Volume 3, Number 1 (2017) pp 29-42 doi 10.20448/807.3.1.29.42 | Research Articles
Malaysia is a good example for poverty reduction especially in Southeast Asia Countries, having reduced its poverty rate from 49.3% in 1970 to 17% in 1990 to 3.8% in 2008 and only 1.7% in 2012 - a decrease of nearly 97%. In aggregate terms, Malaysia is ahead of the 2015 deadline on all the Millennium Development Goals (MDGs), and its emphasis on poverty in its diverse forms. The Malaysian government has been committed to eradicating poverty through various Malaysian policies since 1957; including Malaysia Plans, New Economic Policy (1970-1990), National Development Policy (NDP, 1991-2000), ‘Vision 2020’, Industrial Master Plans, National Agriculture Policies, Privatization Master Plan and the New Economic Model (NEM, 2010). Among the important initiatives that contributed to the success of poverty reductions in Malaysia are: the eKasih system, 1AZAM program, Federal Land Development Authority of Malaysia (FELDA), and the 1Malaysia concept. Malaysia’s poverty eradication and development programmes are underpinned by political stability, inclusiveness, strong political will and the overall importance it attaches to ethnic tolerance and national unity. In conclusion, poverty is a multi-dimensional phenomenon that extends beyond income poverty, and poverty eradication should remain at the core of transformative development agenda for all times. This paper will share related experiences to show that poverty reduction as a socio-cultural and developmental goal is achievable and in fact an inalienable part of sustainable development.
Keywords: Poverty alleviation, Sustainable development, Malaysia case study, Poverty solution.
Citation | Normaliza Abdul Manaf; Kamarulazizi Ibrahim (2017). Poverty Reduction for Sustainable Development: Malaysia’s Evidence-Based Solutions. Global Journal of Social Sciences Studies, 3(1): 29-42.
Copyright: This work is licensed under a Creative Commons Attribution 3.0 License
Funding : This study received no specific financial support.
Competing Interests: The authors declare that they have no competing interests.
History : Received: 3 February 2017/ Revised: 14 March 2017/ Accepted: 6 April 2017/Published: 26 April 2017
Publisher: Online Science Publishing
Poverty is a multifaceted phenomenon and different societies have different perceptions. It is generally classified into three groups: first, absolute poverty, where one has less than objectively-defined thresholds and is a serious situation of deprivation; secondly, relative poverty, where one has less than others in the same society and; thirdly, subjective poverty, which is a case where one feels wanting because of a sense of not having enough to get along (Henry and Amir, 2011; Kumaran, 2013). The decline in Malaysia’s poverty incidence was mainly due to high and sustained economic growth, which averaged 6-7 per cent annually. This factor provided ample opportunities for job and business creation for the population. The poor have benefited from changes in the sources of household income, which includes an increasing portion of non-farm income and remittance from family members working in urban centres and industrial areas (Musalmah, 2005). This paper will discuss mainly Malaysian policies, strategies and initiatives that have helped to reduce poverty over the last four decades. After independence in 1957, Malaysia’s performance in economic growth and development has been impressive. In Malaysia, the poverty line income (PLI) is set around RM860 per month. This is the national average although it tends to vary according to regions - the peninsula, Sabah and Sarawak (Zulkarnain and Isahaque, 2013).
The outcome of the 2005 World Summit was a follow-up summit meeting to the United Nations' 2000 Millennium Summit, which led to the Millennium Declaration and the Millennium Development Goals (MDGs), that was held from 14 to 16 September at United Nations Headquarters in New York. This has once again reaffirmed the global commitment to the eradication of poverty and to the promotion of sustained economic growth, sustainable development and global prosperity for all. It is worth remembering that earlier, commitments were made to implement multidimensional measures in dealing with poverty under the first United Nations Decade for the Eradication of Poverty (1997–2006). This commitment was further reinforced when the Millennium Declaration in 2000 proclaimed the eradication of poverty as the first achievable target of the MDGs. However, despite all the gains, total poverty eradication still remains an elusive target. More than one billion people are still living in extreme poverty, surviving on less than US$1.25 a day and in some countries the situation of extreme poverty seems to have exacerbated further.
