A RM2,500 Salary May Soon Be Considered 'Urban Poor' By The Government

Malaysia's previous poverty line was set at a salary of RM980, which may have wrongly reflected the country's actual level of poverty.

Cover image via S.Mahfuz/BeritaBenar & AFP/The Straits Times

UPDATE: The Department of Statistics Malaysia has revised the poverty line. Read the full story here.

Households earning RM2,500 a month may soon be categorised as 'urban poor', according to a new income poverty line (PGK) based on 2019 methodology

According to Bernama, Minister in the Prime Minister's Department (Economy) Datuk Seri Mustapa Mohamed said a new PGK will be announced soon to reflect the country's new and actual poverty level.

The Department of Statistics had conducted a survey on household income and expenditure, as well as basic amenities between January and November last year to obtain the actual figures on poverty in Malaysia.

"Several committees have been set up to study these figures and the results had been tabled twice to the Cabinet," Mustapa told reporters after the launch of the 2020 Population and Housing Census at the Putrajaya International Convention Centre on Tuesday, 7 July.

Image via The Vocket

The United Nations had previously claimed that Malaysia's poverty rate of 0.4% in 2016 was unrealistic given the low benchmark of RM980

Mustapa admitted that the previous RM980 PGK based on 2005 methodology was no longer relevant and gave an indication that the poverty rate would certainly be higher.

"In 2005 the per capita income was RM20,000, but now it has gone up to RM45,000. This means that the per capita income has doubled, so it is unlikely that the PGK will remain at RM980," he said.

"Under the 2019 methodology, firstly, the figure will be higher than RM980, secondly, the poverty rate will definitely be above 0.4%."

Image for illutration purposes only.

Image via S.Mahfuz/BeritaBenar

An economic analyst suggested that the new PGK should be revised according to specific localities across the country

Professor Datuk Dr Shazali Abu Mansor told Berita Harian that there is a difference in cost of living between the different cities.

For example, he said the income of RM1,500 a month may be sufficient for a household in a city such as Kota Bharu in Kelantan but certainly not enough in a bigger city.

"In Kuala Lumpur, the salary of RM2,500 a month may be categorised as urban poor. Because of that, the new PGK should be revised according to localities and cities," said the senior lecturer from the Economics and Business faculty at University Malaysia Sarawak (UNIMAS).

He added that this categorised PGK would help the government to plan economic policies more carefully and precisely.

The government is trying to repair the economic crisis exacerbated by the COVID-19 pandemic: