Poverty and Gini reduced, average household income increased but…

March 28th, 2013 by poobalan | View blog reactions Leave a reply »
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Good news indeed, right? I’m sure no one will be unhappy to hear that poverty is reduced. That will contribute a lot towards reducing crime and social problems (barring foreigners-linked ones).

Average household income increases..definitely good news for businessmen as family should have more purchasing power. Can go for movies at cinema, buy more books, enjoy eating out with family once in a while, go on short domestic holiday (hey, maybe even overseas with Everyone Can Fly!), take up some insurance policy, send kids to tuition, renovate house…whoa the list can go on and on. Our household income increased by nearly RM1000 in 3 years (2009-2012), from RM4025 to RM5000 per month. That’s a annual growth of 7.2% it says. The urban household (with more than 2/3 of Malaysians living in urban area) grew 6.6% per annum from RM4,705 a month in 2009 to RM5,742 in 2012, while rural household income grew 6.4% a year from a monthly average of RM2,545 in 2009 to RM3,080 in 2012. (Questions whether its enough to buy a house is not relevant). So, how many of your got a average 7% increase in income per year? Should be a lot of us, right?

And what about the Gini coefficient? Basically, the lower the value of Gini, the better it is because it portrays the inequality of wealth distribution (higher value means rich becoming richer, poor becoming poorer). We registered a drop of 0.01, from 0.441 to 0.431. So the gap between Ananda Khrishnan and myself has been reduced, well probably a miniscule amount, but still REDUCED! 🙂

So, what is the definition of being poor? Want to check out an old article of mine about Budget 2013? Not so old actually.

Ok, let’s read the article from Star below and feel an unexplainable pleasure. Then proceed to article  that appears after that.

Malaysia more than halved its poverty statistics over the past three years, with the number of poor people now standing at less than 110,000 nationwide, said Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop.

He said the country’s overall poverty rate dropped to 1.7% in 2012, compared to 3.8% in 2009.

“With this achievement, the target under the 10th Malaysia Plan to reduce overall po­verty to 2% in 2015 has been achieved three years earlier.

“This is a result of rapid economic development and the effectiveness of poverty eradication programmes carried out by the Go­­vernment,” he said at a press conference to announce the findings of the 2012 National Household Income Study here.

He said the fall in incidences of poverty happened in both urban and rural areas, with urban poverty falling to just 1% last year compared to 1.7% in 2009, while rural areas registered a significant drop from 8.4% in 2009 to just 3.4% in 2012.

Sabah registered the biggest reduction in poverty from 19.7% of the population in 2009 to 8.1% three years later.

The minister said all states registered a reduction in poverty rates, with marked improvements in Penang, Selangor, Malacca and the federal territories – all of which ave­raged 0% hardcore poor in their areas as at 2012.

“This is proof that the Federal Government’s initiatives to eradicate poverty have succeeded and been of benefit to the rakyat regardless of differences in political ideology,” he said.

Meanwhile, Malaysians enjoyed an annual increase of 7.2% to their average household income over the 2009-2012 period, or a nearly a RM1,000 hike in their average monthly income from RM4,025 in 2009 to RM5,000 in 2012.

Despite similar growth rates, urban household income grew at 6.6% per annum from RM4,705 a month in 2009 to RM5,742 in 2012 while rural household income went up at a rate of 6.4% a year from a monthly average of RM2,545 in 2009 to RM3,080 in 2012.

Despite this, he added that Malaysia still improved on wealth distribution, having secured a lower score of 0.431 on its “Gini coefficient” (a system to measure inequality in wealth distribution) in 2012, compared to 0.441 in 2009.

source: http://thestar.com.my/news/story.asp?file=/2013/3/28/nation/12897373&sec=nation

 

OK, so you are feeling happy and blissful already? Great! Now, let’s come down to earth a bit by reading how poverty line is calculated and what’s the current figures are:

Sesebuah isi rumah adalah dianggap sebagai miskin tegar sekiranya pendapatan bulanan isi rumah tersebut adalah kurang daripada Paras Garis Kemiskinan (PGK) makanan, iaitu pendapatan yang mencukupi bagi membolehkan isi rumah tersebut memenuhi keperluan asas dari segi nutrisi makanan yang minimum yang membolehkan setiap ahlinya mempunyai tubuh badan yang sihat.