Against this backdrop, it is pertinent for all of us to continue to focus on strengthening implementation of the poverty eradication programmes at all levels in an integrated manner. Malaysia concurs with the notion that the responsibility for poverty eradication rests primarily with national governments. However, solo efforts by governments without the requisite support from the international system will not bring much success. No nation will be able to fully generate positive economic growth without the support of a conducive and enabling international environment. Market accesses as well as foreign direct investments are among the many important factors that would contribute to promoting economic growth and generating productive employment. If we are really serious in eradicating poverty across the globe, national governments should not only be assisted and encouraged to formulate and implement the right development policies and programmes, but also the international community, in particular the developed country partners, must extend the necessary support to enable these countries to achieve a reasonable economic growth.
Prior to 1970, Malaysia's development policy was primarily aimed at promoting growth with a strong emphasis on the export market. Although the economy grew very rapidly during this period at an annual average of 6.0 per cent, there was insufficient emphasis on distributional aspects, resulting in socio-economic imbalances among the ethnic groups with negative social consequences in the form of a racial riot in 1969. In order to address this situation and to address societal imbalances, Malaysia introduced a variety of measures under a host of policies. They consisted of the New Economic Policy (NEP), 1970-1990 and the National Development Policy (NDP), 1991-2000. Complementing them was ‘Vision 2020’, which projected a vision of Malaysia becoming a developed country by the year 2020. Apart from them, there were also the Industrial Master Plans, National Agriculture Policies, Privatization Master Plan and the latest is New Economic Model (NEM). We would like to discuss a few policies on poverty reduction in some detail as follows:
The Malaysian Government is committed to eradicating poverty nationally, and gives priority to efforts in further elevating the status and quality of life of the lower income group. In Malaysia, the development planning has always been driven by the philosophy of “growth with equity”, and this principle has underpinned its efforts in the eradication of poverty. In order to improve the living conditions of the poor, Malaysia’s poverty eradication strategies have always placed emphasis on efforts to enhance income-earning opportunities. Malaysia has at all times recognized the multidimensional nature of poverty and the need for practical and integrated approaches to effectively eradicate it Shamsulbahriah and Norma (2013). In this connection, our development plans are divided into core national policies, with long-term, medium-term, annual implementation timeframes and special sector and industry-specific master plans.
3.1. New Economic Policy (NEP 1971-1990)
The launching of the New Economic Policy (NEP) in 1971 was a watershed in the history of Malaysian economic policy. The NEP underscored the importance of achieving socio-economic goals alongside pursuing economic growth objectives as a way of creating harmony and unity in a nation with many ethnic and religious groups. The overriding goal was national unity. To achieve this goal, two major strategies were adopted: 1) Reduce absolute poverty irrespective of race through raising income levels and increasing employment opportunities for all Malaysians; and 2) Restructure society to correct economic imbalances to reduce and eventually eliminate the identification of race with economic function. The NEP which covered the period from 1970 to 1990, managed to reduce poverty from 49.3 per cent in 1970 to 16.5 per cent in 1990 by focus on reduction in poverty and income disparities between ethnic groups, particularly by elevating the position of the Bumiputera and by implementing specific programmes for poverty reduction, directed to specific target groups such as paddy farmers, rubber smallholders, coconut smallholders, fishermen, estate workers, agricultural labourers and indigenous groups. Subsequent development policies such as the National Development Policy (NDP) had continued to incorporate elements of poverty eradication strategies in their implementation.
3.2. National Development Policy (NDP 1991-2000)
The new development policy (NDP) was introduced in 1991 as the successor to the NEP. While the NDP maintained the basic strategies of the NEP, the following were new initiatives: (i) the focus of anti-poverty strategy was shifted to the eradication of hard-core poverty; (ii) an active Bumiputera Commercial and Industrial Community (BCIC) was developed to increase their participation in the modern sectors of the economy; (iii) there was greater reliance on the private sector to generate economic growth and income; and (iv) emphasis was placed on human resource development as a primary instrument for achieving the objectives of growth and distribution.
