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How To Break Out Of The Poverty Cycle

poverty malaysia

Whilst Malaysia is moving towards becoming a developed nation, there are still 405,441 households that are living in poverty. In 2019, the national poverty line was increased from RM980 to RM2,208 per month[1]. Despite that, there are also those that are making more than this and are living in absolute poverty. Absolute poverty can be defined as the state in which a subject lacks the means to meet his or her basic needs[2]. Because poverty is such a fluid topic, it is not easy to categorize people into “poor” and “rich” boundaries. There is no such thing as a one size fits all. The same can be said for efforts to eradicate poverty altogether. 

the multidimensional poverty index

Fundamentally, poverty reduction is about bringing growth processes to poor areas. Since there is no one location or demographic consistent with the occurrence of poverty in Malaysia, efforts cannot be focused on one region. Generally, when discussing “how can we help the poor, not be poor anymore?” the most common thing that come to mind are government aids, cash  handouts, and job creation. Although these are solutions, they are dependent on others. The first two being short term solutions, and the third is often deemed difficult to do. 

cause and effects of poverty

We discuss five possible ways that the poor can break from the poverty cycle. 

#1 Educate And/Or Upskill

“Did you know: Based on the salaries and wages survey report 2019, graduates of tertiary education recorded the highest median and mean monthly salaries [2].”

Time and time again the importance of completing your education is mentioned. Even those that have finished their education, should never miss out on opportunities to improve their skills. By constantly improving your skill sets, it also increases your employability. To ease the financial strain of these programmes, the government has included RM1 Billion solely for reskilling and upskilling activities, ranging from Veteran Training to RM3,000 voucher for fresh graduates to obtain professional certifications in the KPT-PACE programme[4]. We never know which one of our skills will help us to get work, so these educational opportunities will help them in the long term. 

#2 Know your entitlements

“Did you know: Over 9.86 million Malaysians (7 million B40 recipients and 2.86 million M40 recipients) have received payments totalling RM4.5 billion under Phase One of the Bantuan Prihatin Nasional 2.0 (BPN 2.0). [3]

Whilst 2020 was so unpredictable, one silver lining is that many of the government schemes and financial aids were constantly being announced on national television. Thanks to this the Malaysian people all stepped up and signed up for BSH, BPN to ensure they receive their monetary aid. This level of awareness has assisted those in need and allowed them to make ends meet. Malaysia has also several long term aids that are focused on helping the B40 community. 

In the latest 2021 budget release, Finance Minister Tengku Zafrul Abdul Aziz has announced that the government will increase the monthly rate of financial assistance for vulnerable groups [4]. There are also various disaster contributions; help for NGOs; one-off eWallet payouts to students; OKU aids; and many more. 

Source: Infografik Belanjawan 2021

#3 Move with the times & Keeping up with Tech

“Did you know: More than 26 million Malaysians use the internet today, and data from GlobalWebIndex shows that 80% of users between the ages of 16 and 64 are already shopping online [5].”

Data from Statista’s Digital Market Outlook survey shows that Malaysians spent more than US$6 billion online in 2018, with purchases of consumer goods already outweighing spend on travel [5]. Especially with the country undergoing lockdowns, many small business owners have taken to moving their business online and have succeeded in generating profits. Using online platforms such as Instagram, Shoppee, Lazada, etc was such a success last year, that several post carriers were having trouble keeping up. Check out some of the popular categories of business. 

ecommerce spend in Malaysia
Source: Hootsuite/We Are Social

Even if you don’t have a business to be shifted to an online platform, who’s to say you cannot make it big on the internet. Careers as Youtubes, Social Media influencers, and even freelance jobs are for anyone and everyone willing to commit the time and effort towards content creation. Several success stories started with people using their phones. Your imagination is the key, and let’s be honest, no one knows what’s the next thing that will go viral. Might be you. 

#4 Save Early. 

No, you don’t have to wait till you have RM1,000 spare and then start your savings. Savings nowadays can start with as little as RM10. Of course, there are different methods to set aside funds for a rainy day but over time this money will accumulate. Even going as far to set aside RM5 per week, gets you to RM260 at the end of the year. KWSP’s sole purpose is to set aside funds for an easy retirement, as it’s usually deducted automatically from the employee paycheck, it is one of the most ideal forms of savings. It is important to remember that savings should not be touched unless there is an emergency. One would be surprised at just how many dip into this retirement fund, before reaching the age of pension, causing problems later on. 

For those who want to take it a step further, they can invest their money. ASB loans can be made with monthly payments as low as RM50. Mobile apps that channel your loose change into investments, such as Raiz and Wahed invest are also available. 

#5 Speak up! 

You’d be surprised at how much voicing out your problems may help in changing your current situation. In a world where everyone is looking out for themselves, it may be challenging to speak up and admit to the struggles that we are facing. But not all struggles have to be shouldered alone. Each and every one of us needs a little help sometimes. Be it from friends, from family, or sometimes a kind stranger. Rather than refusing aid, pay it forward when you see others also struggling. One small act of kindness, regardless of the form, can help even the most desperate of us. 

Ok! So those are just a few ideas of  “how to get out of poverty” trends. For those that are not experiencing poverty themselves, are more than welcome to lend a hand. Majority of those that are living in poverty are unable to break the cycle on their own. To help out those in need you can:

  • Support a local business (check our changemakers map)
  • Join volunteer programmes that reach out to poor communities
  • Donate clothes
  • Don’t waste food/ Donate 
How to break out from the poverty cycle

Disclaimer: The above content is based on successful trends Wiki Impact has identified, as well as previously published suggestions on how to get out of poverty. Wiki Impact does not claim that these are sure-fire ways to get out of poverty. 

Explore our Sources:

  1. I. Lim., (2020). Statistics Dept: Malaysia’s new poverty line income is RM2,208, over 400k households considered poor. Link
  2. Department of Statistics Malaysia., (2020), Salaries & Wages Survey Report, Malaysia, 2019. Link
  3. Malaymail., (2020), Finance Ministry: Phase One of BPN 2.0 payments disbursed to 9.86 million B40, M40 recipients. Link
  4. Infografik Belanjawan 2021. Link
  5. S. Kemp & S. Moey., (2019), DIGITAL 2019 SPOTLIGHT: E-COMMERCE IN MALAYSIA. Link

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