Poverty in Malaysia and Thailand

Introduction

According to Oxford Dictionary, poverty is define as the state of being extremely poor. Poverty line is define as the estimated minimum level of income needed to secure the necessities of life. For example, nutritional, clothing, and shelter needs cannot be fulfilled. Poverty is easy to spot but hard to define. Diagram 1 shows that the national poverty line for some countries per person per day in the world in early year of 2011. Malaysia measure the poverty line at $1.36 per person per day which is $0.35 lesser than Thailand. [pic 1]

Diagram 1: The Poverty Line for per person per day in US Dollar in early year 2011

(Sources from: http://www.thepovertyline.net/map)

Definition and Categories of Poverty in Malaysia and Thailand

• Malaysia

According to Idris Jala, a Minister in Prime Minister Department said “A survey conducted last year (2014) by the Department of Statistics Malaysia (DOSM) on a sample size of 81,634 households shares the preliminary data that only one percent of households were living under the Poverty Line Index (PLI).” Based on the statement above, Malaysia calculate poverty by using PLI. Apart from that, Minister also stated poverty are define and categories into two, which is Extreme Poverty and Poor.

1. Extreme Poverty – Households that fail to fulfil basic survival needs. For example, food, clothing and shelter. Household that fall into this category earn average monthly incomes of less than RM460 in Peninsular Malaysia, less than RM630 in Sabah and less than RM590 in Sarawak. The average income above are defined as 40% bottom of the household income.
2. Poor – Households that fall short of certain standards of consumption which are to view as necessary to maintain ‘equilibrium’ in society. For example, these people cannot afford healthcare and education. Households are defined as poor with average monthly incomes of less than RM760 in Peninsular Malaysia, less than RM1,050 in Sabah and less than RM910 in Sarawak.

• Thailand

According to the Office of the National Economic and Social Development Board of Thailand Tenth Plan, Thailand calculate poverty by using PLI. Thailand’s PLI of THB 1.586 per person per month. Also, Poverty categories into two. Rural Poverty and Rural Poverty.

1. Rural Poverty – rural poor mostly work in agricultural sector. Most of them live in remote areas where accessibility to public services are limited. Public Services such as infrastructure, education, health, administrative services and so on. As these services are unavailable to them at close distance, they normally face higher cost in transportation in order to receive the services.
2. Urban Poverty – Urban poor person are mostly low-skilled workers in labour-intensive non industrial and services sectors such as construction, manufacturing and so on. Not only but also their living environment/conditions. Many of them live in the environment lack of proper infrastructure and waste system.

New global poverty line in 2015 had been updated from $1.25 to $1.90 per person per day using 2011 price. However, it is unfair to all the countries for using the same poverty line as different country have different population, living cost, purchasing power and so on. How do we compare the poverty line between countries whilst there are so many differences between? Purchasing Power Parity (PPP) is used and allow us to put each country’s income and consumption data. Anyhow, this is just monetary indicators, non-monetary indicators like education, health, sanitation, and utilities is not counted in. By using the national poverty line, the percentage of population suffering from poverty in malaysia is 0.6% while in thailand is 10.9% in year 2014.

[pic 2]

Diagram 1: Share of Population below the National Poverty Line

(Source: https://www.adb.org/countries/thailand/poverty)

Richer countries have higher poverty line, while poorer countries have lower poverty lines. The World Bank classifies economies of countries as low income, middle income (subdivided into lower, middle, and upper middle), or high income. The main criterion for classifying economies is the gross national income (GNI) per capita. Other analytical groups, based on geographic regions and levels of external debt, are also used. GNI per capita and the purchasing power of a citizen, is often used as a measure of people's welfare. But the classification by income does not necessarily reflect the development status of a country. Have in mind, that some countries with a biased income distribution may have a relatively high per-capita GNI while the majority of its citizens have a relatively low level of income, due to concentration of wealth in the hands of a small fraction of the population. Diagram 2 shows the comparison of part of the countries by GNI per capita and Purchasing Power Parity (PPP) in international Dollars for year 2007 and year 2015. In year 2015, Malaysia was ranked at 48 while Thailand was at the ranking of 75.

[pic 3]

Diagram 2: Countries by GNI per capita and PPP in international Dollars - 2015 (2007)

(Source: latest available figures (2015) from World Bank Group, some figures are from the CIA World Factbook marked with an asterisk (*)

ADDITIONAL

Apart from that, there are some countries claimed they have zero poverty. Eradication of poverty in the country is successful. For example, Singapore had claimed that they have zero poverty in the country. According to DollarsandSense (2015), Singapore government chooses not to define poverty. It does not mean it does not exist in Singapore. We can see there is no data for Singapore poverty in diagram 1. It is understandable by taking a look the extent of the problem in Singapore and look at how poverty is typically defined.

In order to help the powerless citizen, Non-Government Organisation (NGO) in Singapore is using Poverty Line Income (PLI) themselves to help the poor in the countries.  In 2011, Jacqueline Loh, Centre Director at the Lien Centre for Social Innovation, had said that, “While Singapore has no official poverty line … it has been estimated that a family of four would need S$1,700 to cover basic costs of living, but S$2,500-3,000/month to meet a ”social inclusion” level of income.” Thus, family of four would earn less or around S$1,700 are consider poor in Singapore by following PLI.