SECOND ASEAN PLUS THREE HIGH-LEVEL SEMINAR ON POVERTY ALLEVIATION 25TH -29th SEPTEMBER 2006 THE MINISTRY OF RURAL AND REGIONAL DEVELOPMENT (MRRD) MALAYSIA

POVERTY ALLEVIATION: MALAYSIAN EXPERIENCE

OUTLINE Objective Introduction 1. Brief on Malaysia 2. Poverty in Malaysia 3. Rural Transformation in Malaysia Poverty Reduction Policies, Strategies and Programs in Malaysia Achievements of Poverty Eradication Programs Key Success Factors Conclusion

OBJECTIVE To present the Malaysian experience in poverty reduction that could be shared among the member countries of ASEAN Plus Three

MALAYSIA IN THE WORLD MALAYSIA

MAP OF MALAYSIA Peninsular Sabah Sarawak Area = 330,242 sq. km Population 2003 = 24.5 million Indigenous Group – 66.1% Chinese -25.3% Indian – 7.4% Others – 1.2%

DEFINITION OF POVERTY Absolute Poverty Lack of income to acquire minimum necessities of life Poverty Line Income (PLI) – a minimum income level needed by a household to meet its basic expenditure on food and non-food, required for a decent standard of living PLI (2004): Peninsular Malaysia – RM661/US$174 Sabah – RM888/US$233 Sarawak – RM765/US$201

Linked to the notion of income disparity between groups Cont.. Relative Poverty Linked to the notion of income disparity between groups Measured by Income Disparity Ratios between groups Examples: The top 20 and bottom 30% of the population or between the various ethnic groups or between the urban and rural dwellers

MALAYSIA : EVOLUTION AND TRANSFORMATION OF RURAL DEVELOPMENT FIRST TRANSFORMATION (1957-1994) NPSRD Towards 2020 SECOND TRANSFORMATION (1994 – 2020) . . . . . 1957 1971 1991 1994 2000 2010 2020 PRE-NEP Growth Focus on Basic and Minimum Needs at Grassroots Level Agriculture the Prime Economic Activities RED Book Implementation & Monitoring system NEP : Growth with Equity Creation of New Agencies Aggressive Poverty Redressal New Land Development/In-Situ Subsidised Services NDP : Balance Growth Streamlining and Rationalizing of Roles of Agencies Commercialization of Agriculture/Market Driven Approach Relative Poverty/ Focus on Hardcore Poverty NVP : Sustainable Development To Create a Rural Setting that is Developed, Attractive and Profitable Reduction of Poverty and eradication of Hardcore poverty Focus on Human and Economic Development

THE 7 INITIATIVES UNDER THE SECOND RURAL TRANSFORMATION Nurturing Excellent Individuals Strengthening the Well-being of Family Institutions Developing a Resilient Society Providing Quality Infrastructure, utilities & amenities Developing a Sustainable Economy Providing Effective Delivery System Developing Institutional Framework which are Responsive to Changes

POLICIES AND STRATEGIES Increase opportunities for inter-sectoral movements of the poor from low productivity to higher productivity economic activities Increase the productivity and income of low productivity occupations through skill training, adoption of modern techniques and facilities and using higher yielding

CATEGORIES OF POOR HOUSEHOLDS Households who earned a monthly income less than the specified PLI Hardcore poor Households whose earned monthly income less than the specified for the hardcore poor (food PLI)

MALAYSIA: INCIDENCE OF POVERTY AND HARDCORE POVERTY, 2004 STATE POOR HARDCORE POOR Urban Rural Overall Johor 1.0 4.2 2.0 0.2 0.5 0.3 Kedah 3.0 9.8 7.0 1.8 1.3 Kelantan 8.3 11.8 10.6 0.8 1.5 Melaka Negeri Sembilan 2.5 1.4 - 0.4 Pahang 1.1 5.6 4.0 1.6 Pulau Pinang 0.1 0.7 Perak 2.2 9.5 4.9 2.6 Perlis 5.2 6.9 5.3 1.7 Selangor 3.7 0.0 Terengganu 10.9 20.4 15.4 2.9 5.9 4.4 W.P. Kuala Lumpur Peninsular Malaysia 7.9 3.6 Sabah & Labuan 12.9 35.6 23.0 2.4 11.6 6.5 Sarawak 7.5 2.1 Malaysia 11.9 5.7 1.2 Source: Economic Planning Unit, Prime Minister’s Department

POVERTY REDUCTION PROGRAMMES POVERTY REDUCTION PROGRAMMES RESETTLEMENT SUPPORT FACILITIES IN-SITU DEVELOPMENT POVERTY REDUCTION PROGRAMMES INCORPORATE TRAINING INTEGRATING AGRICULTURAL/ DOWNSTREAM PROCESSING FARMERS’ MARKETS IN URBAN CENTERS TO ENABLE DOUBLE CROPPING, INTER-CROPPING AND MIXED FARMING

PEOPLE’S WELL-BEING DEVELOPMENT SCHEME INCOME GENERATIG PROGRAM SKILL TRAINING & CAREER DEVELOPMET PROGRAM EDUCATIONAL DEVELOPMENT PROGRAM CHILD NURSERY DEVELOPMENT PROGRAM MIND-SET CHANGE PROGRAM PROGRAMMES COMMUNITY RESETTLEMENT DEVELOPMENT PROGRAM HOUSING ASSISTANCE PROGRAM DIETARY FOOD SUPPLEMENT PROGRAM

DATA BANK FOR HARDCORE POOR Hardcore Poor Registry (on-line computerized Hardcore Poor Profile) The Right Targeting and Matching of profile and project (based on needs) Streamlining all the assistance by various Ministries and Agencies

ACHIEVEMENTS OF POVERTY ERADICATION PROGRAMS 1970 1990 2000 2002 2004 Incidence Of Poverty 58.7 21.8 7.5 5.1 5.7 No. of Poor Households 705.9 530.3 360.1 267.9 311.3 Incidence of Hardcore Poverty - 5.2 1.4 1.0 1.2 No. of Hardcore Poor Households 66.0 52.9 67.3 Total Households 1,203.4 2,431.9 4,800.0 5,220.6 5,459.4 Notes: The increase in 2004 due to revision on PLI measurement

RURAL INFRASTRUCTURE AND UTILITIES Rural Water Supply (92%-99%) coverage Rural Electricity (78%-99%) coverage Village Roads (35,551 km) Rural Roads (1,000 km)

CRITICAL SUCCESS FACTORS Political and economic stability Full commitment of the political and administrative leaders - Continuous budgetary support - Administrative machinery geared for development Rural development and poverty eradication are integral and critical components of national development plan Clear and explicit policy statements. Clear identification of target groups, clear matching of programmes and needs of target groups Government plays the leading role in rural development and at the same time encourages private and NGO sectors involvement.

CONCLUSION Balance development – strong and real emphasis on equitable distribution of development benefits Target-specific - addressing issues on the pockets of poverty The philosophy of development, growth with equity is integrated in all the Malaysian development policies.

Thank You