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Akademika 81(1) 2011: 73-81

Poverty Measurement in Malaysia: A Survey of the Literature

Pengukuran Kemiskinan di Malaysia: Tinjauan Literatur

MOHAME SALA!" A#$L % ASOOL& MOH 'A$(! MOH HA%$"&A%!''!" MOH SALLEH ) "O%A!"! !%!S

A#ST%AK

Usaha menghapus masalah perluasan kemiskinan dan peningkatan ketidakseimbangan pendapatan menjadi fkusutama penggubal dasar pembangunan! dianggap sebagai bjektif utama dasar pembangunan "ang perlu diberi

perhatian# $emiskinan dan ketidakseimbangan perlu diukur dengan tepat bagi memblehkan pihak kerajaan

memantau kemajuan prgram "ang telah dilaksanakan! prjek-prjek "ang masih dalam pelaksanaan dan memastikan

kerajaan dapat me%ujudkan insentif "ang lebih rele&an dengan keperluan matlamat# $emiskinan memba%a makna

"ang berbe'a bagi glngan "ang berbe'a keadaan tempatan dengan mengambil kira pelbagai faktr buda"a dan

ssial# $emiskinan mutlak ditakrif sebagai ketidakmampuan seserang menggunakan sumber-sumber "ang ada bagi

memenuhi keperluan asasn"a# engan kata lain! kemiskinan bermakna ketiadaan pilihan dan peluang untuk menikmati

hidup "ang selesa sekurang-kurangn"a bagi memenuhi keperluan asas# a'imn"a! kemiskinan digambarkan melalui

jangka ha"at "ang pendek! kadar buta huruf "ang tinggi dan kekurangan sumber# *alau bagaimanapun! di +ala"sia

kemiskinan berknsep dan berperasi daripada perspektif pendapatan# +akalah ini menggariskan pengukuran

kemiskinan "ang diguna pakai leh Unit ,eranang .knmi ( U,. )! /abatan ,erdana +enteri! iaitu ,aras aris

$emiskinan ( ,$ )# i samping itu! makalah ini juga menadangkan satu kaedah pengukuran multidimensi "ang lebih

kmprehensif dengan menggunakan indeks# $aedah ini mengambil kira kedua-dua indikatr ke%angan dan bukan

ke%angan bagi mengenal pasti kumpulan sasaran "ang lebih realistik# $aedah "ang bersifat hlistik ini dijangkakan

mempun"ai impak kerana memberi alternatif kepada pihak ber%ajib untuk mengukur kemiskinan#

$ata kuni: +ultidimensi! paras kemiskinan! pengukuran

A#ST%A*T

he eliminatin f %idespread p&ert" and e&er gr%ing inme ineualit" are at the re f all de&elpment prblemsand in fat! fr man" peple dene the prinipal bjeti&e f de&elpment pli"# ,&ert" and ineualit" need t be

measured mre preisel" t pr&ide a meaningful understanding f h% muh prgress has alread" been made! h%

muh mre remains t be ahie&ed! and h% t set inenti&es fr g&ernment fials t fus n the mst pressing

needs# Abslute p&ert" is dened as the number f peple %h are unable t mmand sufient resures t satisf"

their basi needs# .nmists ha&e agreed that p&ert" des nt ha&e ne denite nept# 4%e&er! in +ala"sia p&ert"

is mmnl" neptualised frm the perspeti&e f mnetar" r inme# his artile utlines the p&ert" measurement

presentl" used b" the .nmi ,lanning Unit ( .,U )! ,rime +inister5s epartment# 6esides disussing the present

p&ert" line inme ( , ) methd! the artile prpses a multidimensinal p&ert" measurement inde# he prpsed

methd mprising f mnetar" and nn-mnetar" indiatrs is epeted t apture a mre realisti p&ert" grup#

9urthermre! the multidimensinal phenmenn f p&ert" in a mre hlisti %a" is en&isaged t be aptured and is

epeted t ha&e an impat n the pli" makers as it gi&es a ne% perspeti&e fr measuring p&ert"#

$e"%rds: +ultidimensinal! p&ert" threshld! measurements

!"T%O$*T!O"

Poverty& in the modern +orld today is e,-lained in various

+ays. E/onomists agreed that -overty do not have a

definite /on/e-t 0"arayanan ) Patel 12223 Lader/hi

12223 'ran/o 12245. Hagenaars ) e 6os 078995

des/ried that although there are numerous definitionsof -overty& almost all definitions /ould e -ut into three

main /ategories: 075 -overty means having less than+hat is oje/tively defined3 015 -overty is having less

than others in the so/iety3 045 -overty is a feeling of not

having enough to get along.