NDP programmes included loan schemes for small-scale agricultural and commercial development modelled on the Grameen Bank, land consolidation and rehabilitation programmes, commercialization of farms, agricultural productivity enhancement projects, provision and improvement of services for the urban poor, and efforts to promote employment opportunities in manufacturing, construction, and other urban-based industries. Subsequent development policies such as the Vision 2020 had continued to incorporate elements of poverty eradication strategies in their implementation.
3.3. Vision 2020
Shortly after the Sixth Malaysia Plan was launched, former Prime Minister Tun Dr. Mahathir Mohamad outlined a vision of Malaysia that embraced national unity, social cohesion, the economy, social justice, political stability, system of government, quality of life, social and spiritual values, and national pride and confidence as integral parts of a bold new vision. In moving towards these goals, he stressed the importance of human resource development, export-led growth and industrial diversification, low inflation, and private/public sector partnerships. This vision has since influenced all strategic development plans of Malaysia. Subsequent development policies such as the National Vision Policy (NVP) had continued to incorporate elements of poverty eradication strategies in their implementation. This led to Vision 2020 when Malaysia would become a developed country.
3.4. National Vision Policy(NVP 2001–2010)
The main thrust of NVP is that the private sector will spearhead economic growth, while the public sector will provide the enabling environment and ensure the achievement of the socio-economic objectives. Key strategies of NVP include a knowledge-based economy, human resource development, and the shift of the key economic sectors towards more efficient production processes and high value-added activities. At the same time, further progress towards poverty eradication was expected to result from rapid economic growth, assisted by specific poverty alleviation programmes, consolidated under Skim Pembangunan Kesejahteraan Rakyat (SPKR), targeted towards eradicating poverty from areas and among groups where its incidence is high, such as the Orang Asli and other Bumiputera in Sabah and Sarawak (Madeline, 2003).
3.5.Government Transformation Programme(GTP)The Government Transformation Programme (GTP) was introduced by the current Prime Minister Dato' Sri Najib Tun Razak in April 2009. The objective of GTP was two-fold – first, to transform the Government to be more effective in its delivery of services and accountable for outcomes that matter most to the Malaysian people; and second, to move Malaysia forward to become an advanced, united, and just society with high standards of living for all. This is in line with the national mission of achieving Vision 2020 - that of Malaysia to become a fully developed nation.
The launch of the 1Malaysia concept of ‘People First, Performance Now’ by the Prime Minister in April 2009 had soon progressed into a well mapped out sequel of noteworthy transformation programmes – namely, the Government Transformation Programme (GTP) and the much anticipated Economic Transformation Programme (ETP), setting Key Performance Indicators (KPIs). Both programmes are bringing about positive results in eradicating poverty in Malaysia.
3.6. New Economic Model (NEM)
Malaysia has reached a defining moment in its development path. Vision 2020 is not possible without economic, social and government transformation. To move the country forward, the government has crafted a framework comprising four pillars to drive change (Figure 1). The New Economic Model (NEM) to be achieved through an Economic Transformation Programme (ETP) constitutes a key pillar which will propel Malaysia to being an advanced nation with inclusiveness and sustainability in line with the goals set forth in Vision 2020. The ETP will be driven by eight Strategic Reform Initiatives (SRIs) which will form the basis of the relevant policy measures. Two other pillars have been launched over the past year. They are the 1Malaysia, People First, Performance Now concept to unite all Malaysians to face the challenges ahead and the Government Transformation Programme (GTP) to strengthen public services in the National Key Result Areas (NKRAs). The last pillar is the 10th Malaysia Plan 2011-2015 and by implication the 11th Malaysia plan to be unveiled in 2015.
|Figure-1. The four pillars of national transformation|
|Source: NEAC (2010)|
The old growth model provided three decades of outstanding performance, permitting Malaysia to provide for the health and education of its people, largely eradicate poverty, build a world-class infrastructure and become a major exporter globally. Our people are wealthier and better educated. They live longer, travel more and have greater access to modern technologies than any previous generation. Inclusive growth in the NEM is about ensuring that every Malaysian has equal access and opportunity to be an active participant of the economic development. The focus is on uplifting the bottom 40% of Malaysian households with an average monthly income of RM 1,500 (US $484) (National Economic Advisory Council, 2010). This new initiative has started bearing fruits.
