depress local wages. Already the government has delayed implementation of minimum wage of RM1,500 for SMEs, the biggest employer of mainly lower income group.
The much touted 12th Malaysia Plan with its modest targets was written in a silo format to conform to the current government structure of ministries. In fact, much of the information above has to be scoured from various chapters. It implies the government is working in silos and protective of its own turf in policy making.
As explained above, the labour policies are not pro-poor nor pro-development. Economy is about striking the right balance between supply and demand driven by perfect market conditions. Economy minister Rafizi Ramli mostly talks about boycotting essential goods and high-priced establishments, basically curtailing demand, but that is the job of other ministries such as domestic trade and cost of living. Rafizi should be focusing on the supply side, creating quality jobs, value-add industries, increasing production and investments. The 12MP needs a major revision of its pathetic targets. It is essentially Malaysia’s plan to make the rich richer, poor poorer.
The point I am making here is the poor, especially the hardcore, invariably fall in between the cracks of the rich making even more money, and the government working in silos and cross-purposes. These are the ‘leaders’ Anwar is preaching to, to alleviate hardcore poverty in particular.
Trust fund for hardcore poverty
I would suggest Anwar establish a dedicated minimum RM1 billion trust fund for hardcore poverty eradication. Even if we have to borrow, it wouldn’t make a dent to the RM1,500 billion national debt. But this will be money well spent, and will pay for itself many times over. Hopefully Anwar can announce this in his 2023 Madani Budget.
This fund should directly reach the hardcore poor, delivered through civil society which knows where the hardcore poor are and what they need. Apart from handouts, the hardcore poor have to be nurtured continuously to build up a self-sustaining productive life. Many civil society organizations are spending their time, effort and resources working the hardcore poor, but they need the financial boost to sustain their work.
And please, no more intermediaries like the government agencies or relatives of politicians who tender out contracts for 3-5% commission.
Former premier Ismail Sabri said too many agencies and programs are targeting the poor, but with no coordination or consultation. Yet the 12MP proposes another layer of bureaucracy by “establishing a special unit staffed by competent personnel to address poverty in a holistic manner”. Guess all those handling poverty before were not competent!
Anwar said, “The condition is that we have to stop political leaders, civil servants or enforcement bodies from the habit of robbing the nation’s riches”. He further added that he will not tolerate those who use “contract” and “projects” as opportunities to seek wealth that do not belong to them.
Well, I have said the same things in my writings before. The defenceless and voiceless poor are prime targets for these leaders. Otherwise, why do we have so many hardcore poor despite spending billions?
At the moment, there is a heated national debate between rival political parties on what constitutes corruption and charity in the context of elections. But to the poor all this debate is just hogwash, as long as someone feeds them.
Prime Minister Anwar Ibrahim should realize if the poor are well taken of, they will vote with their feet not their stomach. And the states with the most poor are Sabah, Kelantan, Sarawak, Kedah and Terengganu. So, eradicating poverty will pay political dividends.
True leaders don’t need a slogan to do what is right for the survival of the poor - and the politicians themselves.
Raman Letchumanan PhD, is former Senior Fellow at the Nanyang Technological University in Singapore, former director (environment) at the Ministry of Science, Technology and Environment, and former head of environment/disaster management at the ASEAN Secretariat in Jakarta.
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