;enerally& in /onventional e/onomi/s there are

four different definitions of -overty& namely monetary

a--roa/h& /a-aility a--roa/h& so/ial e,/lusion and -overty -arti/i-atory assessment 0PPA5 0Lader/hi 12243

7

Mohd 'au<i ) Ahmad 'au<ee Adullah 122=5. The

develo-ment in the modern measurement of -overty

has

undergone three stages 0Moisio 12275 eginning +ith

the

asolute -overty a--roa/h -ioneered y %o+ntree in

the



eginning of the 18th /entury in England until the early

78=2s& +hi/h sa+ the introdu/tion of relative -overty

-ioneered y To+nshed 078=85. #oth of these in/ome

a--roa/hes +ere oviously measuring -overty as the

la/k of material resour/es. The se/ond stage egan +ith

the introdu/tion of -overty as -oor living /onditions su/h

as de-rivation. >orks y %ingen 0789?5 and #ergman

012215 su--orted +orks y Sen 078=8& 7892& 789=5

+ho introdu/ed de-rivation and /a-aility as a more

/om-lete definition of -overty using -overty inde,es.

Later& so/ial e,/lusion +as introdu/ed as an e,tension

of the /a-aility a--roa/h. Today& -overty is a//e-ted as

a multidimensional -henomenon using various methodssu/h as the -overty -arti/i-ation a--roa/h 0PPA5 method&

+hi/h in/or-orates the -ers-e/tive of -overty from the

-oor themselves.

Poverty in Malaysia is /ommonly /on/e-tualised and

o-erationalised from the monetary a--roa/h -ers-e/tive.

E/onomists have argued that the /urrent monetary

a--roa/h is not ale to refle/t the multidimensional nature

of -overty& +hi/h has develo-ed due to the ra-id e/onomi/

develo-ment -ro/ess via gloalisation and lierations

of trade and usinesses. >agle 0122?5 em-hasised

that monetary ased a--roa/hes& namely in/ome and

/onsum-tion are uni@dimensional and therefore& unaleto /a-ture multi-le dimensions of -overty. >agle 0122?5

revie+ed +orks y other resear/hers su/h as Sen 0789=&

7881& 78885 and Silver 07885 +ho -ointed out that

/a-aility and so/ial e,/lusion as more a--ro-riate

methods of defining -overty. Sen used the /on/e-t of

la/k of /a-aility to fun/tion or a/hieve +elleing& +hile

Silver fo/used on so/ial -ro/esses that inhiit individual

from a/Buiring resour/es.

The definition of -overty is vital as it determines

the +ay -overty is measured. Thus& it is im-erative to

/on/e-tualise -overty in a more realisti/ +ay in Malaysia

/om-ared to the -resent in/ome a--roa/h +idely used in

-oli/y and de/ision@making. "olan and >helan 012285

stressed that non@monetary indi/ators together +ith

finan/ial or in/ome data +ould e ale to im-rove the

measurement and understanding of -overty. ue to its

multidimensional nature -overty is today /onsidered as

a /om-le, set of de-rivations. Therefore& the in/lusion

of more /om-rehensive indi/ators +ould enale a

more holisti/ -overty measurement in/or-orating

various monetary and non@monetary /om-onents. The

oje/tives of this -a-er are to outline the -resent -overty

measurement method using the in/ome a--roa/h in

Malaysia and then -ro-ose a multidimensional -overty

measurement using inde,.This arti/le is organised as follo+s. The arti/le +ill

start +ith outlining the different a--roa/hes of -overty.

!t is follo+ed y a dis/ussion on -overty measurement

Akademika 81(1)

in Malaysia. Se/tion four -ro-oses a multidimensional -overty measurement using inde, in Malaysia. The

arti/le /on/ludes +ith an em-hasis on the im-ortan/e

of em-loying a multidimensional -overty measurement

in Malaysia.

PO6E%TC MEAS$%EME"T APP%OA*HES

Poverty is a situation e,em-lified y insuffi/ient materialresour/es. 'or many years this situation is e,-lained

through the -ers-e/tive of material short/omings&

es-e/ially from the in/ome -ers-e/tive. Ho+ever&

-overty is no longer oje/tively defined& ut e,ists in

a multidimensional nature 0"arayanan ) Patel 12223

Lader/hi 12223 'ran/o 12245. A//ording to Mohd 'au<i

0122=5 -overty is not solely looked from the -ers-e/tive

of material resour/es& ut de-ends on ho+ it is -er/eived

and ho+ it is measured& meaning that it de-ends on

+ho defines it. He further e,-lains that the definition of

-overty de-ends on the method of measurement used.

Em-loyment of /orre/t measurement is essential in

identifying /ertain target grou-& +hi/h +ould enale the

resear/hers to suggest a--ro-riate -oli/ies in addressing

the issue of -overty. Ea/h definition +ould des/rie the

-oor differently and +ould result in different estimation

and e,tent of -overty 0#enner 12275. Similarly& Lader/hi

012245 stressed that /hoosing different definitions are

as vital as they use different measurements in terms of

variales. Thus& different definitions identify different

dimensions of -overty and /onseBuently identify different

individuals or households as -oor grou-s. !n her studyundertaken in Peru and !ndia& Lader/hi 012245 found

that the usage of the different measurements has resulted

in different households or individuals eing defined

as im-overished. The overla--ing of -oor individuals

a//ording to different definitions are signifi/antly

small. !n other +ords& more than half of im-overished

individuals or households in one definition +ould differ

from the other grou-s and vi/e versa. The various

a--roa/hes are e,-lained elo+.

