Poverty in China refers to people whose income is less than a poverty line of $1.25 per day (PPP) set by the World Bank benchmark. Poverty has affected all aspects of China, including the environment, health, education, housing, nutrition, and agriculture. It has disrupted families and communities, and sent millions from the poorer regions to the cities in a desperate search for work.The People's Republic of China is the third largest country in the world and home to more than 1.3 billion people. It is an immense expanse that includes vast seacoasts, fertile plains and valleys, rugged mountains and windswept deserts.
In rural areas, as a result of rapid growth in agricultural production and income, absolute poverty declined dramatically from 1978 to 1984, from 262 million (around one-third of rural households) to 88 million people (around one-tenth). Poverty remained relatively constant during 1985-93, fluctuating between 11 percent and 16 percent according to World Bank estimates. (The author's calculations show a fluctuation of between 10 percent and 18 percent.) The failure to further reduce poverty was the result of stagnating grain production.
Urban income has grown rapidly since reforms started in 1984. Between 1984 and 1993 the average household member's real income almost doubled, increasing by 81 percent, with an average annual growth rate of 7.5 percent. Thus the average household was able to share the benefits of China's rapid economic growth. Absolute poverty is extremely low in urban areas, partly because the subsistence level is relatively low and partly because urban dwellers earn relatively high wages and receive food subsidies. Between 1978 and 1993 only a few years were registered in which the shares of urban households living below the absolute poverty line exceeded 1 percent. Between 1990 and 1993 the rate of absolute poverty in urban areas fell below 0.1 percent. The level of relative poverty is also very low, at less than 3 percent of urban households. (Relative poverty is defined as 50 percent of the urban national mean income.) But relative poverty is growing.
Causes
China's vastness and diversity encompass a broad range of the problems and challenges facing small farmers and pastoralists throughout the developing world. Population pressure strains the productive capacity of the 10 per cent of the land area that is suitable for sustained cultivation. An increasing number of livestock compete for fodder on fragile rangelands. Flood-prone areas and deteriorating irrigation systems result in water logging and salinization. Encroaching deserts threaten formerly productive land. Climate change has emerged as the main reason for poverty in China as over 95 percent of the poor live in ecologically fragile areas and are the most affected by the changing patterns. As there are many unexpected natural disaster in the area like earthquakes, crops are destroyed. This caused farmer in these areas to be unable to produce a sufficient amount of crops in order to feed their families.
Another factor is the unfavorable treatment by the central government for the rural residents as compared with the urban residents. The government has spent less on infrastructure investment in rural areas than in urban areas. It invested only a limited amount to improve agricultural productivity. It also provided less welfare benefits including healthcare and education subsidies to rural residents. Although much labor mobility was allowed for the farmers to move to urban areas to find work, those working in the urban areas are subject to the discrimination under the government policy of separating the residence status and thus entitled benefits of the urban and rural populations. The migrating workers do not have residence permits in the cities and cannot receive the services provided such as healthcare and schooling for their children. Procurement of farm products by government agencies has continued and the procurement prices were often set below market prices. Farmers were also not allowed to sell their products to private trades as private trading was prohibited. Therefore the farmers cannot earn enough money to support their families, which shows the causes of the poverty in China.
Solutions
The efforts of China's government to stimulate economic growth have focused largely on boosting the productivity of the country’s enormous rural population by adopting a series of economic reforms that have guided China’s transition from a planned to a market-oriented economy. In the late 1970s, the government introduced the household responsibility system (HRS), which was a major shift away from a collective system towards one in which individual households had greater control and decision-making powers over the land and other resources they used. As a result, productivity surged.
At the same time, the government gradually relaxed its control over markets and prices, setting off a boom in township and village enterprises in rural areas. Meanwhile, the government sustained the opening up of the trade and investment sectors to the global economy to boost exports and foreign investment. As a result of these policy shifts, China has been undergoing continuous economic growth since 1978. By 2008 per capita income had increased sixfold, and the number of people living in absolute poverty, according to national poverty line criteria, had decreased from about 260 million to about 14 million.
Done by: Collin Cheong, Xin Qiong Xi, Chen Rong Hao, Tan Herh Kai, Tjai Leon 10S19
Showing posts with label poverty. Show all posts
Showing posts with label poverty. Show all posts
Poverty reduction in China by 10S07 (Hao Nan)
China has maintained a high growth rate for more than 30 years since the beginning of economic reform in 1978, and this sustained growth has generated a huge increase in average living standards. China had many characteristics in common with the rest of developing Asia 25 years ago: large population, low per capita income, and resource scarcity on a per capita basis. In the 15 years from 1990-2005, China averaged per capita growth of 8.7%.
The whole reform program is often referred to in brief as the open door policy". This highlights that a key component of Chinese reform has been trade liberalization and opening up to foreign direct investment, but not opening the capital account more generally to portfolio flows. China improved its human capital, opened up to foreign trade and investment, and created a better investment climate for the private sector.
After joining the WTO China’s average tariffs have dropped below 10%, and to around 5% for manufactured imports. It initially welcomed foreign investment into special economic zones", but it is important to note that some of these were very large, amounting to urban areas of 20 million people or more. The positive impact of foreign investment in these locations led to a more general opening up of the economy to foreign investment, with the result that China has become the largest recipient of direct investment flows in recent years. The opening up measures have been accompanied by improvements in the investment climate. Particularly in the coastal areas have cities developed their investment climates. In these cities the private sector accounts for 90% or more of manufacturing assets and production. In 2005 average pretax rate of return for domestic private firms was the same as that for foreign-invested firms. Local governments in coastal cities have lowered loss of output due to unreliable power supply to 1.0% and customs clearance time for imports has been lowered in Chinese cities to 3.2 days. China’s sustained growth fueled historically unprecedented poverty reduction. The World Bank uses a poverty line based on household real consumption (including consumption of own-produced crops and other goods), set at $1 per day measured at . In most low-income countries this amount is sufficient to guarantee each person about 2000 of nutrition per day, plus other basic necessities. In 2007, this line corresponds to about 900 RMB per year. Based on household surveys, the poverty rate in China in 1981 was 64% of the population. This rate declined to 10% in 2004, indicating that about 500 million people have climbed out of poverty during this period. This poverty reduction has occurred in waves. The shift to the household responsibility system propelled a large increase in agricultural output, and poverty was cut in half over the short period from 1981 to 1987. From 1987 to 1993 poverty reduction stagnated, then resumed again. From 1996 to 2001 there was once more relatively little poverty reduction. Since China joined the WTO in 2001, however, poverty reduction resumed at a very rapid rate, and poverty was cut by a third in just three years
China has been the most rapidly growing economy in the world over the past 25 years. This growth has led to an extraordinary increase in real living standards and to an unprecedented decline in poverty. Between 1981 and 2005 it is estimated that the poverty rate fell from 85% to 15%, roughly 600 million people. However because of this, China faces serious and environmental degradation.It has also seen growing disparities of different kinds as people in different parts of the country and with different characteristics have benefited from the growth at different rates.
