Poverty in Malaysia: Need for a Paradigm Shift

Malaysia aspires to be a developed nation by 2020 and if these development ambitions are to be attained Malaysia needs to reexamine its past approaches to reducing poverty and inequalities in the country. Malaysia is no longer just grappling with absolute poverty but also with relative poverty, pockets of persistent poverty and urban poverty as well as increasing inequalities. While rural poverty still continues to be the focus of policymakers, urban poverty also needs urgent policy attention and prescriptions. Stubborn pockets of poverty continue to elude policy solutions and new forms of poverty are emerging in the context of a country that sees itself as a developed nation by 2020. Close attention has to be paid to income distribution as progress towards poverty reduction is marred unless improvements in income distribution occur alongside poverty reduction. A paradigm shift is needed in the way in which poverty is conceptualized, defined and measured in Malaysia as the reinterpretation of the Poverty and Income distribution data over the last three decades shows that poverty in Malaysia retains much of its original characteristics and income distribution patterns show inter ethnic inequalities remaining and a worsening position for certain ethnic groups. The call for a paradigm shift is further reinforced by the new development direction that is encapsulated in the New Economic Model with its focus on inclusive development and the bottom 40% of the population.