The NEM will be the catalyst to unleash Malaysia’s growth potential. It is designed to drive Malaysia forward from its current situation to be a high income economy which is both inclusive and sustainable (Figure 2).
|Figure-2. Goals of the Malaysia New Economic Model|
|Source: NEAC (2010)|
Although poverty alleviation strategies and programmes in Malaysia have been acclaimed as a success by United Nation Development Programme (UNDP) in its report on ‘Malaysia: Achieving the Millennium Development Goals: Success and Challenges’, many problems and challenges still exist especially in the urban area. New forms of poverty, which include single female headed households, the rural elderly, unskilled workers and migrant workers, have also emerged in the country as a result of rapid economic growth and the development process itself. All indications are that, the eradication of poverty will continue to be one of the main items in the national agenda to ensure that the poor are not left behind.
Policies and plans are one thing, but their effective implementation requires massive human and financial resources. In the next section, we would like to highlight a few such important initiatives. The initiatives such as eKasih, 1Azam, FELDA and 1Malaysia are among those that contributed to poverty reduction in Malaysia.
The eKasih system is a database system for poor families under the Ministry of Women, Family and Community Development. It was created at the national level to help the government to plan, implement and monitor poverty programme. The data in the eKasih system is from the census of poor household conducted by the Department of Statistics. Other than the census, the households who meet the criteria based on the poverty status of household income per capita PLI in 2007 which is less than RM 2300 a month can register themselves through www.ekasih.gov.my. This innovation was awarded the first prize in the United Nations Public Service Awards last year and the government has already set up the eKasih mobile team to ensure that all deserving citizens obtain assistance they need.
This programme is managed by the government via Amanah Ikhtiar Malaysia (AIM) known as 1Azam. The 1Azam provides opportunity for poor families in generating income in five areas, namely:
(1) Azam Work for opportunity to generate income through work placement,
(2) Agro Azam to generate income based on agriculture,
(3) Azam Business to generate income through small business, and
(4) Azam Service to generate income through services
(5) Insurance 1Azam by which about 500,000 members of poor households have been able to enjoy insurance protection since 2011 under Allianz Insurance
1Azam uses the poor families’ database from eKasih system. 1AZAM is being implemented in stages the pilot programme was initiated in the Iskandar Regional Development Authority (IRDA), Johor in January and it will be continued in the economic corridors of north, east, Sabah and Sarawak.
|Table-1. History of FELDA development and milestone|
|1956||The Land Development Ordinance 1956 came into force on 1 July and FELDA was established with a starting capital of RM10 million.|
|1971||FELDA embarked on its first joint venture with Perlis Plantation Berhad (PPB) to establish Kilang Gula Felda Perlis Sendirian Berhad (KGFP), a sugar milling and refining facility.|
|1978||Formation of Agricultural Services Corporation (now Felda Agricultural Services Sdn Bhd) to produce planting stock for oil palm.|
|1980||FELDA established an investment co-operative (Koperasi Permodalan Felda or KPF) to provide settlers and FELDA employees opportunities to invest in FELDA companies.|
|1985||Felda Rubber Corporation Industries (now Felda Rubber Industries Sdn Bhd) was set up to operate rubber processing factories and produce latex concentrate and rubber.|
|1990||FELDA is entrusted with their own financial standing and a statutory body because it can generate its own revenue through a variety of business|
|1992||Commercial planting operations began under FELDA PLANTATIONS SDN BHD.|
|1995||FELDA HOLDINGS SDN BHD (now Felda Holdings Bhd or FHB) was set up as FELDA’s commercial arm. All Felda companies and corporations became subsidiaries under FHB.|
|2004||FELDA commissioned the Sahabat biomass power plant in Lahad Datu, Sabah – the first Clean Development Mechanism (CDM) project in the world that runs entirely on empty fruit bunches (EFB).|
|2007||FELDA incorporated Felda Global Ventures Holdings Sdn Bhd (FGV) to operate as a commercial arm for FELDA’s overseas investments in upstream and downstream palm oil businesses.|
|2008||FGV acquired FELDA’s investments in North America including Twin Rivers Technologies Holdings Inc. (TRT Holdings).|
|2009||FGV acquires 50% equity interest in FELDA IFFCO SDN BHD (a joint venture with IFFCO Holdings Ltd) and TRURICH RESOURCES SDN BHD (a joint venture with Tabung Haji).|
|2010||The Felda Group became the world’s first smallholder organisation to attain the Roundtable on Sustainable Palm Oil (RSPO) Certification.|
|2011||MSM Malaysia Holdings Berhad, a subsidiary of FGV, was listed on the Main Market of Bursa Malaysia Securities Bhd. The exercise raised RM796 million.
