Poverty reduction plan should be more ambitious, says economist

Free Malaysia Today

6 hours ago

Muhammed Abdul Khalid says one of the 13MP's flaws is its low targets for reducing poverty and narrowing income gap. (Muhammed Abdul Khalid pic)
PETALING JAYA : A targeted reduction of only 1.1% in the incidence of absolute poverty in the country shows a lack of ambition in the 13th Malaysia Plan (13MP), according to an economist.
For Muhammed Abdul Khalid, the objective to bring the rate down from 5.8% currently to 4.7% over the next five years was in sharp contrast to the government's objective to make Malaysia a high-income nation.
'We want to rank among the top 30 nations in the world (in terms of income), which is commendable,' he told FMT. 'On the other hand, we must also ensure that growth is inclusive.'
At a talk organised by Kelab Belia Prihatin here on Aug 14, Muhammed had said that the government should focus more on reducing poverty and narrowing the income gap.
'Only then will we be a developed country, where everyone benefits,' he said.
When tabling the 13MP for debate at the Dewan Rakyat on July 31, Prime Minister Anwar Ibrahim had said that the target was to also eradicate hardcore poverty, which now stands at 0.19% of all households.
Muhammed, who served as Dr Mahathir Mohamad's economic adviser during the latter's second stint as prime minister, also took issue with the RM15 billion increase in development expenditure to RM430 billion compared with the 12MP.
'That is only RM3 billion a year. We need to spend more on healthcare, education and housing. The government has announced plans to build a million new affordable homes over the next 10 years.
'How will this new target be achieved? Who will be responsible for delivering it?' he asked.
Another shortcoming, he said, is Anwar's decision to ignore PR1MA, the previous government's affordable housing programme, despite pledging to build a million affordable homes from 2026 to 2035.
He said another flaw in the 13MP is its low target for narrowing the income gap. 'Income inequality is not being treated with the seriousness it deserves despite it being one of the most pressing challenges,' he said.
'(This is) made worse by the fact that lower-income groups continue to shoulder multiple taxes,' he added.
He described the government's target of narrowing the rich-poor gap by only 1% over five years as 'extremely modest'.
Under the 12MP, the gap as measured using the Gini coefficient was 0.390. The target under the 13MP is 0.386. For Muhammed, it is 'merely symbolic'.
The average Gini coefficient in the Organisation for Economic Cooperation and Development (OECD) is 0.315.
'If the government only aims for a marginal reduction, our inequality gap by 2030 will remain wide and far from the standards of more equitable societies. This is not good for the economy and rakyat,' he said.
In 2020, the statistics department reported that income inequality in the country was higher in 2019 than it was in 2016.