Malaysia’s Revised Poverty Line Income

art-456-01A view of Kuala Lumpur, capital of Malaysia

Following a revision of its poverty line income (PLI) methodology that was last updated in 2005, Malaysia’s monthly PLI is now at RM2,208 per household – an increase from the previous value of RM980 per household.

Using the new methodology to measure poverty in both 2019 and 2016, this means that the poverty rate in the country declined to 5.6 percent (405,441 households) in 2019 from 7.6 percent (525,743 households) in 2016.

This differs from the 2016 poverty rate of 0.4 percent or 24,700 households when calculated with the 2005 methodology.

“This clearly shows the poverty eradication programmes and initiatives carried out by the government, supported by various parties such as non-governmental and private bodies, have yielded good results,” said Minister in the Prime Minister’s Department (Economy) YB Dato’ Sri Mustapa Mohamed in a statement in conjunction with the Household Income and Basic Amenities Survey Report and Household Expenditure Survey Report that was released by the Department of Statistics Malaysia in July 2020.

The latest PLI methodology is designed to reflect the current needs and consumption patterns, as well as demographics of Malaysian households, in line with the country’s development thus far.

It improves from the 2005 methodology in terms of three aspects: optimal minimum food intake that emphasises healthy living; quality non-food basic requirements for the B40 group that have increased from 106 to 146 items; and changes in household spending patterns and prices of current goods and services between 2005 and 2019.

With the new national PLI now in place, Dato’ Sri Mustapa urged government agencies and state governments to take into account the latest PLI when developing programmes and policies in relation with poverty eradication and social assistance, as well as reviewing existing ones.

“By using accurate statistics, the government will be able to formulate strategies and policies.

“It can also design a more appropriate, dynamic and pragmatic approach for each target group, including in preparing the 12th Malaysia Plan (2021-2025) which will be presented early next year,” he said in his statement.

 

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