Saturday, April 4, 2009

Poverty Eradication and the Homeless

These are clips about people sleeping on the streets. This is part one of the video and we shall continue to investigate further to see how these people are doing after a few weeks. (source: Obnoxious 5xMom’s blog.)
When politicians and the press chase the homeless…(Anil Netto)

It is totally weird, bewildering and disturbing that certain politicians and members of the press see it as their patriotic duty to chase homeless people on the streets of George Town…

Is it any wonder why these street people fear these rough “rescue operations” so much? Do those who are “rounding up” these people know where these street people are being sent to and what conditions are like there? The Social Welfare Department should ask itself why these people are so afraid of being “rescued”. Has anyone stopped and thought about the root causes of such homelessness and what kind of social safety nets we have?

The press were there to cover the operations but that did not stop one press member from going on his motorbike in hot pursuit of a homeless person, already being pursued by the political secretary to the CM no less.  Reminds me of journalists “embedded” with US troops in Iraq and how they like to don army flak jackets and pretend they are part of the war too, while reporting from the US military’s perspective.

Oh, what gallant “heroes” we have in our midst! Someone should award them medals for bravery, courage and patriotism beyond the call of duty…

Perhaps these political and press “heroes” should visit the Lighthouse centre along Penang Road and speak to the volunteers there to find out how to approach street people without violating their dignity as human beings. And then actually talk to the street people. Then our “heroes” might begin to see a different picture and realise that these street people could very well have been their fathers, mothers, sisters or brothers. The Star reporters for their part might want to actually talk to these street people and find out why they are on the streets in the first place.

Check out this excerpt from a report in The Star:

THE frantic appeal of a vagrant rang in the air as he was approached by Social Welfare Department officers in George Town.

Sabarlah…sabarlah, jangan tangkap aku, aku nak berniagalah!” (be patient…be patient, don’t catch me, I want to trade).

The vagrant known only as Hamzah was picked up during one of the biggest raids against vagrants and beggars on Penang island this year on Sunday night.

When told by Komtar assemblyman Ng Wei Aik that he would be sent home, he replied: “Rumah? Saya tak ada rumah, sudah lama aku tak balik rumah. (Home? I don’t have a home, it’s been a while since I last returned home).

Turning a blind eye on the homeless living on the streets of Penang, Lim Guan Eng celebrated his successes on hardcore poverty eradication after one year in power.

Zero Hardcore Poverty Press Conference at Dewan Sri Pinang, Penang.
Citizen journalists Lilian Chan and Jimmy Leow giving the state government a pretty tough time answering their questions. 

Guan Eng: Penang has eradicated hardcore poverty
Himanshu Bhatt

GEORGE TOWN (March 30, 2009) : Penang has become the first state in the country to eradicate hardcore poverty by arranging financial aid and economic activities for all 726 households registered under the hardcore poor category.

Chief Minister Lim Guan Eng said the initiative was successful partly because of the support of the private sector and social groups who chipped in to aggressively alleviate the hardships of the poor.

"Even though it is difficult, including facing bankruptcy, I am more willing to have the state becoming bankrupt to help the poor and be burdened than to be bankrupted by corruption," he said today.

The implementation mechanism, overseen by the Welfare Department, consists mainly of funding affected families to ensure their incomes are topped up such that they get at least RM500 every month.

The department even helped some individuals set up bank accounts to receive the funds.

Lim said checking the state's poverty rate was one of the first things that he had given priority to after Pakatan Rakyat took control of the government in March last year.

The state then took a whole year to conduct an exhaustive survey, with the help of socio-economic specialists from Universiti Sains Malaysia, to determine the exact number of hardcore poor. 

Of the total number, 150 were on the island's south-west and 41 in the north-east, while 48 were in Seberang Perai Selatan, 186 in Seberang Perai Tengah, 303 in Seberang Perai Utara.

The figures are updated every three months, Lim said, adding that the state was planning to now eradicate general poverty as well, which is classified as income below RM700 a month.

Lim also said a total of RM2.2 million had been collected from the private sector, including philanthropists and charitable businesses, under an initiative called "Partners Against Poverty".

Lim said this in a ceremony to announce the successful eradication of hardcore poverty in Dewan Sri Pinang here.

He also questioned what happened to a reported RM1.1 million allocation under the Rural and Regional Development Ministry to help 22 hardcore poor in Penang.