Starting from the pre-reform situation, some increase in locations benefited first from the opening policy and as the small stock of educated people found new opportunities, though particular features of Chinese policy may have exacerbated rather than mitigated growing disparities. The household registration (hukou) system kept rural-urban migration below what it otherwise would have been, and contributed to the development of one of the largest rural-urban income divides in the world. Weak over rural land also limited the ability of peasants to benefit from their primary asset.
Aside from income inequality, there has also been an increase in inequality of educational outcomes and health status, partly the result of China’s uniquely decentralized fiscal system, in which local government has been primarily responsible for funding basic health and education. Poor localities have not been able to fund these services, and poor households have not been able to afford the high private cost of basic education and healthcare.
The large trade surplus that has emerged in China have exacerbated the inequalities and makes them harder to address. The trade surplus stimulates the urban manufacturing sector, which is already relatively well off. It limits the government’s scope to increase funding for public services such as rural health and education. The government has been trying to rebalance China’s production away from investment and exports and toward domestic consumption and services to improve the country’s long-term macroeconomic health and the situation of the relative poor in China.
Recent government measures to reduce disparities including relaxation of the hukou system, abolition of the agricultural tax, and increased central transfers to fund health and education in rural areas.
In conclusion, China's poverty reduction techniques come at a price and she has to be able to cope with the arising challenges and issues.
The whole reform program is often referred to in brief as the open door policy". This highlights that a key component of Chinese reform has been trade liberalization and opening up to foreign direct investment, but not opening the capital account more generally to portfolio flows. China improved its human capital, opened up to foreign trade and investment, and created a better investment climate for the private sector.
After joining the WTO China’s average tariffs have dropped below 10%, and to around 5% for manufactured imports. It initially welcomed foreign investment into special economic zones", but it is important to note that some of these were very large, amounting to urban areas of 20 million people or more. The positive impact of foreign investment in these locations led to a more general opening up of the economy to foreign investment, with the result that China has become the largest recipient of direct investment flows in recent years. The opening up measures have been accompanied by improvements in the investment climate. Particularly in the coastal areas have cities developed their investment climates. In these cities the private sector accounts for 90% or more of manufacturing assets and production. In 2005 average pretax rate of return for domestic private firms was the same as that for foreign-invested firms. Local governments in coastal cities have lowered loss of output due to unreliable power supply to 1.0% and customs clearance time for imports has been lowered in Chinese cities to 3.2 days. China’s sustained growth fueled historically unprecedented poverty reduction. The World Bank uses a poverty line based on household real consumption (including consumption of own-produced crops and other goods), set at $1 per day measured at . In most low-income countries this amount is sufficient to guarantee each person about 2000 of nutrition per day, plus other basic necessities. In 2007, this line corresponds to about 900 RMB per year. Based on household surveys, the poverty rate in China in 1981 was 64% of the population. This rate declined to 10% in 2004, indicating that about 500 million people have climbed out of poverty during this period. This poverty reduction has occurred in waves. The shift to the household responsibility system propelled a large increase in agricultural output, and poverty was cut in half over the short period from 1981 to 1987. From 1987 to 1993 poverty reduction stagnated, then resumed again. From 1996 to 2001 there was once more relatively little poverty reduction. Since China joined the WTO in 2001, however, poverty reduction resumed at a very rapid rate, and poverty was cut by a third in just three years
China has been the most rapidly growing economy in the world over the past 25 years. This growth has led to an extraordinary increase in real living standards and to an unprecedented decline in poverty. Between 1981 and 2005 it is estimated that the poverty rate fell from 85% to 15%, roughly 600 million people. However because of this, China faces serious and environmental degradation.It has also seen growing disparities of different kinds as people in different parts of the country and with different characteristics have benefited from the growth at different rates.
Starting from the pre-reform situation, some increase in locations benefited first from the opening policy and as the small stock of educated people found new opportunities, though particular features of Chinese policy may have exacerbated rather than mitigated growing disparities. The household registration (hukou) system kept rural-urban migration below what it otherwise would have been, and contributed to the development of one of the largest rural-urban income divides in the world. Weak over rural land also limited the ability of peasants to benefit from their primary asset.
Aside from income inequality, there has also been an increase in inequality of educational outcomes and health status, partly the result of China’s uniquely decentralized fiscal system, in which local government has been primarily responsible for funding basic health and education. Poor localities have not been able to fund these services, and poor households have not been able to afford the high private cost of basic education and healthcare.
The large trade surplus that has emerged in China have exacerbated the inequalities and makes them harder to address. The trade surplus stimulates the urban manufacturing sector, which is already relatively well off. It limits the government’s scope to increase funding for public services such as rural health and education. The government has been trying to rebalance China’s production away from investment and exports and toward domestic consumption and services to improve the country’s long-term macroeconomic health and the situation of the relative poor in China.
Recent government measures to reduce disparities including relaxation of the hukou system, abolition of the agricultural tax, and increased central transfers to fund health and education in rural areas.
In conclusion, China's poverty reduction techniques come at a price and she has to be able to cope with the arising challenges and issues.
poverty in Cambodia
Types of poverty:
1) healthcare
2) Finance
3) education
1) Cambodia has among the highest malnutrition rates in Asia. More than one-third of allCambodians eat less than the daily minimum food energy requirement off 2100 calories (Poverty ProfileExecutive Summary). A 2005 report of Maternal and Child Nutrition in Asia states that 45% of childrenunder five years of age are stunted and 15% are wasted due to malnutrition; 11% of infants are born withlow birth weight. The average diet in Cambodia, according to the Food and Agriculture Organization ofthe United Nations, consists of 78% starchy foods. Most children and adults in Cambodia eat two mealsper day consisting of rice and vegetables. Fish, the most common protein source, is eaten less than onceper day. Meat is reserved for celebrations. The Tonle Sap Lake provides approximately two-thirds of thefish consumed annually in Cambodia. Fish harvests, similar to rice harvests, fluctuate with rainfall.Record catches in 2004, reported by the Council for Agricultural and Rural Development, reflect bothhigher water levels on the Tonle Sap and a reduction in illegal fishing.