PLI miskin tegar adalah diukur berdasarkan kepada komposisi demografi ahli isi rumah iaitu bilangan isi rumah, umur dan jantina bagi menentukan keperluan diet atau kalori (Keperluan Harian Diperlukan atau Recommended Daily Allowance (RDA) 2004, Kementerian Kesihatan dan Universiti Kebangsaan Malaysia). PLI juga mengambil kira harga jualan semasa bagi membeli keperluan harian tersebut berdasarkan lokasi mengikut Negeri dan Strata (Bandar atau Luar Bandar). PLI akan dikira berdasarkan kepada keperluan setiap isi rumah dan Indeks Harga Pengguna atau Consumer Price Index (CPI) makanan.

Keperluan Kalori bagi setiap isi rumah dikira berdasarkan kepada struktur demografi setiap isi rumah seperti umur, berat, jantina dan kadar metabolasi badan atau basal metabolic rate (BMR) mengikut paras aktiviti fizikal atau physical activity level (PAL) setiap isi rumah.

Sejumlah 8,725 kalori setiap hari adalah diperlukan (untuk 5 Orang setiap isi rumah) berdasarkan kepada 7 kategori makanan yang meliputi 13 jenis makanan iaitu :

  • nasi;
  • tepung gandum;
  • biskut;
  • ayam;
  • telur;
  • ikan;
  • susu;
  • minyak masak;
  • majerin;
  • gula;
  • buah-buahan;
  • sayur-sayuran; dan
  • kacang.

(Berdasarkan kepada Komposisi Nutrisi Makanan Malaysia, IMR 1997)

Sehubungan itu, merujuk kepada Unit Perancang Ekonomi, Paras Garis Kemiskinan Tahun 2009 selaras dengan Rancangan Ekonomi Kesepuluh (RMK-10),Paras Garis Kemiskinan (PGK) makanan yang telah ditetapkan untuk isi rumah miskin tegar berdasarkan kepada kiraan di atas adalah RM460.00 seisi rumah.

Definisi Miskin

Sesebuah isi rumah adalah dianggap miskin sekiranya pendapatan bulanan isi rumah tersebut adalah kurang daripada Paras Garis Kemiskinan (PGK), iaitu pendapatan yang mencukupi bagi membolehkan isi rumah tersebut memenuhi keperluan asas dari segi makanan dan bukan makanan yang membolehkan setiap ahlinya berfungsi di dalam masyarakat.

PLI bukan makanan adalah manggunakan kiraan Bank Dunia di dalam menentukan keperluan minima perkhidmatan dan bukan makanan. Keperluan ini dikira berdasarkan kepada perbelanjaan keseluruhan isi rumah dengan mengambil kira PLI makanan (isi rumah yang berada pada jurang 10% di atas dan 10% di bawah PLI makanan). Ini akan menunjukkan jumlah perbelanjaan sebenar termasuk komponen bukan makanan untuk membolehkan sesebuah isi rumah tersbut berfungsi di dalam masyarakat.

PLI akan dikira berdasarkan kepada keperluan setiap isi rumah dan Indeks Harga Pengguna atau Consumer Price Index (CPI) makanan dan bukan makanan mengikut Negeri dan Strata (Bandar dan LuarBandar).


PLI bukan makanan akan mengambil kira keperluan asas seperti berikut:

  • Pakaian;
  • Sewa, Minyak dan Elektrik;
  • Perkhidmatan asas;
  • Pengangkutan dan komunikasi; dan
  • Lain-Lain

Sehubungan itu, merujuk kepada Unit Perancang Ekonomi, Paras Garis Kemiskinan Tahun 2009 selaras dengan Rancangan Ekonomi Kesepuluh (RMK-10), Paras Garis Kemiskinan (PGK) makanan dan bukan makanan yang telah ditetapkan untuk isi rumah miskin berdasarkan kepada kiraan di atas adalah RM760.00 seisi rumah.

source: http://www.kpwkm.gov.my/nkra/definisi

 

So, poverty rate is RM760 per month per household of 5 person. Low income household is a bit unclear, with values of <1500, <2000, and even <3000 being stated.

Question is, is RM760 a valid figure to define poverty line? Maybe the mechanism stated above needs to revisited immediately so that our statistics are not made to be laughing stock.

If our poverty line is increased to RM2000, poverty rate can be as high as 33%! Interesting right?

Our average household income had increased and our inflation rate still steady at below 2% and its expected to continue at that range for 2013, says our Deputy Finance Minister. Check out CPI trend at http://www.tradingeconomics.com/malaysia/inflation-cpi . Questions do arise, is an average income of RM5,000 per household (5 people) per month sufficient especially in urban areas?

You may want to read the following articles as well:

http://charleshector.blogspot.com/2012/09/poverty-line-income-in-2012-number-of.html

 

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