First of a New Generation Licensing Felda for Aircraft Maintenance Engineering (LAME).
|2012||On 28 June, FGV was listed on Bursa Malaysia. The initial public offering, which was the world’s third largest in 2012, raised RM10.4 billion. Official opening up a new 50-storey - Felda Tower located in downtown Kuala Lumpur, Malaysia.|
|2013||FGV Cambridge Nanosystems Limited (FGV CNS) produces high grade Carbon Nanotube and Graphene. Ties were formed with Lipid Venture Sdn Bhd to produce and market tocotrienol (Vitamin E).
The model for a new generation of Felda - Touch Love
The establishment of new business arm, Felda Investment Corporation (FIC).
|2014||FGV was the recipient of 2014 Frost & Sullivan Malaysia Palm Oil Plantation Company of the Year for the second consecutive year.|
Federal Land Development Authority or FELDA was established on July 1, 1956 under the Land Development Ordinance. FELDA functions under the Act by:
FELDA is a flagship programme for government assisted poverty eradication through land use changes involving mainly the cultivation of oil palm and rubber and promoting industrial and socio-economic progress and is a replicated best practice.
Since 1990, FELDA is no longer recruiting new settlers. Started as a government supported programme, FELDA has diversified into a number of private corporate entities, particularly to ensure that the complete value chain of its core activities is promoted. Among the largest is the cooperative capitalization Felda (Felda Cooperative), Felda Global Ventures (FGV) and Felda Investment Corporation (FIC). FELDA’s focus is to become an 'Economic Powerhouse' in generating activities through the structured programme with a wide range of human capital potential. The history of FELDA development and milestone is summarised in table 1.
4.4. 1Malaysia Concept
At the heart of the 1Malaysia concept is the recognition of the importance of national unity irrespective of race or religious belief. Malaysia’s diversity is what makes it unique, but in order to fully benefit from what is undoubtedly a source of strength the nation needs to come together and build upon common values. That is the central goal of 1Malaysia, but it is much more than just an abstract ideology, by delivering real improvements on the ground. More than 1.5 million people have so far passed through the 1Malaysia health clinics, for example, receiving treatment for any condition for just one ringgit. Other focused programmes include Kedai Rakyat 1Malaysia (low-cost grocery stores), PR1MA, KAR1SMA, and AS 1Malaysia and etc. (Figure 3).
4.4.1. Kedai Rakyat 1 Malaysia
‘Kedai Rakyat 1 Malaysia’ is a system of shops operating on a mini market format, which provides various basic necessities at low prices. This initiative was inspired by Prime Minister YAB Dato’ Sri Najib Tun Razak for the low income citizens located in the urban areas. This is also in line with the slogan “Rakyat Didahulukan” which means, ‘People First’. The existence of ‘Kedai Rakyat 1 Malaysia’ will also act as the medium for the Government to control prices and lessen the monopolization of products which has long been dominated by the multinational manufacturers. As such, the multinational companies will be constrained from imposing price hikes without due justification. ‘Kedai Rakyat 1 Malaysia’ will serve the same consumer segment as hypermarkets do, but with emphasis on consumers with basic essential needs. Unlike other regular grocery shops, most of the items sold at ‘Kedai Rakyat 1 Malaysia’ such as rice, cooking oil, milk powder and diapers are packed with the logo of ‘Kedai Rakyat 1 Malaysia’. Currently, the assortments total almost 250 ‘Kedai Rakyat 1 Malaysia’ grocery items and the list will increase over time.