MO"ETA%C APP%OA*H

The most /ommon a--roa/h used y e/onomists toe,-lain -overty is the monetary a--roa/h 0Lader/hi

1222& Asselin ) au-hin 12275. S-e/ifi/ally& -overty

means that a -erson is unale to otain a /ertain level of

in/ome to attain e/onomi/ +elleing or in an aggregate

term e,-lained as la/king of e/onomi/ +elfare 0%avallion

78895. This a--roa/h is ased on the utility theory& +hi/h

e,-lains that an individual +ould attain satisfa/tion from

/onsum-tion of goods and servi/es 0Asselin ) au-hin

12275. !ndividually& the /on/e-t of +elleing is +idely

used to e,-lain the level of satisfa/tion +hile in the

aggregate /onte,t& the /on/e-t of e/onomi/ +elfare is

used to e,-lain the +elleing of the so/iety.

P&ert" +easurement in +ala"sia: A ;ur&e" f the iterature

There are various ty-es of -overty derived from the

monetary a--roa/h su/h as asolute -overty& relative

-overty& the -overty rate and -overty ga-. Ho+ever&

the most fundamental and most /ommonly used is the

asolute and relative -overty /on/e-ts. Asolute

-overty

is asso/iated +ith a /ertain in/ome level reBuired to

sustain a minimum standard of living. On the other



hand&

relative -overty defines a -erson as -oor +hen his or her

in/ome is lo+er than others or the national average.

The /on/e-t of asolute -overty +as introdu/ed

y *harles #ooth in 799=& in his study in East London

0Lader/hi 12225. $sing the family in/ome of the S/hool

6isiting #oard& he /ategorised the -o-ulation into eight

so/ial /lasses. 'amily otaining less than eighteen

-ennies -er +eek and +ith si, /hildren +ere defined as

-oor and e,em-ted from -aying s/hool fees. #esides

in/ome& jo ty-es and living /onditions +ere used to

define -overty. !ndividuals +ithout jos and +ith lo+

moral haits su/h as al/ohol addi/tion and gamling+ere /onsidered -oor.

#esides #ooth& %o+ntree in his study in Cork&

London in 7998 e,-lained that -overty is insuffi/ient

in/ome to sustain -hysi/al effi/ien/y 0Saunders 1225.

%o+ntree e,tended #oothDs +orks y in/luding food

and other items su/h as /lothing and rent as asi/

needs. The amount of in/ome needed to fulfil these

asi/ needs is kno+n as -overty line in/ome 0PL!5. He

defines that -overty o//ur if the in/ome otained is

elo+ the PL!. Poverty that is defined using the PL! iskno+n as asolute -overty and this definition& ased on

the +ork of %o+ntree& is +idely used a/ross the gloe0Lader/hi 12225.

The +orks of #ooth and %o+ntree are the asi/

foundations used to estimate -overty y using

in/ome. Ho+ever& e/onomists have found that in/ome

is insuffi/ient to e,-lain -overty due to -rolems

of analysis& determining the a--ro-riate PL! and

a--ro-riate inter-retation of suffi/ient levelD to live.

Among the short/omings of this a--roa/h are in terms

of determining the a--ro-riate PL! as the needs of

individuals differ& the households as unit of analysis

is insuffi/ient to e,-lain the +elleing of individuals&

es-e/ially from the as-e/t of gender and the la/k of

in/ome in e,-laining the real in/ome of individuals or

households.

%elative -overty is asso/iated +ith the issue of

ineBuality of in/ome among the -o-ulation. !t measures

the imalan/e of in/ome of the various in/ome grou-s

in a so/iety. A -arti/ular in/ome line se-arates ea/h

in/ome grou-. A -arti/ular in/ome grou- is defined as

-oor +hen its in/ome is lo+er /om-ared to others even if

it is higher than the PL!. %elative -overty is +idely used

in develo-ed nation +here asolute -overty rarely e,ists.

!t is measured y determining the in/ome that /uts the

lo+est -D -er/entage in the national in/ome distriution

0Anand 78945. !n develo-ing /ountries& the lo+est forty -er/ent of the in/ome grou- is determined to re-resent

7<

the -D -er/entage. Another method /ommonly used todetermine relative -overty is through estimating the

in/ome of the -oor grou- +ith the average national

in/ome. 'or e,am-le& the PL! for the -oor in Euro-ean

$nion 0E$5 is si,ty -er/ent of the average national

in/ome 0Lader/hi 12245. An im-ortant feature in the

relative -overty /on/e-t is there +ould al+ays e a -oor grou- due to the e,isten/e of in/ome ineBuality even if

there is no household +ith an in/ome elo+ the PL!& as

e,-lained y the asolute -overty definition.