Health Statistics
% of population using improved drinking-water sources, 2006 total=65
% of population using improved drinking-water sources, 2006 urban=80
% of population using improved drinking-water sources, 2006 rural=61
% of population using improved sanitation facilities 2006 total=28
% of population using improved sanitation facilities 2006 urban=62
% of population using improved sanitation facilities 2006 rural=19
% of routine EPI vaccines financed by government 2008 total=41
GNI per capita (US$), 2008=600
GDP per capita average annual growth rate (%), 1970–1990= N.A
GDP per capita average annual growth rate (%), 1990–2008=6.3
Average annual rate of inflation (%), 1990–2008=4
% of population below international poverty line of US$1.25 per day, 1992–2007*=40
% of central government expenditure (1998–2007*) allocated to:, health= N.A
% of central government expenditure (1998–2007*) allocated to:, education= N.A
% of central government expenditure (1998–2007*) allocated to:, defence= N.A
Primary school enrolment ratio 2003–2008*, gross, male=124
Primary school enrolment ratio 2003–2008*, gross, female=115
Primary school enrolment ratio 2003–2008*, net, male=91
Primary school enrolment ratio 2003–2008*, net, female=87
Primary school attendance ratio 2003–2008*, net, male=84
Primary school attendance ratio 2003–2008*, net, female=86
Survival rate to last primary grade (%) 2003–2008*, admin. data=55
Survival rate to last primary grade (%) 2003–2008*, survey data=92
Secondary school enrolment ratio 2003–2008*, gross, male=46
Secondary school enrolment ratio 2003–2008*, gross, female=38
Secondary school enrolment ratio 2003–2008*, net, male=33
Secondary school enrolment ratio 2003–2008*, netm female=28
Secondary school attendance ratio 2003–2008*, net, male=29
Secondary school attendance ratio 2003–2008*, net, female=2
1) healthcare
2) Finance
3) education
HEALTHCARE
1) Cambodia has among the highest malnutrition rates in Asia. More than one-third of allCambodians eat less than the daily minimum food energy requirement off 2100 calories (Poverty ProfileExecutive Summary). A 2005 report of Maternal and Child Nutrition in Asia states that 45% of childrenunder five years of age are stunted and 15% are wasted due to malnutrition; 11% of infants are born withlow birth weight. The average diet in Cambodia, according to the Food and Agriculture Organization ofthe United Nations, consists of 78% starchy foods. Most children and adults in Cambodia eat two mealsper day consisting of rice and vegetables. Fish, the most common protein source, is eaten less than onceper day. Meat is reserved for celebrations. The Tonle Sap Lake provides approximately two-thirds of thefish consumed annually in Cambodia. Fish harvests, similar to rice harvests, fluctuate with rainfall.Record catches in 2004, reported by the Council for Agricultural and Rural Development, reflect bothhigher water levels on the Tonle Sap and a reduction in illegal fishing.
Health Statistics
% of population using improved drinking-water sources, 2006 total=65
% of population using improved drinking-water sources, 2006 urban=80
% of population using improved drinking-water sources, 2006 rural=61
% of population using improved sanitation facilities 2006 total=28
% of population using improved sanitation facilities 2006 urban=62
% of population using improved sanitation facilities 2006 rural=19
% of routine EPI vaccines financed by government 2008 total=41
Finance
According to research in 2006, Cambodia was “considered one of the poorest nations in the world, with a gross domestic product (GDP) per capita of around $US280 per year.”28 A more current report forecasts the GDP to be $US659 in 2008 and $US700 in 2009.29 However, the CIA World Fact Book projects the GDP per capita to be $US2,100.30 Poverty is widespread with about 66 percent of the population living on $US2 a day and almost half on $US1 a day.31
Cambodia is not immune from the global economic crisis. While the GDP is projected to grow
by less than 6 percent in 2009, last year brought about the closure of some 22 garment
factories resulting is a loss of 22,000 jobs pushing more people back into poverty. Cambodiawas ranked 135 out of 185 countries by World Bank with respect to its business climate
Cambodia is not immune from the global economic crisis. While the GDP is projected to grow
by less than 6 percent in 2009, last year brought about the closure of some 22 garment
factories resulting is a loss of 22,000 jobs pushing more people back into poverty. Cambodiawas ranked 135 out of 185 countries by World Bank with respect to its business climate
GNI per capita (US$), 2008=600
GDP per capita average annual growth rate (%), 1970–1990= N.A
GDP per capita average annual growth rate (%), 1990–2008=6.3
Average annual rate of inflation (%), 1990–2008=4
% of population below international poverty line of US$1.25 per day, 1992–2007*=40
% of central government expenditure (1998–2007*) allocated to:, health= N.A
% of central government expenditure (1998–2007*) allocated to:, education= N.A
% of central government expenditure (1998–2007*) allocated to:, defence= N.A
Education
Research has shown that the quality of higher education in Cambodia is considered “quite low
compared to international standards.” One source put the literacy rate in 1999 at 47.6percent for males and 29.2 percent for females with an average of 3.8 years of schooling.
compared to international standards.” One source put the literacy rate in 1999 at 47.6percent for males and 29.2 percent for females with an average of 3.8 years of schooling.
Educational statistics ( in number of people)
Youth (15–24 years) literacy rate, 2003–2007*, male=90
Youth (15–24 years) literacy rate, 2003–2007*, female=83
Number per 100 population , 2007, phones=18
Number per 100 population , 2007, Internet users=0
Youth (15–24 years) literacy rate, 2003–2007*, male=90
Youth (15–24 years) literacy rate, 2003–2007*, female=83
Number per 100 population , 2007, phones=18
Number per 100 population , 2007, Internet users=0
Primary school enrolment ratio 2003–2008*, gross, male=124
Primary school enrolment ratio 2003–2008*, gross, female=115
Primary school enrolment ratio 2003–2008*, net, male=91
Primary school enrolment ratio 2003–2008*, net, female=87
Primary school attendance ratio 2003–2008*, net, male=84
Primary school attendance ratio 2003–2008*, net, female=86
Survival rate to last primary grade (%) 2003–2008*, admin. data=55
Survival rate to last primary grade (%) 2003–2008*, survey data=92
Secondary school enrolment ratio 2003–2008*, gross, male=46
Secondary school enrolment ratio 2003–2008*, gross, female=38
Secondary school enrolment ratio 2003–2008*, net, male=33
Secondary school enrolment ratio 2003–2008*, netm female=28
Secondary school attendance ratio 2003–2008*, net, male=29
Secondary school attendance ratio 2003–2008*, net, female=2
http://www.unicef.org/infobycountry/cambodia_statistics.html
http://www.holiday-in-angkor-wat.com/poverty-in-cambodia.html
Causes for poverty
The Maoist government and its subsequent terrorism on the country held Cambodia to ransom and led to starvation, economic disaster and immense poverty in Cambodia. Thankfully the dark days of the Khmer Rouge are behind Cambodia and its people look towards a more hopeful future. Unfortunately, Cambodia still finds itself in economic dire straits, with the average annual wage only US$256. Corruption within the government has also been a major cause of poverty in Cambodia since the expulsion of the Khmer Rouge.Judged by the standard of the UN Human Development Report, Cambodia is among the poorest countries in the world: it ranks 121 out of 164 on the human development index. When you're there, this poverty rises up and slaps you squarely in the face, there is no avoiding it. You will be approached by children and adults selling all manner of things, while you sit and try to eat your lunch at a café. And you will be confronted by land mine victims who are missing limbs, blinded: or both. That is the sad reality of Cambodia.
Solutions
No one who comes to Cambodia remains unaffected by the troubling sights of beggars and people who are desperately poor. What makes it even harder to accept is that Cambodians deal with their struggles with incredible good humor and fortitude. The problem of poverty in Cambodia can be overwhelming and it can be difficult to know how to deal with the poverty you witness.
