Najib’s poverty illusion

Najib claims his government has reduced poverty in Malaysia. In reality, the country is approaching a crisis.

By Oliver Ward

In early 2017, Malaysian Prime Minister Najib Razak announced his plan to reduce poverty in Malaysia. He promised every citizen would benefit from Malaysia’s economic development. Nine months later and Najib has not been true to his word. He is leaving many citizens behind.

The government’s statistics do not reflect the whole truth

Najib celebrated the poverty rate of Malaysia dropping to 0.6%. Indonesia has a rate of 40% and in the Philippines it is 26.3%. Najib took the opportunity to express pride at the gross national income (GNI) per capita during his speech at Invest Malaysia in July. The figure is now at US$9,850, an increase of 30.5% on the 2009 figure.

But these figures do not paint the whole picture. While GNI per capital was increasing up until 2014, in recent years, it has fallen. Najib did not mention the decrease in his speech.

Source: World Bank

GNI per capita has been falling, while living costs have been steadily rising. Between 2010 and 2017 food and non-alcoholic beverages in Malaysia have increased in price by 30.3%. Housing, water, and electricity bills increased by 22.6% in the same period. As a result, rising costs are eroding living standards in Malaysia.

The number of poor families is increasing

In 2014, the Selangor Islamic Religious Council registered 44,393 families as poor. In 2016, this number increased to 46,500. The situation is reaching a crisis point. A recent survey by Merdeka Centre found that around 15% of Malaysians are skipping meals to ensure their survival. The World Health Organisation (WHO) also found that 28% of children between 12 and 23 months-old in Malaysia suffer from stunting due to malnutrition. The WHO considers 30% a health emergency.

Suriani Aziera and her husband live off less than RM2,000 (US$490). Her husband is a lorry driver. She described her battle for survival, “on top of the money I receive from my husband’s salary, I’ll beg”. “I have been insulted for begging for food to feed my children”.

The erosion of living standards could cost Najib re-election

In March 2017, Malaysia’s annual inflation rate reached 5.1%, far higher than others in the region. Indonesia recorded an annual inflation rate for 2016 of 3.5%, the Philippines hit 1.8%, and Vietnam reached 2.7%. High inflation in Malaysia, coupled with declining living standards, widespread poverty, and malnutrition signal that Najib is losing his grip on the situation.

Najib attempted to reassure voters the situation is under control. Earlier this year. He said, “we have done a lot of work to ease the people’s burden related to the rising cost of living”. He was referring to the introduction of price controls and the increase in affordable housing and healthcare. But high inflation and Najib’s decision to scrap fuel subsidies have swallowed up these small gains.

His opponents are circling. Former Prime Minister Dr Mahathir Mohamed said, “many people feel how poor they are now”. The topic of poverty has become a chink in Najib’s armour ahead of the 2018 election. His opponents, like Mahathir, will use it against him. Unless he can show the public that he has the solutions to ease the vice-grip of poverty, the Malaysian population will remain unconvinced that the future will be brighter under his leadership.