*APA#!L!TC APP%OA*H

%elating -overty to the assessment of individual+elleing and so/ial arrangements& the fo/us of

/a-aility a--roa/h is different from the traditional

method that involves in/ome as the main element of

-overty. Pioneered y Sen 0789?5& this a--roa/h in/ludes

non@in/ome items su/h life e,-e/tan/y& litera/y and

infant mortality in measuring -overty. %eje/ting the

+elfarist and utilitarian theories& Sen /on/entrates on

the Buality of life and em-hasises on the removing of

osta/les so that -eo-le /ould have more freedom to

fun/tion. He delierates asi/ /a-aility as the freedom

to do asi/ a/tivities ne/essary to avoid -overty. Sen

0788=5 e,-lains fun/tions as a/tivities and a/tions

individuals +ant to -erform in/luding +orking& resting&

eing healthy& eing literate and eing res-e/ted. Alkire

012215 /on/urs /a-aility as a freedom to fun/tion in

daily life. 'rom a different -ers-e/tive& %oeyns 0122?5

stressed that /a-aility a--roa/h em-hasised on +hat

-eo-le are effe/tively ale to do and to e.*ontrasting +ith SenDs ideas& "assaum develo-s

the /a-aility a--roa/h y fo/ussing on individualDs

skills and -ersonality traits 078813 12225. S-e/ifi/ally&

she -ro-oses a list of /a-ailities su/h as life& odily

health& odily integrity& emotions et/. Sen argues the

need for a list as the list is used for different -ur-oses and

ea/h -ur-ose /ould have its o+n list 0%oeyns 122?5.

Ayala& Furado ) Mayo 012285 studied the relationshi-

et+een in/ome -overty and multidimensional

de-rivation in S-ain. They found that the determinants

of oth -henomena vary a//ording to regions and oth

have a +eak statisti/al relationshi-. Similarly& "otten012285 /on/urs in his study that +as /arried out in

the -hysi/al environment of /hildren in the %e-uli/

of *ongo that monetary -overty and de-rivation are

not strongly /orrelated although they are -ositively

related.

SO*!AL EG*L$S!O" APP%OA*H

So/ial e,/lusion is defined as a -ro/ess +hen individualsor grou-s are e,/luded +hether fully or -artially from the

-arti/i-ation +ith the so/iety they live in. This /on/e-t

+as develo-ed y industrialisd /ountries to des/rie the

-henomena of de-rivation and marginalisation. This

7=

/on/e-t +as first develo-ed y To+nshed 078=85 in hisattem-t to e,-lain de-rivation as those +ho are e,/luded

y ordinary living -attern& /ustoms and a/tivities. !n

a study in England& #ur/hardt 078885 defined those

so/ially e,/luded as those e,/luded from normal

a/tivities su/h as /onsum-tion& savings& -rodu/tion&

-oliti/al and so/ial a/tivities. Other resear/hers su/h

as Stroel 07885& Evans 078895 and Taylor 078885

su--orted the idea of so/ial e,/lusion a--roa/h in



e,-laining -overty using the e/onomi/& -oliti/al and

/ultural dimensions.

Atkinson 078885 suggests three elements related

to so/ial e,/lusion as relativity& agen/y and dynami/s.

%elativity refers to e,/lusion as related to a -arti/ular

so/iety& agen/y as e,/lusion and as out/ome of an agent

Akademika 81(1)

PO6E%TC MEAS$%EME"T !" MALACS!A

The rate of -overty has de/reased signifi/antly inMalaysia from 18.? -er/ent in 78=8 to 4. -er/ent in

122= as sho+n in Tale 7 elo+ 0EP$ 12285. Ho+ever&

in 122 some states still sho+ed high -overty rates su/h

as Terengganu 01.1 -er/ent5& Saah 01.1 -er/ent5& andKelantan 072. -er/ent5. The data -resented y EP$ is

ased on the definition and measurement of -overty

from the -ers-e/tive of in/ome using the /on/e-t of

PL! as e,-lained aove. The PL! or /ommonly kno+n

as the -overty threshold in Malaysia is determined y

the E/onomi/ Planning $nit 0EP$5& Prime MinisterDs

e-artment.

or agents +hile dynami/s refers to the relevan/y of the

future to the /urrent -ros-e/ts. efining so/ial e,/lusion

as a -ro/ess of e,/luding individual and grou-s from

so/ial& e/onomi/ and /ultural net+orks& Poggi 0122=5

found that individuals e,/luded at a /ertain -oint in

time have a higher -roaility to fa/e the -henomenon

again.

PO6E%TC PA%T!*!PAT!O" APP%OA*H

The methods e,-lained aove look at -overty from

TA#LE

Cear

78=278=?

7892

789?