Penang Health, Welfare, Caring Society and Environment Committee chairman Phee Boon Poh rebuked Women, Family and Community Development Minister Datuk Dr Ng Yen Yen for rejecting the state’s plea for funding to build a housing complex for about 300 homeless people.

Ng reportedly said the state should fund the complex by itself since the project was its own initiative.

"I was shocked to hear her response," said Phee, adding that the 12 acre land in Seberang Perai Selatan was transferred to the federal government by the state.

"If you give us the funds, we can build houses for 300 families and a place where they can be trained and equipped with working skills," he said.

Phee said if Ng did not have full details about the land and project, the state was willing to furnish her with the information and take her on a tour of the site.

Nevertheless I would like to give Guan Eng a round of applause for defining hardcore poverty as household with earnings of less than RM400 per month which effectively set the Poverty Line Income (PLI)  to RM800  higher than the RM753 set by EPU.  Poverty Line Income (PLI), is a measurement of absolute poverty. PLI is based on the gross monthly household income required to meet basic needs, including food and nonfood items. A household with the gross income below PLI is defined as absolute poor and a household with the gross income less than half of PLI is defined as hardcore poor.  

The definition of poverty and the Poverty Line Income is always a big dispute which critics claim is  an unrealistic income  measure  for the poor.  Let see what the father said about poverty in Malaysia!


Speech (7) on the Ninth Malaysia Plan
by Lim Kit Siang  

, Monday) :The Plan rightly places great emphasis on the issue of poverty. Chapter 16 in one sense is the center piece. I would like to begin by taking strong issue with the concepts and methodology employed to derive the various Poverty Line Income (PLI) measures and the estimates of poverty incidence. These are fundamentally  flawed, gravely  affect the analysis and conclusions which leads to the advocacy of wrong policies.

The Plan uses the concept of HARDCORE poverty defined as “…. Income less than the food PLI which is based on nutritionally based diet.” (Box 16-2)  The very termHardcore is not in international use. The World Bank and UNDP, two global agencies in the forefront in analyzing poverty, use the concepts of Absolute and Relativepoverty. I find no valid reasons why Malaysia deviates from standard international terminology. 

A deeper and more troubling issue concerns the calculation methods used. Box 16.2 indicates that the new PLI is made up of two components - the Food and Non-Food components. The Plan goes on to state that the Food component has been calculated on the basis of the   advice of nutritionists , dieticians and medical professionals. The point to note is that ACTUAL consumption patterns as measured by the Household surveys were ignored and substituted with notional figures on desirable calorie values. This then is the measure used in defining the poverty line to estimate the hardcore poor. The impact of this approach grossly affects the PLI and ultimately understates the estimated number of the hardcore poor. This is a very deep flaw. This approach is neither recommended nor used in deriving PLIs. 

The second fundamental flaw concerns the unit of analysis to obtain the poverty head count. The recommended and globally accepted unit used in poverty analysis is the INDIVIDUAL. However, the Plan uses the HOUSEHOLD as the unit thus deviating from internationally accepted norms. It is important to take note that households vary in size across the urban-rural and the ethnic dimension. Not taking account of these differences is unprofessional and inexcusable and raises serious questions about the objectivity and integrity of the resulting estimates. The Plan provides no rationale or justification as to why the HOUSEHOLD was chosen over the INDIVIDUAL as the unit of analysis. It is also an indefensible position as the requisite data to analyze was available from the Household Income Expenditure Surveys. It is also important to note that based on earlier similar Surveys the World Bank was able to come up with poverty estimates based on individuals. Those who have an interest are referred to a World Bank Research Paper entitled INEQUALITY & DETERMINANTS OF EARNINGS IN MALAYSIA

The internationally accepted and applied poverty measurement concepts developed by the World Bank are clear and precise.

·        Rural poverty rate is defined as the percentage of the rural population living below the national rural poverty line.

·        Urban poverty rate is the percentage of the urban population living below the national urban poverty line.

·        National poverty rate is the percentage of the population living below the national poverty line. National estimates are based on population-weighted subgroup estimates from household surveys.

·        Population below US$1 a day and population below US$2 a day are the percentages of the population living on less than $1.08 a day and $2.15 a day at 1993 international prices. 

