Some Comments on the Eradication of Poverty under the Third Malaysia Plan

Abstract

In July this year, the Malaysian Government launched its Third Malaysia Plan (TMP), the fifth Five-Year Plan1 in the country ever since 1956. Being an extension of the Second Malaysia Plan (SMP) and constituting the second phase in the implementation of the New Economic Policy (NEP), the TMP naturally embodies the two-pronged objectives of the NEP, namely : the eradication of irrespective of race, and the restructuring of Malaysian society in order to correct racial imbalance and eventually to eliminate the identification of race with economic functions and geographical location. In fact, due to the studies undertaken during the SMP to assess and quantify the extent of in Malaysia, the TMP has, for the first time, specified explicitly the targets of eradicating and reducing economic imbalances in the various states of Malaysia. According to the TMP, as many as 791,000 households (or 49-3 % of all house holds) in Peninsular Malaysia received less than the line in 1970 (TMP, 1976-80, Kuala Lumpur, 1976, p. 160). Unfortunately, it does not reveal what level it uses as the line. It only mentions that the poverty line income takes account of minimum nutritional and other non-food require ments of each household to sustain a decent standard of living based on the estimates made by the Institute of Medical Research and the Ministry of Social Welfare. Despite this glaring omission, the Plan claims that the percentage of poor house holds in Peninsular Malaysia has declined to 43-9 in 1975. However, the total number of poor households in 1975 has increased to 835,100 (TMP, p. 73) ? an increase of 43,300 households or an average rate of increase of 1 % per annum. These poor households are found in all communities and in both rural and urban areas. But the bulk is Malay (about 74% of all poor households) and is found in the rural areas (about 86 % of the total). According to the TMP, the major groups affected by are the padi-planters, rubber smallholders, coconut smallholders, fishermen, estate workers, residents of New Villages and agricultural labourers. Faced with this situation, the TMP has set a target to reduce the incidence of in the whole country to 33-8 % in 1980 (p. 73). This means that the present 835,100 poor households would be reduced in number to 768,300 house holds by the end of the Plan. Using the data on per capita Gross Domestic Product (GDP) as a measure of differences, the TMP also reveals the economic imbalances between the various states in the country. It shows that in 1975, for example, the per capita GDP of Selangor (including the Federal Territory) is 53 % higher than the national average while the per capita GDP of the four poorest states of Kelantan, Trengganu, Kedah and Perlis is less than two-thirds of the national average (p. 200). In order