7882

7888

122

122=

7. %ate of Poverty& Malaysia

Poverty %ate

0I5

8.44.8

18.1

12.=

7=.7

9.?

?.=

4.

the -ers-e/tive of -arties involved in -oli/y making or

resear/hers& ut -overty -arti/i-ation a--roa/h takes into

a//ount the vie+s of -oor -eo-le themselves. !nstead

of vie+ing -overty from outside +hi/h is regarded

as in/om-lete& *hamers 0788=5& +ho -ioneered this

a--roa/h -ointed out that the -arti/i-ation of the -oor themselves in de/isions and -oli/ies is vital in

understanding the meaning and e,tent of -overty. The

>orld #ank ado-ted this method /overing 14 /ountries

as -revious methods +ere /riti/ised as inadeBuate +hen

used in -overty eradi/ation -oli/ies and -rograms

0"arayanan ) Patel 12225. $sing various tools and

;ure: Malaysian Plans 0various issues5

*urrently& PL! -er /a-ita in Peninsular Malaysiais %M792 and %M782 in Sara+ak and %M122 in Saah

res-e/tively 0Tale 15. Tale 4 de-i/ts the PL! -er /a-ita

for every state in Malaysia sho+ing that PL! varies

a//ording to states and areas due to different standards of

living in ea/h state and area. !n general& the PL! is higher

in the uran /om-ared to the rural settings& es-e/ially

for Selangor& Fohor and Kelantan& three states& +hi/h are

relatively large in terms of si<e.

methods suited to ea/h lo/ality& this a--roa/h identified

five ty-es of +elleing& namely material& -hysi/al&TA#LE 1. Poverty Line !n/ome 0PL!5 for Malaysia 122=

se/urity& freedom of /hoi/e and so/ial +elleing.

The result of the study entitled >ies f the ,r %egion Household

0%M5

Per /a-ita

0%M5

sur-risingly revealed that the -oor fo/used on -hysi/al&

human& so/ial and environmental issues instead of in/ome as the -henomena of -overty.

The advantage of this a--roa/h is it involves the

>est MalaysiaSaah

Sara+ak

=1282

942

792122

inter-retation and understanding of -overty from various

dimensions de-ending on the suje/t studied. On the

other hand& the disadvantage of this a--roa/h is that the

-ro/ess of data gathering is lengthy. ue to this& sam-le

si<es of -arti/i-ants are often small& making statisti/al

data analysis diffi/ult 0Lader/hi 12245. Therefore& -oli/y

makers often do not take seriously the findings or the

results re-orted em-loying this a--roa/h.

782

;ure: Mohd Shukri Mohd Fusoh 012285

The /urrent PL! takes into a//ount the minimumreBuirements of household for t+o major /om-onents&

namely food and non@food items 0Tale 5. 'ood

items are ased on %e/ommended aily Allo+an/es&

/al/ulated y the Te/hni/al ;rou- on 'ood /om-rising

of e,-erts from the Ministry of Health and resear/hers

sele/ted y EP$. The asi/ needs of households are

P&ert" +easurement in +ala"sia: A ;ur&e" f the iterature 77

TA#LE State 4. PL! yState andStratum

Povertyline

in/ome 0PL!5

Per *a-ita



"o. TA#LE .eter

m nat on o PL!

!tems

$ran %ural 7. 'OO !TEMS

7. #ased on %e/ommended aily Allo+an/es 0%A5

Fohor

Kedah

Kelantan

Melaka

7?

74

748

7?7

71

7

71

78

y Te/hni/al >orking ;rou- on 'ood.

1. "e/essity of household ased on demogra-hi/

fa/tors su/h as age& gender and #asal Metaoli/

%ate 0#M% 5.

". Semilan

Pahang

P. Pinang

Perak

PerlisSelangor

Terengganu

Saah

Sara+ak

>. Persekutuan

7

7?2

7?1

7

7477

79

7=

7=7

798

7=

7

7?2

72

7179

7=

7=2

7

2

1. "O"@'OO !TEMS

7. #ased on >orld #ankDs Living Standard

Measurement

1. #ased on lo+est 12-er/ent grou- of Household

E,-enditure Survey 122J2?

4. *onsideration of -ri/es at different states and

stratum

. *ategories of goods:

a. /lothing and footear

. rent& energy


ased on demogra-hi/ fa/tors su/h as gender and age. "on@food items are ased on the >orld #ankDs Living

Standard Measurement Study introdu/ed y %avallion

078995. !tems in/luded in the non@food item are /lothing

and foot+ear& rent and energy& utensils& trans-ortationand /ommuni/ation and finally other goods and servi/es.

These needs are ased on the e,-enditure -attern y

the lo+est 12 -er/ent households in the Household

E,-enditure Survey 122J122?. Thus& the -overty

measurement em-loyed is ased on the ne/essities needed

y the household to fulfil the asi/ needs in terms of food

and non@food reBuirement to ensure ea/h household lead

an a/tive& healthy and -roa/tive life 0Mohd Sukri Mat

Fusoh 12285.