Most travelers can see their way clear to give a few coins to beggars, or shout a street urchin a free meal. It may also be helpful to locals, to pay a little above the odds for services and products, but still within the reasonable price range. These measures are kind and helpful, but some say that the best way to help ease poverty in Cambodia and to develop a deep sense of satisfaction as well as getting to experience more of the “real” Cambodia may be through volunteering or donations to reputable charities operating in Cambodia either before you come on vacation, during or after you return home.In Siem Reap it is also helpful to ensure that your hotel is locally run and the money you spend is going to the people who need it most desperately and not wealthy foreign entities. It pays to do a little research before you go.There is also a different school of thought about this whole business of helping the Cambodians. Since there are so many NGOs and charity organizations, some people say that these good intentioned people are not actually helping the people in the long run. To be so dependant on foreign aids may have a negative effect on the people's own sense of empowerment and in turn passively waiting for help and handouts
Done by, sanjeevan, ivan, sheng hao, alvin
Poverty in Cambodia
Cambodia is one of the poorer nations in the world. The 2008 listing places Cambodia at 131 out of 177 nations on the United Nations Development Programs Human Development Index based on figures for 2005. Poverty in Cambodia has largely resulted from high population growth, inadequate opportunities, low capabilities, insecurity, exclusion and vulnerability (NPRS 2003, CSD/RGC, 20 Dec 2002). Both income and broader human development indicators shows that Cambodia is among the poorest countries in the world. According to the UNDP Human Development Report (2001), Cambodia ranks 121 of 162 countries in the world on the human development index.
Cambodia is also a post-conflict country, where many of the foundations for growth and development – physical, social, human and economic – have been shattered and need to be restored. Only recently have some parts of the country become accessible as the security situation has increased. The government lacks sufficient resources – both human and capital – to provide adequate services in health, education and infrastructure. Private sector growth is limited by weak regulations and land and property rights, poor infrastructure and little access to credit. In addition to this, allegations of corruption are widespread – Cambodia ranks 162 in the world (out of 179) and 26 in the Asia Pacific region on Transparency International’s 2007 Corruption Perception Index.
36.8 per cent of the population lives below the poverty line (2005) and while poverty has moderately declined in the last decade (in 1994 the poverty rate was 39%), the majority of growth is occurring in Phnom Penh and other larger provincial towns. 90 per cent of the poor lives in rural areas and the highest rates of poverty are found in households where agriculture is the primary source of income. In 2004, Cambodia ranked 24 out of 108 countries on the UNDP Human Poverty Index (HPI), with a score of 38.6. Chad topped the list with a HPI of 56.9.
Who are Cambodia's poor rural people?
· The country's poor people include subsistence farmers, members of poor fishing communities, landless people and rural youth, as well as internally displaced persons and mine victims. Tribal peoples and women are generally the most disadvantaged.
· Women in particular do not have equal access to education, paid employment and land ownership and other property rights. For many women, reproductive health services are inadequate or non-existent. Many women had to assume the responsibility of heading their households after male family members were killed in conflict.
Where are they?
· Poverty rates are highest in upland areas. The poorest people live in the districts close to the borders with Thailand and the Lao People's Democratic Republic in the north and north-east, and with Viet Nam in the east. Poverty is less severe in the districts around Tonle Sap Lake and those in the Mekong River basin in the south.
· Cambodia's poorest people are isolated. They live in remote villages, far from basic social services and facilities. Many have to travel more than 5 km to reach a health clinic, and still others live more than 5 km from the nearest road.
Why are they poor?
· The pressures of a fast-growing population contribute to poverty. Because of a lack of education and skills training, people have inadequate employment opportunities and low capabilities. They are insecure, excluded and vulnerable. They have limited access to natural resources. Poor health, lack of education, poor infrastructure and low productivity lead to deeper poverty. The cycle of poverty, ill health and high health care expenditure cripples poor Cambodian families economically.
· Rural poverty and lack of opportunity in rural areas have contributed to the spread of HIV AIDS, as young women migrate to urban factories and become sex workers in neighbouring countries. Although HIV prevalence rates have shown a decrease, the impact of the infection continues to be strong.
Social
Cambodia's social indicators are amongst the lowest in Asia. Life expectancy at birth is 58 years. In 2005 the infant mortality rate (per 1 000 live births) was 143 and the prevalence of HIV in the adult population was 1.6% (estimated 0.9 – 2.3%). The adult literacy rate (aged 15 and older) is 73.6%. The population of Cambodia is estimated at 14 million in 2005, the next census being conducted in 2008. The population is estimated to be growing at a rate of 1.8% at 2005, the second highest growth rate in ASEAN (Association of Southeast Asian Nations) countries. Cambodia also has a young population – in 2005 37.1% of the population was under the age of 15. (The above figures are quoted from UNDP Human Development Report 2007/2008).
Prolonged civil war, internal displacement and other social and economic factors have resulted in almost 20% of households headed by women. Women are generally in a disadvantaged position in both family and society. The poverty rate for female-headed households is 48%.
Cambodia's most vulnerable groups include internally displaced persons, returned refugees, war widows, orphans, street children, squatters, ethnic minorities and people with disabilities. Poor health is a major cause of impoverishment and other forms of social deprivation.
Rural - Urban Bias in Cambodia
Of the total number of the poor, more than 90 percent live in the rural areas. This implies that Cambodia’s poverty is rooted in its large agricultural sector, which has low productivity and low growth, but provides livelihood to the vast majority of the country’s population. As well as living in rural areas, the poor tend to have low levels of education and limited access to land and other productive assets. This results in households depending on low paying manual employment (e.g. daily labour).
In both urban and rural areas, the poor have less access to modern amenities and services. They reside in houses of inferior quality with no or limited access to basic services. The poor are more likely to reside in households with larger membership sizes, have more children, and have a household head that is less educated. They also have much less access to public services.
Rural poverty probably has declined at a much slower rate than poverty in Phnom Penh or other urban areas (UNDP, 2007). The significant fall in poverty in the bigger cities has been due to strong urban bias in growth and concentration of public investment. Cambodia’s economic success has been a largely urban phenomenon with the primary drivers – garments, tourism and construction – having few linkages with the majority of the population, who depend on agriculture as the main source of livelihood. Figure 3.9 and 3.10 compares poverty in Phnom Penh and in rural areas of Cambodia. Though poverty in Phnom Penh has decreased more than 50 percent in the period 1994 - 2004, rural poverty rates as seen no similar improvement.
Poverty in Vietnam
Urban Poverty in Vietnam
WHY ARE THEY POOR?
1. The incomes of many people living at subsistence or just above subsistence level have not kept pace with inflation; in fact they have had to work even harder to earn the same amount while getting less of the essential goods they need.
2. The increasing gap between the rich and the poor, a constant feature over the last two decades, has also been a factor in increasing urban poverty. As more people in rural areas lose their land and other sources of income, they are forced to hire their labour out in urban areas.
Poverty in Malaysia
Malaysia - Poverty and wealth
Malaysia experienced extraordinary economic growth during the last 3 decades, which brought prosperity and higher standards of living to the majority of the people. One of the most important achievements in Malaysia has been the elimination of extreme poverty and hunger. The urban areas—especially the capital Kuala Lumpur, and major tourist destinations and industrial cities such as George Town, Malacca, and Petaling Jaya— enjoy a quality of living very similar to that in developed countries. The major cities have first-class shopping centers, condominiums with air-conditioning and swimming pools, expensive private schools, and elite clubs. The rural population, meanwhile, often lives in traditional wooden houses in kampungs (villages) with limited facilities.
