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Income Inequality in Malaysia

After achieving independence in 1957, the Malaysian government has maintained a laissez-faire approach. To an extent, this approach was successful as the country’s GDP grew by 4.1 percent from 1956 to 1960, 5.0 percent from 1961 to 1965 and 5.4 percent from 1966 to 1970. However, despite these positive trends, economic disparity continued to persist.

The UNDP 1997 Human Development Report and the U.N.’s 2004 Human Development Report (UNHDP) both found that Malaysia has the highest income gap between the wealthy and poor in Southeast Asia (including Thailand, Singapore, Indonesia, Vietnam and the Philippines). The UNDP’s research also found that the richest 10 percent in Malaysia earn 38.4 percent of the nation’s wealth. In comparison, the poorest 10 percent only control 1.7 percent.

Impact of Income Inequality in Malaysia on Children

This level of income inequality Malaysia has an especially concerning impact on children. UNICEF warns that the widening gap between the poorest and richest 20 percent has implications on child development, protection, participation and survival. Dr. Alberto Minujin, Professor at The New School and at Columbia University explains that children experience poverty differently than adults. They are especially vulnerable to certain types of deprivation and even short-term destitution can result in long-term effects. For instance, malnourishment can influence a child’s health and ability to perform well in school. This in turn would negatively affect their long term health and education.

Hans Singer, who works for the U.N.’s Economic Affairs Department, explains that investing in children would actually help the economy. In his study, “The Role of Children in Economic Development,” Hans found that malnutrition was a factor in low productivity in developing countries. Therefore, development initiatives focused on the wellbeing of children would further spur the economy and potentially shrink Malaysia’s income gap.

On a national level, UNICEF Malaysia has been supporting the government to implement development initiatives to improve the well-being of children and improve inclusivity. Initiatives range from promoting equity to strengthening national policies to establishing social services to child-focused social inclusion and disparity reduction.

Recent Legislation Protecting Children

One of the organization’s achievements was the enactment of the Sexual Offences against Children Act 2017. This piece of legislation allows for the advancement in the protection of children from sexual crimes. UNICEF Malaysia programme priorities match the goals of UNICEF’s East Asia and Pacific Regional Headline Results. This means they focus on protecting children from both online and offline sexual exploitation, abuse and violence, fighting harmful practices against girls, strengthening civil registration and increasing access to justice and family-based care.

On a global level, UNICEF has also launched several development initiatives for the benefit of Malaysia’s children. In the 1980s and 1990s, the organization formulated the First Call for Children concept, which mandates that “children’s priority needs should have a first call on resources.” In addition, UNICEF established the 20/20 principle — a new initiative to restructure existing spending methods, rather than adding additional funds, to maximize current resources. The idea was that both donor and developing countries would contribute 20 percent of their national public expenditures to basic needs including primary health care, primary education, clean water and reproductive health in hopes of achieving greater global collaboration for a good cause.

– Iris Gao
Photo: Flickr

SOLS 24/7
SOLS 24/7 is an international humanitarian organization dedicated to ending poverty in Malaysia. It aims to provide poor and underserved people with technology and education to which they otherwise would not have access. The nonprofit runs five social enterprises to help eradicate poverty in Malaysia.

