Poverty can be defined in absolute or relative terms. Absolute poverty refers to individuals not having the sufficient resources to meet basic needs to survive, whereas relative poverty defines poverty in relation to the economic status of other members of society. During my World Challenge expedition to Malaysia, I could witness first-hand the impact of poverty on individuals that were living under $1.90 a day (the World Bank set the new global poverty line at $1.90 using 2011 prices). At the poverty headcount ratio at national poverty lines in Malaysia, poverty rates had fallen to 0.6 per cent of the population in 2014 compared to 50 per cent, in 1970. However, there are still areas of poverty that exist throughout Malaysia that deny families the basic needs, such as accessible clean water, shelter and adequate sanitation.
How did poverty rates decline from 1970 onwards?
Malaysian economic policy, pre-1970, was pre-dominantly aimed at increasing economic growth, as a result, the economy grew on an average of 6 per cent per year. However, given the socio-economic imbalances and high levels of poverty, that was staggering, up to 50% of the entire population, a New Malaysian Plan was announced and implemented by Prime Minister, Tun Abdul Razak.
The New Malaysian Plan was aimed to increase social well-being and national unity throughout Malaysia. This involved the reduction of absolute poverty. This Government initiative created employment opportunities for all Malaysians as well as expanded the labour force to pursue existing economic growth. In particular, one of the measures brought about was the accelerated programme for education and training for the Bumiputeras (Malays and indigenous peoples of Southeast Asia).
As a result, Malaysian economic policy, post 1970, has had a dramatic and extremely positive effects in reducing poverty and discrimination levels in Malaysia. For example, in 2008, Bumiputeras had gained a larger share in higher skilled jobs in the Malaysian labour force; 60% accounted for architects, 53% doctors and 52% as engineers.
Education system in Malaysia
The education system in Malaysia offers primary, secondary and tertiary education through provision of public schooling funded by the Government and through various private educational initiatives. However, there remains a significant gap compared to the more affluent countries, ranking Malaysia as 98th out of 181 countries in the UN and placing it 55th out of 74 countries, according to a report from PISA.
As eluded to in Anas Alam Faizl’s “Rich Malaysia, Poor Malaysians”, due to the heavy weighting on examinations, teaching is structured to supporting students with higher academic achievements. Thus, as a result less affluent students are de-prioritised in the education system which can lead to a cyclical poverty trap. Consequently, the gap in the quality of education influences lower average marks on international tests.
From my own observations and experiences at a rural school in Bentong, Malaysia, children of ages 7-21 were given the most basic form of education, where their daily routine consisted more of manual labour tasks rather than higher desired skills. It is worth noting that students at this school were Orang Asli children or orphans brought from jungles and rural areas and were in fact still receiving a better education that expected. Referring to Faizl’s book, “Rich Malaysia, Poor Malaysians”, analysis has shown that boosting quality of education in these less fortunate groups can help to boost the national education levels up to 40 per cent and more importantly, help to shift employment from the primary sector into the tertiary services sector.
Role of higher education
Although primary and secondary education is attended by most of the population, the majority do not progress to higher education as it’s not government funded. There are clear positive benefits that arise from continuing to study post school and gain highly desired skills and qualifications as evidenced by the differences in salaries of individuals who were tertiary educated and had a mean monthly salary of RM 4042, compared to those acquiring secondary education and earned around RM1845, while individuals with primary education earned about RM1327.
Thus, there is a clear correlation of income share with the standard of education received. Individuals, who have invested more time and money in education are more desirable by employers in the tertiary (services) sector compared with those with the bare minimum qualifications, who end up working in the primary sector (manual labour/farming). As a result, by providing a higher education to individuals stuck in the poverty trap, there is likely to be an increase in employability which may improve their living standards and thus reduce poverty levels further.
Education not only provides the skills and experiences that are required in competitive labour market, but also prepares individuals for decision making and social behaviours. The need for education not only helps to reduce poverty by improving living standards and incomes but also helps to reduce social issues such as crime and corruption. Malaysia, with a crime index of 63.37 is ranked 15th out of 118 countries in the 2016 crime index, particularly known for petty theft. However, education at an early age can develop cognitive and behavioural traits which can influence more positive decision making. Evidence has suggested that early education and development of mental health can prevent crime related activities in the future and thus as a result individuals can make decisions that will enhance not only personal benefits but may help alleviate poverty in the longer term.
Although it’s evident that tertiary education benefits, this is an option that is currently not popular given the high cost of tuition fees. Malaysia is ranked the third most unequal nation in Asia, with a Gini coefficient of 0.4621, hence it is not surprising that we see the higher income households experiencing income growth because of this education being more accessible to them. To reduce this income disparity and poverty in Malaysia, an education system needs to be all inclusive and not deprive the poorer strata in the society, of the opportunity of studying at university. It’s being suggested that to allow for inter-generational mobility, a state funded higher education system should be put in place so that no matter what the financial state an individual is born in, there will be opportunities to succeed in life and catalyse a positive multiplier effect in Malaysia.
The future for Malaysia
The Eleventh Malaysian Plan (2016-2020) addresses the issue for enhancing and improving the education system to raise the income and wealth ownership of B40 households (bottom 40% household income group).
This is demonstrated as appropriate facilities and financial aid will be provided to students in rural areas, (such as the school in Bentong, Malaysia, where our World Challenge team carried out our project), to allow the completion of primary and secondary education. Furthermore, student enrolment is aimed to be expanded, in remote areas for Orang Asli (indigenous people) and the less fortunate, to increase national education levels.
In addition, higher education will become more accessible for B40 households through special programmes and skills training to provide more places for dis-advantaged children, along with preferential entry qualification. Moreover, financial aid programmes and support will become available for students in less affluent communities which will also be a key factor in improving inter-generational mobility.
In conclusion, it is evident that the issues with poverty and socio-economic problems are being actively addressed by the Malaysian government. Economic development in developing countries such as Malaysia, is vital for improving the daily lives of individuals that are stuck in the poverty trap. As a trade-off, however, because of the government increasing the number of people attending education systems, the quality has significantly fallen behind with graduates making up 35.3% of those unemployed in Malaysia in 2016. Hence, although education may be important in alleviating poverty levels, there are other factors such as communication skills as well as attitude that are imperative areas that need to be factored in.
Written by Parth Mannikar
Contributor and CoPE (L3) qualification research