The monthly gross household income nearly doubled from MR1,167 in 1990 to MR2,007 in 1995. There has emerged a fairly strong middle class. However, incomes are still distributed unevenly. For instance, the wealthiest 20 percent of Malaysians control 53.8 percent of the wealth, while the poorest 60 percent of the population controls just 21.3 percent of wealth. At the very bottom of the income range, the poorest 20 percent of the population controls only 4.5 percent of wealth. Disparities exist along both geographic and ethnic lines. In general, the Chinese population, which has traditionally lived in urban areas and been involved in small and medium-sized businesses or employed in various industries, has had higher incomes than the Malays, who often live in small towns and villages and were traditionally engaged in agriculture. Secondly, there are considerable differences in standards of living, incomes, and access to medical and other social benefits in different parts of the country. Peninsular Malaysia, where the majority of the population lives, has much higher standards of living compared to East Malaysia.
Since 1970, the Malaysian government has actively implemented social policies aimed at the elimination of poverty and social inequality, and the development of a social welfare system . The communal unrest of 1969 prompted the Malaysian government to introduce the New Economic Policy (NEP). This 20-year program established state support of poor communities and access to education and social benefits for Malays and indigenous people (the Bumiputera ). This latter aspect included the establishment of privileged access to public services, the granting of land rights, preference in education and training, and job quotas in the public sector. In the 1980s, Malaysia's leadership envisioned the formation of the Malay Baru (New Malays), a better-educated, politically and socially active people able to live in harmony with other communities. In the early 1990s the government relaxed some privileges and reduced some quotas for Bumiputera, making the social welfare system more inclusive and accessible to a wider range of people than it had been before.
The recent economic turbulence of 1997 and 1998 brought higher unemployment, higher prices, and lower incomes. This particularly affected the most vulnerable social groups of society, not only in rural areas, but also in major urban centers. Nevertheless, there were no large groups of people migrating from the country, and Malaysia's quality of life remained much better than in neighboring Indonesia, the Philippines, or Thailand. Around 6.8 percent of the population lived below the poverty line in 1997, most of them in East Malaysia (for comparison, in the neighboring Philippines 32 percent of the population lived below the poverty line in 1997). The economic recovery of 1999 and 2000 reversed the decline in incomes and standards of living.
Poverty in Malaysia
Anti-poverty moves: Old wine, new bottles?
KUALA LUMPUR - With Malaysia's impressive track record in economic development over the past 30 years, and the constant push to modernize the country, it would seem that the problem of poverty would feature less prominently on politicians' agendas here. But this is not the case for the newly minted prime minister, Abdullah Ahmad Badawi. Soon after assuming office, he declared an ambitious plan to eradicate hardcore poverty within five years.
Malaysia's record in reducing poverty is impressive even on an international scale - so impressive that global agencies such as the World Bank and the United Nations have showered it with accolades. The government is currently documenting its success in a report to the UN on its efforts toward achieving the Millennium Development Goals - a UN blueprint, which among others things, aims to reduce poverty worldwide by half by 2015.
As a model country, Malaysia has much to share. After racial riots in 1969 triggered by dissatisfaction among the Bumiputra population (mainly Malays but also including indigenous people) who worried about losing their political influence to the economically strong Chinese, the government launched the ambitious New Economic Policy (NEP) in 1970, an affirmative action plan designed to give poor Malays a greater share of the country's future wealth. This "growth by equity" policy represented an active commitment to combat poverty, particularly among the Malays, who made up the majority of the poor, and to ensure economic growth that would benefit all.
Despite the controversy, the NEP was successful in reducing poverty and even exceeded its target goals. The series of government-installed regulations - quotas, scholarships and other privileges designed to help the Malays - successfully transferred wealth to this group. Their share of the national wealth jumped from 2.3 percent in 1970 to 20.6 percent in 1995. The NEP was replaced in the 1990s by the New Development Plan, which primarily continued the NEP policies.
These policies have paid off handsomely based on commonly quoted absolute figures. Due to stable economic growth and the government's poverty reduction policies, per capita gross domestic product (GDP) more than doubled from US$1,750 in 1975 to about $4,300 in 2003. The incidence of poverty has declined steadily over the years, plunging from 49.3 percent in 1970 to about 5 percent today.
But on closer examination, a less-than-ideal story emerges. Malaysia's poverty problem could be far more serious than the statistics show, and the prime minister's poverty eradication plan is proving timely, as the nature of the problem has changed over the years and new ways of tackling poverty now are needed.
"While both absolute and rural poverty have declined considerably due to past poverty eradication efforts, there are indications that relative and urban poverty is worsening, new forms of poverty are emerging and inequalities are increasing," said Sulochana Nair of the University of Malaya.
According to a study by the Organization of Economic Cooperation and Development (OECD), while poverty has always tended to be largely and disproportionately rural phenomenon, the disparity between incidences of urban and rural poverty increased in the 1990s compared with the 1970s and 1980s, underscoring the increasingly uneven economic development that impacts contemporary Malaysia.
The OECD noted that in spite of its very substantial improvement in the incidence of poverty, in terms of income distribution, Malaysia's record has been less impressive. While current levels of income inequality as measured by the Gini coefficient (named after Italian statistician Corrado Gini), have improved compared with conditions in 1970 and with those in the late 1950s and 1960s, they seem to have worsened, especially in the 1990s, and appear worst among Malays. Rural households earned approximately 55 percent of the income earned by urban households in 1999. Again, while this urban-rural disparity represents an improvement over the disparity in 1970, it is worse than circumstances in the late 1980s.
The World Bank shares that analysis, noting that income inequality usually decreases as poverty rates fall. It said Malaysia was one of the few countries in East Asia where inequality fell over the past few decades, but where, despite the long-term reduction in poverty rates, the trend has reversed itself since 1990. "Overall, Malaysia remains among the most unequal countries in East Asia," it said.
According to World Bank data, Malaysia's Gini coefficient - a measurement of income inequality where 0 (zero) indicates perfect equality and 1.0 represents perfect inequality - of 0.49 is higher than Thailand's (0.41), the Philippines' (0.46) and Indonesia's (0.32). It is also higher than both Laos (0.37) and Vietnam (0.36). Another study pointed out that in 1999 Malaysia also had the highest income disparity in the Asia-Pacific region, with an income disparity ratio of 11.7 percent between the richest 20 percent and poorest 20 percent of the population.
This serious inequality is attributed to the rural-urban divide, as well as regional and ethnic disparities. Between 1970 and 1990, the income disparity ratio between urban and rural households increased from 1.70 to 2.04. Poverty rates vary between different ethnic groups, and although there is evidence that these differences have narrowed over time, the majority of the poor are still Bumiputras, who also comprise the largest of the nation's three major ethnic groups, namely the Malays, the Chinese and the Indians. Income disparities between Bumiputra and non-Bumiputra household have been widening since the 1990s despite affirmative action policies aimed at narrowing the gap between these households, according to Nair, of the University of Malaya.
In 1997, 70.2 percent of households in the bottom 40 percent income group were Bumiputra, while 62.7 percent of households in the top 20 percent income bracket were non-Bumiputra.
Observers have noted that, given their weaknesses, existing strategies for poverty eradication are unlikely to resolve the poverty problem. Little has changed in the way poverty is conceived, measured and addressed since the NEP went into effect. Poverty in Malaysia was largely perceived as a rural problem with strategies, programs and development spending reflecting a strong rural, and Bumiputra, bias.