I can only conclude that these methodologies were rejected by the EPU in favor of its own definitions and methods with the sole aim  of producing the  feel good effects from  low estimates of the poor. This is an insult to the poor in that we are unable to generate true and accurate estimates. I cannot over-emphasis the importance of getting the numbers right as these underpin the needed  policy responses and ultimately the allocation of resources to eradicate  the scourge of poverty from Malaysian society. 

According to Table 16-1 we are told that 8.5 and 5.7 percent of all households were poor in 1999 and 2004. These are translated to 409,300 and 311,350 households in overall poverty in the two benchmark years. We not told what this means in terms of the NUMBERS of Malaysians who are poor. Assuming an average household size of 5 persons, it can be estimated that there are approximately 1.6 million Malaysians who fit the Government's own concept. The number in poverty would certainly be much larger had the analysis been done on the basis of a poverty line based on actual consumption pattern of the poor. 

Irrespective of the method used, it is clear that significant number of Malaysians continue to live in poverty despite rapid economic growth and sizable allocations for poverty eradication under previous five-year Plans. That absolute poverty remains despite these factors points to policy failures, incompetent implementation and failure of the political will to make adjustments. 

The Plan acknowledges the fact that income distribution has worsened with the bottom 40 percent of households receiving 13.5 percent of total income - deteriorating from 14.0% in 2000, whilst the top 20 percent saw an INCREASE in their share from 50.5 percent to 51.2 percent in the same period. Thus, the rich grew richer while the poor became poorer. The overall Gini ratio increased from 0.452 to .0462.  All ethnic groups recorded an increase in the Gini coefficient during the period. The inequality among Bumiputeras was the highest compared with the Chinese and Indians. (Para 16.18)

The 2004 UNDP  Human Development Report reveals that Malaysia has the worst income distribution pattern in this region, with the richest 10 per cent controlling 38.4 per cent of the total income while the poorest 10 per cent has only 1.7 per cent. These data  are sobering and cry out for an explanation.

The Plan largely glosses over the issue and fails to acknowledge that a considerable part of the explanation lies in the disastrous distributional policies that were pursued exemplified by handouts to the corporate sector, cronyism policies, labor/wage policies and a fiscal regime that penalizes consumers and wage earners. 

Beyond the rhetoric, it is clear that fundamental policies will continue. It is no consolation to the poor that “…. the distributional agenda will be pursued more fairly through capacity building and raising competitiveness. No new specific poverty policies are spelt out.

What is proposed is a continuation of failed approaches and programmes.The development allocation for the poverty alleviation prong  under the 9th Plan is RM4.5 billion as compared to RM7 billion for the restructuring of society prong – which are most telling as to which development goal has the higher priority. 

The Plan speaks of reducing income disparities between Bumiputras and the Chinese to a ratio of 1 to 1.150 and that to Indians to 1 to 1.115. The Plan states that key instruments are:

·         Besides poverty eradication, the focus of distributional strategies and programs will on the creation of a bigger and more prosperous Bumiputra middle class through human capital development

·         Through employment restructuring in the private sector, enhanced ownership of corporate asset holdings as well as commercial, residential and intellectual propertye n also states: (Para 16.54)  During the Plan period, more intensified efforts will be made to ensure that the employment pattern at all levels of occupations and in all sectors of the economy reflects the ethnic composition of the population. It goes on to state that the private sector will be asked to play a greater role in accelerating the advancement of Bumiputra employment and restructuring their employment pattern. It would not be inappropriate to conclude that the regulatory mechanisms now in place would be tightened with perhaps even harsher rules developed and applied. ose reading of the Plan indicates no specific policies or measures taddress the overall income disparities between the bottom. 

While it cannot be denied that inter-ethnic distributions must receive the closest attention, there is need to address the overall distribution pattern. Unless these are addressed, there is a clear danger of social alienation, sense of deprivation, and social tensions reflected in a further rising of crime rates and other anti-social behavior. It is incumbent on the Government to address this issue. It cannot and must not be swept under the carpet.


Poverty eradication require a multi-dimensional approach which goes beyond economic deprivation and is defined among others in terms of powerlessness, lack of education, social exclusion, gender inequality, job availability, poor infrastructure and transportation, affordable food, health care and lack of land or housing rights. Poverty eradication should not be reduced to mere rhetoric and charity. Lim Guan Eng should look into  Creating Wealth from Waste  as a transformative strategy to exploit a way to empower the poor.

A short conversation about hope and life (Source:  Obnoxious 5xMom’s blog.)

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