Five Ways SOLS 24/7 Promotes Technology and Education

  1. SOLS Energy
    SOLS Energy believes that solar panels are the best way to alleviate poverty in Malaysia in a lasting, sustainable way. Malaysia is the world’s third-largest producer of solar panels; local production makes solar panels affordable and their purchase supports the domestic economy. Malaysian homes with solar panels get, on average, a 16.9 percent return on their investment annually from being able to sell excess solar power to the electric grid. In total, the solar panels distributed by SOLS Energy have prevented more than 162,000 pounds of CO2 emissions from electricity generated by fossil fuels. SOLS Energy also runs Solar Academy, which trains Malaysians in solar technology to create jobs and spread the knowledge of how to maintain, install and repair solar panels.
  2. SOLS Tech
    SOLS Tech has a twofold goal: eliminate e-waste and spread digital literacy in Malaysia. As a licensed electronics refurbisher, SOLS Tech collects, repurposes and distributes discarded electronic devices. In 2015 alone, Malaysians discarded 44 million electronic devices. Rather than let this waste sit in landfills and pollute the environment, SOLS Tech fixes discarded electronics and shares them with those in need. Approximately 10 million Malaysians do not have access to a computer. SOLS 24/7 believes that computer literacy skills and computer ownership will widen economic opportunities and help alleviate poverty.
  3. SOLS Smart
    SOLS Smart aims to provide high quality and affordable education to all Malaysians. It teaches English and computer literacy, two skills that SOLS 24/7 views as essential to thriving in the modern economy. SOLS Smart is a certified Cambridge English Language Assessment Centre, meanings its students can take the internationally recognized Cambridge English Exams. Learning English and passing these exams opens new opportunities in employment and further education. To date, English classes have reached more than 10,000 Malaysians, and another 5,000 have received training in computer skills. SOLS Smart is one of seven Google for Education partners in Asia. Students are taught to use Google software and products and, at the end of their training, can receive an official certification from Google.
  4. SOLS Scholars
    SOLS Scholars works to help promising students from underprivileged Malaysian communities pursue higher education. It has held more than 100 development workshops, at which students receive academic coaching, job preparation training and college counseling. It has provided more than 450 scholarships to universities across Malaysia for students who otherwise would not be able to afford higher education.
  5. SOLS Edu
    Combining SOLS 24/7’s interests in education and technology, SOLS Edu is a digital learning platform that can be accessed by app or online. The idea behind SOLS Edu is to offer Malaysians, newly equipped with technology through the SOLS Tech program, another way to receive an education. The digital platform is interactive; students learn in a variety of ways (games, videos, etc.) and teachers remotely track students’ progress. SOLS 24/7 believes that access to education and technology will give Malaysians living in poverty new economic opportunities and a brighter future.

Through its many social enterprises, SOLS 24/7 is working to alleviate poverty in Malaysia. Its focus on both education and technology is reflective of the highly globalized, highly electronic modern world of today. By offering classes, job training and education opportunities, as well as providing people access to electricity and electronic devices, SOLS 24/7 is helping millions of poor Malaysians shape a brighter future for themselves.

– Abigail Dunn
Photo: Flickr

Malaysia_Poverty
The Southeast Asian nation of Malaysia is not a desperately poor country. Poverty in Malaysia is fairly low — the percentage of citizens at or below the national poverty line was 0.6 percent in 2014. Life expectancy and the infant mortality rate are about the same as in the U.S. and the GDP is growing.

Reducing poverty in Malaysia has come a long way since 1990 when the United Nations introduced the Millennium Development Goals. The first goal for the U.N. — to halve the number of people living on less than $1.25 a day by 2015 — was reached in Malaysia.

However, Malaysia has significant poverty and income inequality lurking just below the surface. While extreme poverty in Malaysia (income of less than $1.25 per day) is down to less than one percent, more than 25 percent of the population lives on less than $5 per day. Furthermore, about 60 percent of Malaysian families live on less than $1600 a month according to Al Jazeera.

About 20 million of the 30 million people in Malaysia live on the peninsula and approximately 72 percent of the population is urban.

The area in the need of the most support is the rural sector of Sabah on the island of Borneo. Borneo is a large island shared by Malaysia, Brunei and Indonesia so migration around the island is common.

The country is now home to about 2 million immigrants due to migration and recent political turmoil in neighboring Thailand. At this time there is no process for asylum seekers in Malaysia.

Both legal and illegal immigrants are known to be treated harshly and do not receive government support. It is imperative for the Malaysian government to address the needs of migrants as they make up over 10 percent of the population.

Malaysia also has relatively high levels of income inequality. The GINI index measures how much income levels deviate from totally equal distribution. Malaysia places higher than most countries, including all of its neighboring countries and the United States, with a GINI index of 46.2.

Malaysia stands out among its surroundings despite these problems. Nations like Laos, Myanmar and the Philippines all hover around a 25 percent poverty rate and an infant mortality rate that is between three and seven times higher than Malaysia.

Malaysia is also the only country among them with a functional and robust social welfare system. It is clear that further steps must be taken but remarkable progress has been made to reduce poverty in Malaysia in the past few decades.

John English

Photo: Flickr