1Malaysia Housing Programme Corporation will be set up to plan and coordinate projects under the 1Malaysia People’s Housing Scheme (PR1MA) throughout the nation. Amongst others, the corporation will be responsible for distribution of houses under the projects to eligible recipients. An Act governing the new corporation was being formulated and would be tabled in parliament soon and the new policy will provide a wider opportunity for Malaysians to own houses and assure them of a better future. PR1MA programmes are in line with the concept of 1Malaysia, ‘People First, Performance Now’.
KAR1SMA stands for Kebajikan Rakyat 1Malaysia. Children, senior citizens, the disabled (OKU), police and army widows, and the community can benefit from KAR1SMA. The programme’s focus is to build the people through a holistic social assistance programme.
4.4.4. AS 1Malaysia
Amanah Saham 1Malaysia (AS 1Malaysia) is a fund-based initiative launched on August 5, 2009. The AS 1Malaysia investment objective is to seek opportunities that generate sustainable income while preserving capital investment unit holders in the long term through a diversified investment portfolio. Figure 3 shows the various components of this initiative.
|Figure-3. 1 Malaysia Concept|
The Malaysian government has established the “Performance Management and Delivery Unit” (PEMANDU) under the Prime Minister’s Department in 2009 to supervise the execution, review the progress, assist as well as sustain the delivery and drive the progress of Government Transformation Programme (GTP) and Economic Transformation Programme (ETP). This is an extension of the NEP introduced and implemented in 1970 to 1990. The objectives of GTP to transform the government to be more effective in its delivery services and accountable for outcomes for society; the moves to achieve Vision 2020 that is for Malaysia to become a fully developed nation and for ETP to transform Malaysia into a high-income nation by 2020 (Chua, 2011) are monitored and evaluated by PEMANDU
The following section provides a snapshot of Malaysia’s achievements in poverty reduction resulting from the various policies and on-the-ground implementation initiatives.
Malaysia is actually a showcase for raising living standards: the country reduced its poverty rate from 49.3% in 1970 to 17% in 1990 to 3.9% in 2008 and only 1.7% in 2012 - a decrease of nearly 97%. Hard core poverty has virtually been eradicated by 2010. Overall poverty incidence declined from 49.3% (1970) to 1.7% (2012); urban poverty from 21.3% (1970) to 1.1% (2012); rural poverty from 58.7% (1970) to 3.4% (2012). Average household income was increased from RM264 (1970) to RM5,000 (2012) and the MDG target (1990 - 16.5%) to halve the overall poverty rate by 2015 – achieved in 2000 (8.5%). In aggregate terms, Malaysia is ahead of the 2015 deadline on all goals when it comes to MDG achievements (Ashri, 2005; Ambassador, 2012; Datuk, 2013; Raja and Zaib, 2013) .