First, the method used to calculate the incidence of poverty in Malaysia belies the real extent of the problem, say analysts. The income threshold used for the poverty line, currently set at about $135 a month in peninsular Malaysia, is unrealistic since studies suggest that the average income for an urban family with five members or less is about $230 a month. Therefore, the poverty figures do not capture the real numbers because they do not take into account the differences in the cost of living between rural and urban areas and thus exclude large numbers of the poor in urban areas from anti-poverty policies and programs.
Second, new forms of poverty also have emerged as a result of rapid economic growth and the development process itself. According to Nair, of the University of Malaya, "the underdevelopment of the rural areas and the growing privatization of resources and commercialization of activities impoverish certain groups and marginalized weaker sections in society."
These societal changes are increasing poverty levels for single, female-headed households, migrant workers and unskilled workers, while persistent poverty continues to plague the Orang Asli (indigenous people in peninsular Malaysia) and other indigenous people in East Malaysia, as well as Indians. Urban poverty has become critical with rapid urbanization and rural-urban migration. The increasing number of foreigners in poverty in the post-Asian financial crisis period also has increased the incidence of poverty. Non-citizens as a proportion of poor households more than doubled, from 7 percent to 15 percent between 1990 and 1997.
The Asian financial crisis of the late 1990s also highlighted some weaknesses in the system and its inability to cope with economic uncertainties. Between 1997 and 1998, the incidence of poverty rose from 6.1 percent to 8.5 percent, though this rise was less severe than that of other countries in the region such as Indonesia and Thailand, thanks to Malaysia's capital controls and public expenditure programs. However, the lack of a social safety net has raised concerns about the need for some form of unemployment insurance for those most in need during economic crises.
Some critics say the government needs to look at a broader spectrum of issues and factors in order to measure the poverty rate, going beyond the standard conomic causes of poverty such as lack of housing, health care and education, areas in which costs are escalating. Social problems such as drug addiction and alcoholism often involve school dropouts from low-income families, they say.
For the government, tackling the poverty problem is like putting old wine in new bottles. Yet if recent official statements promising to revamp the system - from taking a more targeted approach to more realistically revising the poverty line - were to be taken seriously, the poor might see some light at the end of the tunnel.
KUALA LUMPUR - With Malaysia's impressive track record in economic development over the past 30 years, and the constant push to modernize the country, it would seem that the problem of poverty would feature less prominently on politicians' agendas here. But this is not the case for the newly minted prime minister, Abdullah Ahmad Badawi. Soon after assuming office, he declared an ambitious plan to eradicate hardcore poverty within five years.
Malaysia's record in reducing poverty is impressive even on an international scale - so impressive that global agencies such as the World Bank and the United Nations have showered it with accolades. The government is currently documenting its success in a report to the UN on its efforts toward achieving the Millennium Development Goals - a UN blueprint, which among others things, aims to reduce poverty worldwide by half by 2015.
As a model country, Malaysia has much to share. After racial riots in 1969 triggered by dissatisfaction among the Bumiputra population (mainly Malays but also including indigenous people) who worried about losing their political influence to the economically strong Chinese, the government launched the ambitious New Economic Policy (NEP) in 1970, an affirmative action plan designed to give poor Malays a greater share of the country's future wealth. This "growth by equity" policy represented an active commitment to combat poverty, particularly among the Malays, who made up the majority of the poor, and to ensure economic growth that would benefit all.
Despite the controversy, the NEP was successful in reducing poverty and even exceeded its target goals. The series of government-installed regulations - quotas, scholarships and other privileges designed to help the Malays - successfully transferred wealth to this group. Their share of the national wealth jumped from 2.3 percent in 1970 to 20.6 percent in 1995. The NEP was replaced in the 1990s by the New Development Plan, which primarily continued the NEP policies.
These policies have paid off handsomely based on commonly quoted absolute figures. Due to stable economic growth and the government's poverty reduction policies, per capita gross domestic product (GDP) more than doubled from US$1,750 in 1975 to about $4,300 in 2003. The incidence of poverty has declined steadily over the years, plunging from 49.3 percent in 1970 to about 5 percent today.
But on closer examination, a less-than-ideal story emerges. Malaysia's poverty problem could be far more serious than the statistics show, and the prime minister's poverty eradication plan is proving timely, as the nature of the problem has changed over the years and new ways of tackling poverty now are needed.
"While both absolute and rural poverty have declined considerably due to past poverty eradication efforts, there are indications that relative and urban poverty is worsening, new forms of poverty are emerging and inequalities are increasing," said Sulochana Nair of the University of Malaya.
According to a study by the Organization of Economic Cooperation and Development (OECD), while poverty has always tended to be largely and disproportionately rural phenomenon, the disparity between incidences of urban and rural poverty increased in the 1990s compared with the 1970s and 1980s, underscoring the increasingly uneven economic development that impacts contemporary Malaysia.
The OECD noted that in spite of its very substantial improvement in the incidence of poverty, in terms of income distribution, Malaysia's record has been less impressive. While current levels of income inequality as measured by the Gini coefficient (named after Italian statistician Corrado Gini), have improved compared with conditions in 1970 and with those in the late 1950s and 1960s, they seem to have worsened, especially in the 1990s, and appear worst among Malays. Rural households earned approximately 55 percent of the income earned by urban households in 1999. Again, while this urban-rural disparity represents an improvement over the disparity in 1970, it is worse than circumstances in the late 1980s.
The World Bank shares that analysis, noting that income inequality usually decreases as poverty rates fall. It said Malaysia was one of the few countries in East Asia where inequality fell over the past few decades, but where, despite the long-term reduction in poverty rates, the trend has reversed itself since 1990. "Overall, Malaysia remains among the most unequal countries in East Asia," it said.
According to World Bank data, Malaysia's Gini coefficient - a measurement of income inequality where 0 (zero) indicates perfect equality and 1.0 represents perfect inequality - of 0.49 is higher than Thailand's (0.41), the Philippines' (0.46) and Indonesia's (0.32). It is also higher than both Laos (0.37) and Vietnam (0.36). Another study pointed out that in 1999 Malaysia also had the highest income disparity in the Asia-Pacific region, with an income disparity ratio of 11.7 percent between the richest 20 percent and poorest 20 percent of the population.
This serious inequality is attributed to the rural-urban divide, as well as regional and ethnic disparities. Between 1970 and 1990, the income disparity ratio between urban and rural households increased from 1.70 to 2.04. Poverty rates vary between different ethnic groups, and although there is evidence that these differences have narrowed over time, the majority of the poor are still Bumiputras, who also comprise the largest of the nation's three major ethnic groups, namely the Malays, the Chinese and the Indians. Income disparities between Bumiputra and non-Bumiputra household have been widening since the 1990s despite affirmative action policies aimed at narrowing the gap between these households, according to Nair, of the University of Malaya.
In 1997, 70.2 percent of households in the bottom 40 percent income group were Bumiputra, while 62.7 percent of households in the top 20 percent income bracket were non-Bumiputra.