The /urrent PL! is a revised version from the

-revious e,er/ise in 78==. !n the 78== version& the PL!

+as ased on an average household of five for food

and non@food items. The main differen/e et+een

the /urrent PL! and the one in 78== is that there is no

differen/e et+een states and area 0rural and uran5 in

the latter. !n addition& si<e& gender and age of household

are not taken into a//ount in /onstru/ting the PL!.

Another major differen/e is the definition of destitute

or hard/ore -oor. !n the /urrent PL!& destitute is defined

as households that are unale to fulfil even their food

reBuirement& +hereas in the 78== method& households

that are unale to gain in/ome of even half of PL! +as

/onsidered as destitute.

EMP!%!*AL ST$!ES O" PO6E%TCMEAS$%EME"T !" MALACS!A

6arious studies had een /ondu/ted in Malaysia mainlyusing the monetary a--roa/h. Among the earliest

studies undertaken +as y $ngku A<i< 0785 +ho

/. utensils

d. trans-ortation and /ommuni/ation

e. other goods and servi/es


introdu/ed three so/ioe/onomi/ measures of -overty

in his study on -overty and rural develo-ment& namelynutrition& mortality rates and the sarng inde. 'irstly

the relationshi- of -overty +ith lo+ level nutrition +as

highlighted. He -ointed out that the level of -overty is

negatively /orrelated +ith the level of animal -rotein

as -rotein intake is -ositively /orrelated +ith in/ome.

Therefore& an in/rease in -overty +ill e asso/iated +ith

a de/rease in the -rotein intake and vi/e versa. Se/ondly&

em-hasising the relationshi- of -overty and mortality&

$ngku A<i< suggested that a redu/tion in -overty is

sho+n y the in/rease in life e,-e/tan/y and de/rease in

infant mortality. Thirdly& the numer of sarng divided y

the numer of households aove the age of one kno+n as

sarng inde +as used to refle/t the severity of -overty.

'igures elo+ one indi/ate a /ondition of e,tremely

-oor& +hereas +ealthy d+ellers su/h as landlords and

government em-loyees have rates of =@7? sarongs. The

inde, +as used -rimarily to measure +hether there +ss

an in/rease or de/rease in -overty. Ho+ever& due to its

sus/e-tiility to variations in fashion& the sarng inde

+as dedu/ed to e un-ra/ti/al and +as /onseBuently

aandoned.

Other studies su/h as Anand 078==5 and Shireen

078895 develo-ed -overty -rofiles in their studies. #oth

studies found that the -er/entage distriution of -overty

among the values of ea/h demogra-hi/ variale lo/ate/on/entrations of -overty. 'urthermore& grou-s +ith high

in/iden/e of -overty indi/ate high@risk grou- of -overty.

Anand 078945& !shak Saari 0788=5 and Familah Ariffin

0788=5 ado-ted head@/ount ratio and revealed that -overty

in Malaysia is more -revalent in rural areas. !n another

study& Mohd Cusof 07885 highlighted that -overty

78

in/iden/e in uran areas is different from rural areas asuran -overty is asso/iated +ith fa/tors su/h as /ost of

living. %agayah 012213 1225 mentioned that -oor uran

households are more vulnerale to e/onomi/ sho/ks

/om-ared to rural -oor households. !n his study a--lying

distriutive@sensitive -overty indi/es& %oslan 01225

/on/luded that all measurements used su/h as -overty@

in/ome ga- inde,& Sen inde, and ';T inde, sho+ed

that there is eviden/e of -overty redu/tion& /onsistent

+ith the government -ulished figures. Em-loying

Malaysian 'amily Life Survey 0M'LS5& %oslan used

the

/ash and non@/ash in/ome to -ro,y in/ome re/eived y

households.More re/ent studies y Mohd Tai 012215 and

Mohd 'au<i 012285 used so/ial e,/lusion a--roa/h to

study various -atterns and ehaviour of the -oor. >hile

Mohd Tai /on/entrated on the uran -oor& Mohd

'au<i

fo/used his study on Malaysian natives 0Orang Asli )#

He develo-ed human -overty inde, from the /onte,t of

Malaysian natives to study the affe/t of marginalisation



or so/ial e,/lusion on the Buality of life amongst the

natives in the state of Perak. He /on/luded that there is a

-ositive /orrelation et+een -overty and marginalisation.

The more natives are marginalised& the -oorer are their

/onditions. Poverty +as -ro,ied y the multidimensional

natured inde, taking into a//ount different dimensions

su/h as edu/ation level& health/are& Buality of d+elling

et/. S-e/ifi/ dimensions that /ontriuted to the high

-overty in/iden/e of natives su/h as so/ial and e/onomi/

Akademika 81(1)

>helan 012285 highlighted that non@monetary indi/atorstogether +ith monetary or finan/ial data +ould e

ale to im-rove the measurement and understanding of

-overty es-e/ially in ri/h /ountries.

