Malaysia is located on the Malay Peninsula in Southeast Asia and is home to more than 30 million people. It has a Gross domestic product (GDP) of $407 million (2022 estimate). Furthermore, improvements in health care have led to a significant increase in life expectancy, from less than 60 years in the ’60s to more than 76 years in 2024.

Renowned for its strides in poverty alleviation, Malaysia’s citizens have reaped the benefits of its economic expansion. According to the Commission on Growth and Development, Malaysia is one of the first 13 countries to experience more than 7% growth yearly for more than 25 years.

Poverty in Malaysia

According to the United Nations Children’s Fund (UNICEF), before the COVID-19 pandemic, approximately 6% or 405,000 Malaysian households experienced acute poverty. However, this number rose significantly to more than 630,000, while the number of families living in extreme poverty tripled to 78,000. Further, migration from rural areas to urban areas has increased urban poverty, which has been exacerbated by crony capitalism and a rising cost of living.

Factors Causing Malaysia’s Poverty

1. Rural to Urban Migration

In recent decades, poverty has been much higher in rural areas than in urban areas in Malaysia. As a result, the government’s poverty-reduction programs and policies were focused on rural poverty, neglecting urban poverty. Many people, including many foreign workers, moved to cities from rural areas during that same period.

This rural-to-urban migration put pressure on urban infrastructure and essential services. Currently, more than 70% of Malaysians live in urban areas. This led to increased unemployment and consequently, large families earning low wages now suffer from a lack of basic resources.

2. High Cost of Living

The cost of living in urban areas is significantly higher than in rural areas. On average, about three out of 10 Malaysians feel they do not have enough money to purchase basic needs such as food. This is more significant among urban residents, where 28.7% feel this way.

This skews the perception of poverty in rural areas relative to urban areas. However, a Malaysian man says, “In rural areas, the cost of living is cheaper and there is no housing shortage. Food supplies can be supplemented by farming, growing your own vegetables and rearing chickens. But you can’t do that in flats in urban areas.”

Food prices have skyrocketed in Malaysia and several people, especially those from lower- and middle-income households, have to skip meals daily. Despite many years of economic growth, the increase in food prices means Malaysians can experience poverty in urban areas even if they are technically earning an income above the poverty line.

3. Ethnic Disparities

Malaysia broadly defines ethnic minorities as “Other Bumiputera,” which encompasses communities such as the Orang Asli and all indigenous peoples living in the Sabah and Sarawak states. Poverty rates among “Other Bumiputera” are consistently much higher than ethnic-majority groups. For example, the poverty rate in the Sabah state is six times higher than the national poverty average.

The Good News

Like any country, some of Malaysia’s citizens are experiencing poverty, which must be addressed. However, Malaysia has made major strides in reducing poverty since the ’80s. Today, the government provides free primary and secondary education for all Malaysians and health care is free in rural areas and very low cost in urban areas. In short, there is always room for improvement and Malaysia is on the path to eliminating poverty.

– Olivia Bradley

Photo: Flickr
Updated: May 27, 2024