Observers have noted that, given their weaknesses, existing strategies for poverty eradication are unlikely to resolve the poverty problem. Little has changed in the way poverty is conceived, measured and addressed since the NEP went into effect. Poverty in Malaysia was largely perceived as a rural problem with strategies, programs and development spending reflecting a strong rural, and Bumiputra, bias.
First, the method used to calculate the incidence of poverty in Malaysia belies the real extent of the problem, say analysts. The income threshold used for the poverty line, currently set at about $135 a month in peninsular Malaysia, is unrealistic since studies suggest that the average income for an urban family with five members or less is about $230 a month. Therefore, the poverty figures do not capture the real numbers because they do not take into account the differences in the cost of living between rural and urban areas and thus exclude large numbers of the poor in urban areas from anti-poverty policies and programs.
Second, new forms of poverty also have emerged as a result of rapid economic growth and the development process itself. According to Nair, of the University of Malaya, "the underdevelopment of the rural areas and the growing privatization of resources and commercialization of activities impoverish certain groups and marginalized weaker sections in society."
These societal changes are increasing poverty levels for single, female-headed households, migrant workers and unskilled workers, while persistent poverty continues to plague the Orang Asli (indigenous people in peninsular Malaysia) and other indigenous people in East Malaysia, as well as Indians. Urban poverty has become critical with rapid urbanization and rural-urban migration. The increasing number of foreigners in poverty in the post-Asian financial crisis period also has increased the incidence of poverty. Non-citizens as a proportion of poor households more than doubled, from 7 percent to 15 percent between 1990 and 1997.
The Asian financial crisis of the late 1990s also highlighted some weaknesses in the system and its inability to cope with economic uncertainties. Between 1997 and 1998, the incidence of poverty rose from 6.1 percent to 8.5 percent, though this rise was less severe than that of other countries in the region such as Indonesia and Thailand, thanks to Malaysia's capital controls and public expenditure programs. However, the lack of a social safety net has raised concerns about the need for some form of unemployment insurance for those most in need during economic crises.
Some critics say the government needs to look at a broader spectrum of issues and factors in order to measure the poverty rate, going beyond the standard conomic causes of poverty such as lack of housing, health care and education, areas in which costs are escalating. Social problems such as drug addiction and alcoholism often involve school dropouts from low-income families, they say.
For the government, tackling the poverty problem is like putting old wine in new bottles. Yet if recent official statements promising to revamp the system - from taking a more targeted approach to more realistically revising the poverty line - were to be taken seriously, the poor might see some light at the end of the tunnel.
Poverty in Malaysia
World Bank Supports Malaysian Education, Social, & Technology Projects
The World Bank today approved three loans to Malaysia totaling over US$400 million for social, education, and technology sector projects to help the government of Malaysia improve efforts in these areas.
"Malaysia has a very strong track record on developing its education and health sectors and has made important gains in the past. The World Bank is keen to support Malaysia to ensure that none of the gains are lost because of the crisis in the region," said World Bank Southeast Asia & Mongolia Country Director Ms. Ngozi Okonjo-Iweala. "We want to do all we can to ensure that the human development agenda that underpinned the country's long-term development plan Vision 2020 is supported and sustained."
Malaysia was one of the countries hardest hit by the Asian financial crisis. In June of 1998, the World Bank approved a fast-disbursing US$300 million single-tranche Economic Recovery and Social Sector Loan (ERSL) to protect vulnerable groups in society and support structural reforms in the banking and corporate sectors. However, as the crisis deepened, additional support became necessary. Therefore, in order to prevent the erosion of certain sector programs in Malaysia the World Bank is preparing a set of loans to assist the government.
Pre-crisis: |
The main objectives of the US$60 million Social Sector Support Project are to provide access to essential social services such as basic health and social assistance to the needy, and to strengthen the monitoring of poverty and of effectiveness assessments for programs.
The social development project is divided into several components:
- rural development;
- health clinics;
- social assistance for disadvantaged groups; and
- poverty monitoring and impact assessment.
This IBRD loan is at the Bank's standard interest rate for fixed rate US dollar single-currency loans, with a maturity of 15 years, including a three-year grace period.
The US$244 million Education Sector Support Project will assist the completion of the Seventh Malaysia Plan (1996-2000) in the education sector whose objectives are to: expand access to and equity in education; promote quality and excellence; and improve the efficiency of sectoral management.
This project will help the government of Malaysia maintain past education sector achievements by reinstating programs that were cut as a result of the crisis. The project provides funding to the Ministry of Education's core basic education programs, such as the construction of facilities, teacher training, and a pilot program for the extension of basic education. It will continue to assist the country in producing middle-level technical specialists with high skills and productivity, through support to the polytechnic system. Such skills are necessary for the medium-term recovery. It will also support institutional strengthening activities including improved sector management, staff development, and project management.
This IBRD loan is at the Bank's standard interest rate for fixed rate US dollar single-currency loans, with a maturity of 15 years, including a three-year grace period.
The US$100 million Year 2000 (Y2K) Technical Assistance Project will minimize disruptions in the country's social and economic infrastructure and to coordinate efforts in key sectors. This includes monitoring progress and contingency planning to deal with possible disruptions.
There are two components to the project:
- Government Sector Remediation. To assist the government of Malaysia, in a rapidly narrowing window of opportunity, to contain the disruption in the country's social and economic infrastructure that would be caused by the failure of critical central government systems to process dates after December 31, 1999. Agencies selected for financing will implement their remediation subprojects financed from this loan. Technical assistance will be provided by the Malaysian Administration Modernization Planning Unit in the Prime Minister's Department for Y2K diagnostics, technical and impact analysis, implementation planning, preparing terms of reference, supervision of consulting firms, preparing equipment specifications, and other activities
- National Y2K Task Force Activities. To strengthen the capabilities of the pre-existing National Y2K Task Force to carry out national monitoring, verification, legislative planning, national contingency planning, and knowledge sharing.
Poverty in Malaysia
Malaysia Measuring and Monitoring Poverty and Inequality
Foreword
In the last quarter of the twentieth century, Malaysia’s economic transformation was little short of spectacular. At the time of independence in 1957, Malaysia was a low-income, predominantly agricultural and rural economy. Around half of the country’s households were living below the national poverty line, with very little changed up to 1970, at which time 49 per cent of households were poor. In the following three and a half decades, rapid economic growth and structural change have transformed Malaysia into a prosperous, urban, and industrialized economy. By the end of the century, Malaysia’s poverty rate had fallen below 10 per cent, and in 2007 to less than 5 per cent. The nation has attained high human development.
Malaysia’s economic transformation owes much to its human and its natural resources. It also owes much to the sound economic, social, and commercial policies pursued, as well as political stability and national unity. Two broad features of the post-1970s have helped to reduce poverty: the country’s enviable economic growth record and the national commitment to a more equitable distribution of income.
At the beginning of the 1970s, the Malaysian economy relied largely on the production of primary products (natural rubber, tin, and palm oil) for world markets. Successive commercial policies gradually dismantled barriers to trade so that the country is today one of the world’s most globalized economies. Manufacturing, rather than agriculture, has been primarily responsible for the country’s export successes in recent decades. Exports of manufactured goods, particularly of electrical and electronic products, have been the key factor in sustained rapid economic growth.
