Poverty Summary: Overview of Malaysia in the Regional and Global Context

In 1991, Malaysia established a national goal of becoming a fully developed nation by 2020 economically, politically, socially, spiritually, psychologically and culturally (6 MP, 1991-1995). The roadmap to achieve this ambition is embodied in different policy instruments, and in the recently launched 11th Malaysian plan (11MP, 2016-2020), with the theme of “growth anchored in people” for a socially inclusive society. The Malaysian Government has achieved significant success in fighting poverty and in achieving remarkable economic growth in line with their policy target. Although Malaysia was affected by the Asian financial crisis of 1997-1998 as well as the Global financial crisis in 2009, it continued to post solid growth rates, averaging 5.5 percent per year from 2000-2008, recovering rapidly, with growth rates averaging 5.7 percent since 2010. In 2010, Malaysia launched the New Economic Model (NEM), which aims for the country to achieve high income status by 2020 while ensuring that growth is also sustainable and inclusive. The NEM includes a number of reforms to achieve economic growth that is primarily driven by the private sector and to move the Malaysian economy into higher value-added activities in both industry and services.

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Incidence of Poverty in Malaysia and MDGs

The Millennium Development Goals Report (MDGR, 2015) indicates that Malaysia has achieved most of the goals and objectives. Absolute poverty has been largely eradicated. The benefits of development have been felt at the national, regional, state levels, and in many cases, the community and individual levels. Remarkable progress in the country is observed in many areas, as revealed by the Millennium Development Goals Report for Malaysia in 2015. The reduction of absolute poverty (based on the national poverty line, which is twice higher than the MDG convention of USD1.25 per capita) from 16.5 percent in 1990 to 0.6 percent in 2014 is commendable.

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Inequality Summary: Malaysia in the Regional and Global Context

According to a study on inequality and income distribution in 141 countries between 1990-2008 by Ortiz and Cummins (2011, p.7), middle income countries appear the most unequal. They noted that the top quintile controls more than 80 percent of global income contrasted by a paltry percentage point for those at the bottom (p.19). Additionally, the Gini index trends showed that Eastern Europe/ former Soviet Union and Asia had the largest increases between 1990 and 2008. Latin America remains the region with the highest level of income inequality, although the region is marked by significant improvement since 2000. Nonetheless, the Gini measure for a few countries in Asia such as Thailand, Malaysia, Philippines and Mongolia noted a decline in inequality (ibid, p.27).

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