%ealising the im-ortan/e of re/ognising the

multidimensionality nature of -overty& $nited "ation

evelo-ment Program 0$"P5& ado-ted /on/e-ts su/has de-rivation and /a-aility -ioneered y Sen 078==5

y devising the human -overty inde, 0HP!5. The HP!

measured -overty from three dimensions namely&

the mortality rate 0short life5& kno+ledge and the

overall standard of living 0a//ess to -rivate and -uli/

resour/es5. !m-roving on the +orks of Sen& Alkire and

Santos 012725 introdu/ed the Multidimensional Poverty

!nde, 0MP!5 using ten indi/ators& +hi/h /orres-onded to

the three dimensions in the HP!. One major advantage

of using inde, su/h as HP! and MP! is that it fa/ilitates

authorities to determine -oli/ies a//ording to -riorities

as sho+n y the dimensions. Poli/y makers +ould e

ale to dra+ s-e/ifi/ ste-s a//ording to the various

dimensions that /ontriute to the in/iden/e of -overty in

a -arti/ular so/iety. The MP! in -arti/ular /ould e used

to formulate -oli/ies that /ould address de-rivations

fa/ed y the -oor. ue to this reason& it is im-erative

for a more holisti/ method to e ado-ted in Malaysia

0'igure 75 using inde,.

e,/lusion su/h as edu/ation fa/ilities& health/are and

infrastru/ture +ere highlighted. !n other +ords& Mohd

'au<i a/kno+ledged the im-ortan/e of studying -overty

using multidimensional a--roa/h from the -ers-e/tive of

Monetary !ndi/ators "on@monetary !ndi/ators

natives. Ho+ever& su/h studies are s/ar/e in Malaysia.

Therefore& a multidimensional method is deemedne/essary in understanding -overty in Malaysia.

PO6E%TC '%OM A M$LT!!ME"S!O"ALPE%SPE*T!6E

Holisti/ Poverty Measurement

Malaysian Poverty !nde,

0Multidimensional -overty measurement5

es-ite eing the most /ommon method of measuring -overty in Malaysia& there are some dra+a/ks in the

'!;$%E 7. Multidimensional Poverty Measurement

in/ome a--roa/h. 'irstly& it is not easy to determine the

needs of ea/h individual as the needs of individuals differ.

Se/ondly& needs of different genders are different and the

e,a/t differen/e in metaiologi/al rate et+een them isnot easily determined. Thirdly& non@monetary items& +hi/h

refle/t the Buality of life& are not in/luded su/h as si<e&

ty-e and o+nershi- of house& edu/ation level et/. 'ourthly&

it /an e argued ho+ e/onomi/ fa/tors su/h as inflation

and -ri/e /hanges are in/or-orated in the determination

of household ne/essities. ue to this reasons& -oli/y

makers and resear/hers in develo-ed nations have o-ted

for other a--roa/hes su/h as /a-aility& so/ial e,/lusion

and PPA a--roa/hes& +hi/h are multidimensional in

nature that in/ludes non@monetary indi/ators. "olan and

This -a-er -ro-oses to use the inde, /on/e-t& +hi/h is

a method used to measure magnitude of /hange over time

or -la/e or individuals. #y using this method& /om-arisons

/an e made +ith greater ease. 'or instan/e& the Humanevelo-ment !nde, 0H!5 develo-ed y $nited "ations

0$"5 is ale to /om-are the level of human develo-ment

from one /ountry to another. 'or instan/e& the Human

evelo-ment !nde, 0H!5 develo-ed y $nited "ations

0$"5 is ale to /om-are the level of human develo-ment

from one /ountry to another. S-e/ifi/ally& H! looks at

the level of develo-ment in seven /ategories su/h as

trade stru/ture& gender em-o+erment and unem-loyment.

Thus& inde, is a useful tool to measure /hanges a//ording

to time. !n Malaysia& E/onomi/ evelo-ment !nde,


0E!5 and Malaysian uality of Life !nde, 0ML!5 areused to measure the effe/tiveness of the develo-ment

-oli/ies of the /ountry. 'or e,am-le& E! is used to

measure e/onomi/ a/hievements from the -ers-e/tive

of e/onomi/ develo-ment indi/ators. On the other

hand&

ML! /om-ares so/io@e/onomi/ a/hievements in areas

su/h as health& edu/ation and entertainment.



7?

/ators in +hi/h the average multidimensional@-oor

-ersons giving de-th and roustness to the analysis and

inter-retation of the findings.

The Malaysian Human Poverty !nde, 0MHP!5

+ould e formulated to suit to the lo/al /onditions

in/or-orating the methods ado-ted y Mohd 'au<i

012285 and Alkire ) 'oster 012725. The formula for

MHP! is as elo+. Ea/h /om-onent re-resent differentTA#LE ?. Multidimensional Poverty imensions monetary and non@monetary variales su/h health&

edu/ation and standard of living. "o. imension es/ri-tion

7.

