Speaking at the “Ungku Aziz Development Forum on Poverty Eradication”, hosted by Universiti Malaya, Madeline Berma defined these new poor as people from the M40 middle-income group who have fallen into the B40 group due to pandemic-related hardships.
“These are the ones I would never imagine would become B40. Most are from the lower section of the M40 … when the pandemic hit they lost their jobs and their income,” said the Universiti Malaysia Sarawak economics professor.
Rather than cash aid, which has been used throughout the pandemic to help alleviate the strain on those in the lower-income group, these “new poor” need targeted strategies that provide opportunities rather than direct fiscal stimulus.
“Handouts don’t solve their problems. To me, it is about giving them opportunities, like if the government has small contracts, or creating income-generating activities.”
She said these people are generally well educated, have an existing professional network and have good technical knowledge. So, rather than money, “what they need is a small push” to get back to where they once were.
Sulochana Nair of Binary University said if the Covid-19 pandemic showed no signs of improvement, the poverty situation in rural and urban areas could worsen in the coming years.
“The amount of expenditure by the urban population (now in poverty) was more than double their income,” adding that this habit of spending more than their income had landed them in a lot of debt.
Sulochana said the pandemic had shown the cracks and fragility of the system, such as the lack of social safety nets and the lack of access to basic needs in the handling of poverty in Malaysia.
“The government also needs to come up with new strategies and programmes. Over time, pockets of poverty have emerged and people require targeted and differentiated approaches to poverty reduction.
“There needs to be tailor-made policies and programmes, depending on the different poverty groups, as it varies depending on their environment, socio-economic status and generational makeup of the household. It’s time to move away from blanket strategies,” she said.