5.1. eKasih and 1Azam results
|Table-2. Breakdown numbers of participant involved in 1Azam, 2011-2013|
|AZAM Business and AZAM Service||Ministry of Women, Family and Community||15,241|
|Agro AZAM||Ministry of Agriculture and Agro-based Industry||7,590|
|AZAM Business and AZAM Service||Ikhtiar Malaysia||12,578|
|AZAM Work||Ministry of Human Resource||4,365|
|AZAM Sabah||State Government||12,067|
|AZAM Sarawak||State Government||11,306|
|(Source: Rohayu et al, 2011; Ambassador, 2012; Raja and Zaib, 2013)|
Achievement in 2012 Included(Ambassador, 2012):
- 29,699 under the Ministry of Women, Family and Community Development,
- 14,175 under Ikhtiar Malaysia (AIM),
- 13.866 in the Ministry of Agro-Based Industry (MOA),
- 9,490 in the Ministry of Human Resources (MOHR) and
- 18, 080 for Sarawak people
Achievement in 2013 Included (Raja and Zaib, 2013):
Achievement in 2014 Included:
5.2. FELDA Results
Another achievement is the rural development programme which remains as one of Malaysia’s biggest success stories. The rural development scheme implemented by FELDA has successfully elevated the quality of life and brought social and economic benefits to hundreds of thousands of rural families and increased their household income over the years. In 2014 plan, FELDA will implement and complete 20,000 units of new generation housing projects for a period of five years on 5,000 acres of land in FELDA areas at a cost of approximately USD 469 million (RM1.5 billion). FELDA was also spend approximately USD 31 million (RM100 million) a year for education and skills training programmes, as well as providing scholarships for 5,000 new generation children from which 30% or 2,000 people are children outside the FELDA scheme. Today, the Felda group operates as a partnership between three entities, namely Felda, Felda Investment Cooperative and Felda Holdings Berhad (FHB) which is being restructured into a new entity called Felda Global Ventures. This will spearhead the group’s drive to be a globally integrated and diversified multi‐crop agribusiness MNC. The original Felda remains as a government body responsible for the continuous improvement of the economic well‐being of the settler communities. Through the Felda Investment Cooperative (FIC) or Koperasi Permodalan Felda (KPF) which is managed by a board comprising both Felda staff and settler leaders, settlers and staff savings are channelled into investment projects mainly related to palm oil. It is hoped that dividends declared by FIC will provide a source of non‐farm income to supplement settlers’ income derived from their agricultural holdings. The Felda group is FHB which being restructured into Felda Global Ventures. FIC is currently the 51% shareholder of FHB. Malaysia believes that for so long as the government and the staff and settlers themselves remain as major stakeholders in Felda’s projects, it will have a better chance of success than if the stakeholders were private entities.
Malaysia has experienced rapid and sustained growth rates, successfully reduced incidence of poverty and achieved marked progress in meeting targets for the restructuring of society during the last three decades. These achievements are the results of the major development policies, such as NEP, NDP, NVP and NEM and the bold Vision 2020 adopted since 1970 (Madeline, 2003). Rapid expansion of the economy, contributed significantly to poverty reduction by creating employment opportunities which resulted large improvements in the living standards across all ethnic groups. However, rapid growth alone would not have been able to reduce poverty without the strong government emphasis on distributing the gains of development across all the sectors of the economy.
Malaysia’s government included elimination of poverty as an integral component of major policies signifying the importance attached to it. Two broad types of strategies were adopted in reducing incidence of poverty: expansion of the economy and government run affirmative action programmes targeted to the poor. The government emphasis on human resource development paved the way for the poor to acquire necessary skills and qualifications to gain employment in the expanding modern, high wage sectors of the economy which cause the shift of large number of workers out of the traditionally low paid rural occupations into better paid modern sector employment and uplifted them out of the poverty. This ensured that there is no intergenerational transfer of poverty. Attention was also paid to improving the quality of life of the poor through the upgrading or expansion of public services, social amenities and physical infrastructure (Mohamed and Arifin, 2012). Apart from providing opportunities for the poor to become involved in the expanding economy, government targeted programmes identified sub groups among the poor such as the hard core poor, female headed families, elderly people, the handicapped and indigenous groups which have unique problems that need to be dealt with differently. Government policies also tried to make sure that the benefits of development be equally distributed among all the groups to ensure social harmony in the plural society. The major factors that contributed to the success of Malaysian economy include the outward oriented policy stance, stable political climate, firm commitment of the leaders and well balanced macroeconomic management (Kumaran, 2013). All these factors helped the economy to take full advantage of the opportunities arising from the globalization of the world economy.
Malaysia strongly believes that the successful implementation of poverty eradication and development programmes are underpinned by political stability, inclusiveness and strong political will. Malaysia has taken concrete measures to leverage on its unique diversity as a source of strength in reducing poverty and strengthening the economy to achieve a sustained, inclusive and equitable economic growth. However, regional and international stability is also crucial in supporting national growth. Malaysia will continue to share its development experience in the field of poverty eradication with fellow developing countries both at the regional and global levels, with a view of accelerating the achievement of off-track MDGs by 2015 (Raja and Zaib, 2013). In conclusion, poverty is a multi-dimensional phenomenon that extends beyond income poverty and poverty eradication should remain at the centre of transformative development agendas for all times.
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