Introduction
THINK PCDS 2030 is a series of articles on current and pertinent issues related to the Post-Covid19 Development Strategy (PCDS) 2030 initiative outlined for Sarawak. The articles are written by officers and members of the Institute with the main aim for the articles is to stimulate public interest in the subjects discussed and contribute towards better-informed decision-making processes in Sarawak, in both public and private sectors. THINK PCDS 2030 is an off-shoot of the previous THINK articles done by the Institute.
Feedback and comments are welcome and can be sent to THINK@sdi.com.my
Poverty: A Perennial Social Issue
By Yuen Kok Leong, PhD, Sarawak Development Institute
As a research institute focusing on development, one of the Sarawak Development Institute’s focuses that don’t seem to ‘go away’ is Poverty. While new research areas such as Environmental Sustainability and Digital Inclusivity appeared as new and attractive domains for our empirical inquiries, poverty remained a classical ‘unsolvable’ issue, one that we cannot turn our eyes away from.
The predicament could be comprehended by looking at how economists define poverty; through the concepts of absolute and relative poverty. Stated simply, absolute poverty is poverty where people are ‘really poor’ while relative poverty is when they are ‘poorer than their neighbours’. Absolute poverty is measured strictly by income, through Poverty Line income (PLI) which in turn is derived from Consumer Price Index (aggregation of prices of goods and services). When you are absolute-ly poor, you cannot afford your basic daily needs. On the other hand, relative poverty indicates how someone is not getting the same pie as his or her fellow citizens, denying them from participating actively in society . Relative poverty focuses on inequality in income distribution and is measured through Gini coefficient, which indicates how the pie size differs between the “haves” and the “have-nots”.
Poverty can never go away as a social issue because even when absolute poverty is managed well, i.e. most citizens have their needs met, relative poverty will always exist. The ideal condition is when absolute poverty is absolutely eradicated and to focus on your relatives’ relative poverty (terrible pun, we know). Thus, one of the easy tell-tale signs of the general wealth of a territory is whether its governing bodies are concerned with either absolute or relative poverty. By that account, Malaysia and Sarawak still seemingly have much to do to address both types of poverty.
Sarawakian districts have been ranked amongst the nation’s poorest. Pakan was listed as the poorest Malaysian district in 2019 with RM2,760 household income average. Presently, Pusa is identified as one of the poor districts in 2023 to be targeted for Ministry of Economy’s People’s Income Initiative . In an ironic twist, as one of the nation’s regions with highest incidence of poverty, Sarawak is also one of its top GDP contributors. Sarawak appeared to be the third poorest behind Sabah and Kelantan (see figure below).A quick glance at the statistics revealed a clue: Sarawak’s mean income is larger than its median. DOSM noted that the median and mean income for Sarawak are RM 4,544 and RM5,959 (for year 2019); and RM3,831 and RM5,087 (for year 2020) respectively, consistently indicating a higher mean. DOSM statistics for the same years denoted an increase in absolute poverty from 9.0 to 12.9 per cent compared to the national average of 5.6 and 8.4 per cent for 2019 and 2020 respectively.
Incidence of Absolute Poverty by State, Malaysia, 2019 and 2020 (DOSM 2021)
The longevity of poverty issues is in part shaped by its complexity- there is no one universal solution to poverty issues. While the government’s policy to set minimum wage is welcomed to address workforce’s income, the policy is still ambiguous as to how those paid based on piecework, commissions or trip could be remunerated with the implementation of the order , exposing some workforce segments to the cracks in the policy . Locally in Sarawak, the government under the Ministry of Women, Childhood and Community Wellbeing Development (KPWK) is looking to set up a cash-plus programme to tackle child poverty . The variety of government policies to tackle poverty incidences amongst different segments of the population requires comprehensive data to ensure its inclusivity and its subsequent aid delivery. Policymaking requires objective empirical data which necessitate innovative data collection methods.
SDI is exploring how it can aid government policies by planning a series of research centring around but not limited to poverty issues in Sarawak. One possible endeavour is by measuring Sarawakian poverty through Multidimensional Poverty Index (MPI) by taking account of the various deprivations beyond income-based indicators. While being poor in Kuching meant the lack of social support due to migration-led isolation from extended families, being poor in Baram meant the lack of access to basic needs such as water supply and electricity. Measurements such as MPI provides a checklist to diagnose all possible deprivations in ensuring that no one is left behind. The multifaceted diagnosis from MPI contributes by identifying particular deprivations faced by particular communities in which government aid, such as the Cash Plus programme mentioned, can be accurately targeted.