1.

4.

Health

Edu/ation

Standard of living

*hild mortality

"utrition

Cears of s/hooling

*hild enrolment

Ele/tri/ity

rinking +ater

HP7+ >7(7 N >1(1 N .. N >n(n , 722I

>7N>1N>4N>n

+here (7& (1&(n Q dimensions of +elleing

>7& >1..>n Q +eightage

*O"*L$S!O"Sanitation 'looring

*ooking fuel

Assets

;ure: Alkire ) Santos 012725

The -ro-osed inde, +ould e ased on the uality

of Life !nde, 0L!5 ado-ted y Mohd 'au<i 012285 onMalaysian natives using HP!& +hi/h +as develo-ed

y $"P ased on the +orks of Sen 078==5& and

the re/ently introdu/ed MP! develo-ed y Alkire )

Santos 012725. The HP! measured -overty from three

dimensions namely& the mortality rate 0short life5&

kno+ledge and the overall standard of living 0a//ess

to -rivate and -uli/ resour/es5. The mortality rate

+as -ro,ied y the -er/entage of -eo-le e,-e/ted to

die efore the age of 2 years 02 years for highly

develo-ed nations5. Mean+hile& kno+ledge +as

re-resented y the -er/entage of adults in the /ountry

to e illiterate. The /omination of a//ess to health

servi/es& a//ess to safe +ater and the -er/entage of

malnourished /hildren under five re-resented the

overall standard of living. One major advantage of the

HP! is that it fa/ilitates authorities to determine -oli/ies

a//ording to -riorities as sho+n y the dimensions.

On the other hand& MP! has three dimensions& namely

health& edu/ation and standard of living using ten

indi/ators as e,-lained y Tale ?.

!t is ovious that MP! has een e,tended from the

HP! +ith the addition of ne+ variales although the

dimensions are Buite similar. The main advantage of

the MP! is that the variales in/luded +ould enhan/e the

monitoring of millennium develo-ments goals 0M;s5 set y $nited "ations and >orld #ank. The M; -rovides

data and statisti/s& +hi/h are -resented annually to

the relevant odies as mentioned aove and used to

im-rovised efforts to address /ore de-rivations. Another

advantage is that the MP! /onsists of the -er/entage of

-oor 0head /ount ratio5 and the -ro-ortion of +eighted

The study is e,-e/ted to enhan/e the understanding

of -overty measurement in Malaysia as the

multidimensional -overty measurement method is

envisaged to suit the /urrent ra-id /hanges of the

Malaysian e/onomy. The -ro-osed measurement

method +ould e ale to /a-ture a more realisti/

-overty grou-. The identifi/ation of this -overty grou-+ould enale the relevant authorities to dra+ more

a--ro-riate and effe/tive distriutive methods and

-rogrammes that +ould e ale to redu/e the in/iden/e

of -overty in the /ountry. This /ould e a/hieved as

the -ro-osed -overty measurement method +ould

e ale to address the multidimensional fa/tors that

-revail in Malaysia# The introdu/tion of the -ro-osed

inde, +ould give alternatives in identifying the -overty

grou- to -oli/y makers from a different -ers-e/tive.

$sing inde, as a method to measure -overty& the

MP! is envisaged to refle/t the multi@dimensional

-henomenon of -overty in a more holisti/ +ay. Thus&a study to develo- this -ro-osed inde, is deemed

ne/essary and should e undertaken +ith immediate

effe/t to address the issues highlighted in this arti/le

+ith regard -overty measurement.

%E'E%E"*ES

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Atkinson& %. 7888. *omating So/ial E,/lusion in Euro-e: The

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#ritain 7887@8?. So/ial Poli/y and Administration.

Evans& M. 7889. #ehind the %hetori/: The !nstitutional #asis

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on !neBuality& Poverty and Human >ell@#eing. Helsinki

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that >e onDt Agree on the efinition of Poverty. EH

Pa-er Series 7=.Malaysian Plans 0various issues5. E/onomi/ Planning $nit&

Prime MinisterDs e-artment.

Mohd. 'au<i Harun ) Ahmad 'au<ee Adullah. 122=.

$emiskinan +engikut 1eri $n&ensinal dan ,erspektif

slam. $PE"A.

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+as"arakat Brang Asli ilema $emiskinan dan

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Malaysia. >orking Pa-er. $niversity of Malaya.

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%elief >orld+ide& #irmingham. $nited Kingdom.


Mohamed Saladin Adul %asool

'a/ulty of #usiness Management&

$iTM Melaka #ran/h

Mohd'au<iMohd



arun'a/ulty of #usiness Management&

$iTM Perak #ran/h

Ariffin Mohd Salleh

'a/ulty of #usiness Management

$iTM Melaka #ran/h

"oraini !dris& Ph.

'a/ulty of E/onomi/ and #usiness Management

$niversiti Keangsaan Malaysia

422 #angi& Selangor

Malaysia

81

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