Malaysia has also enjoyed macroeconomic stability. Liberal commercial policies and bold .nancial management have been important factors behind Malaysia’s strong and sustained growth record. Some economists have argued that economic growth, with its correlate of increased modern sector employment, is an essential pre-condition for poverty reduction: Malaysia provides an excellent illustration.
Malaysian governments have also aimed for a more equitable distribution of income and this is the second feature of the post 1970 period that has contributed to poverty reduction. Rural development programmes helped to raise the incomes of impoverished agricultural communities.
The New Economic Policy (NEP), formulated in 1970, sought to lessen the association of race with economic function. Policies were motivated by the idea that all communities should share in the country’s growing prosperity. Successive .ve-year plans have sought to achieve ‘growth with distribution’. This open commitment to economic prosperity for all has been an important ingredient in Malaysia impressive poverty record.
While the national poverty rate is extremely low by historical standards, there are still substantial spatial and community variations. Thus, for example, there remain relatively large numbers of poor households living in poverty in rural Sabah and Sarawak, as well as in the rural areas of Terengganu, Kelantan, and Kedah. The overwhelming majority of the country’s remaining poor are Bumiputera; especially prominent are the indigenous communities in Sabah and Sarawak.
Malaysia aims to improve on the poverty targets set through the Millennium Development Goals (MDGs). The Ninth Malaysia Plan, 2006–2010, repeated the commitment to achieve growth with distribution and set targets of reducing the overall poverty rate to 2.8 per cent and eradicating hard-core poverty by 2010. It also set ambitious targets to narrow income disparities and improve equity. In order to help achieve these targets, it is essential for policymakers to work with re.ned and disaggregated measures of poverty and inequality. This monograph describes and illustrates a range of useful approaches that can be used to measure and monitor poverty and income inequality.
We would like to thank members of the Project Team (listed on page xi of this monograph) from the Distribution Section of the Economic Planning Unit (EPU), the Department of Statistics (DOS) Malaysia, and UNDP for their excellent collaboration in putting this monograph together, under the able technical leadership of Mr David Demery of the University of Bristol with close support from Dr Chung Tsung Ping. We are con.dent that the publication will be of considerable value to all those interested in measuring and monitoring poverty and income inequality. We hope that it will also prove to be a useful tool for policymakers and practitioners in other developing countries and serve as a technical tool in South–South Cooperation for the achievement of the MDGs.
Foreword
In the last quarter of the twentieth century, Malaysia’s economic transformation was little short of spectacular. At the time of independence in 1957, Malaysia was a low-income, predominantly agricultural and rural economy. Around half of the country’s households were living below the national poverty line, with very little changed up to 1970, at which time 49 per cent of households were poor. In the following three and a half decades, rapid economic growth and structural change have transformed Malaysia into a prosperous, urban, and industrialized economy. By the end of the century, Malaysia’s poverty rate had fallen below 10 per cent, and in 2007 to less than 5 per cent. The nation has attained high human development.
Malaysia’s economic transformation owes much to its human and its natural resources. It also owes much to the sound economic, social, and commercial policies pursued, as well as political stability and national unity. Two broad features of the post-1970s have helped to reduce poverty: the country’s enviable economic growth record and the national commitment to a more equitable distribution of income.
At the beginning of the 1970s, the Malaysian economy relied largely on the production of primary products (natural rubber, tin, and palm oil) for world markets. Successive commercial policies gradually dismantled barriers to trade so that the country is today one of the world’s most globalized economies. Manufacturing, rather than agriculture, has been primarily responsible for the country’s export successes in recent decades. Exports of manufactured goods, particularly of electrical and electronic products, have been the key factor in sustained rapid economic growth.
Malaysia has also enjoyed macroeconomic stability. Liberal commercial policies and bold .nancial management have been important factors behind Malaysia’s strong and sustained growth record. Some economists have argued that economic growth, with its correlate of increased modern sector employment, is an essential pre-condition for poverty reduction: Malaysia provides an excellent illustration.
Malaysian governments have also aimed for a more equitable distribution of income and this is the second feature of the post 1970 period that has contributed to poverty reduction. Rural development programmes helped to raise the incomes of impoverished agricultural communities.
The New Economic Policy (NEP), formulated in 1970, sought to lessen the association of race with economic function. Policies were motivated by the idea that all communities should share in the country’s growing prosperity. Successive .ve-year plans have sought to achieve ‘growth with distribution’. This open commitment to economic prosperity for all has been an important ingredient in Malaysia impressive poverty record.
While the national poverty rate is extremely low by historical standards, there are still substantial spatial and community variations. Thus, for example, there remain relatively large numbers of poor households living in poverty in rural Sabah and Sarawak, as well as in the rural areas of Terengganu, Kelantan, and Kedah. The overwhelming majority of the country’s remaining poor are Bumiputera; especially prominent are the indigenous communities in Sabah and Sarawak.
Malaysia aims to improve on the poverty targets set through the Millennium Development Goals (MDGs). The Ninth Malaysia Plan, 2006–2010, repeated the commitment to achieve growth with distribution and set targets of reducing the overall poverty rate to 2.8 per cent and eradicating hard-core poverty by 2010. It also set ambitious targets to narrow income disparities and improve equity. In order to help achieve these targets, it is essential for policymakers to work with re.ned and disaggregated measures of poverty and inequality. This monograph describes and illustrates a range of useful approaches that can be used to measure and monitor poverty and income inequality.
We would like to thank members of the Project Team (listed on page xi of this monograph) from the Distribution Section of the Economic Planning Unit (EPU), the Department of Statistics (DOS) Malaysia, and UNDP for their excellent collaboration in putting this monograph together, under the able technical leadership of Mr David Demery of the University of Bristol with close support from Dr Chung Tsung Ping. We are con.dent that the publication will be of considerable value to all those interested in measuring and monitoring poverty and income inequality. We hope that it will also prove to be a useful tool for policymakers and practitioners in other developing countries and serve as a technical tool in South–South Cooperation for the achievement of the MDGs.
Poverty in Myanmar
Poverty (in this context) means the people live in a state or condition of not having enough basic necessities in their daily life.
Most people live in the 40,000-odd villages of the country, while the majority of the urban population resides in the capital city of Rangoon. Among the population engaged in agriculture, 37 percent of the people do not have any land or livestock. Poverty and misery have increased in the past 3 decades. In 1997 the CIA World Factbook estimated that 23 percent of the Burmese population had incomes that placed them below the poverty line.
In the countryside, a bullock cart (a 2-wheeled cart drawn by 2 castrated bulls) is the most popular means of transportation. Most farmers own a pair of oxen or water buffalo, a hoe, and a bullock cart for agricultural purposes. The rural houses (actually huts without running water or toilets) are made of bamboo. One portion is used for cooking and the other for sleeping. In the major towns and cities, there are houses made of brick and concrete. They are usually small and overcrowded.
The government's socio-economic policies have not helped the people. Large outlays of money have been spent on the military, while only meager funds have gone to education and health issues. The numbers of children who do not attend school or who have dropped out reportedly increased in the 1990s. According to World Bank estimates, only 46.9 percent of the secondary school-age children were enrolled in schools during 1995. Education beyond the primary age is not compulsory. Burmese authorities boast a literacy rate of 83 percent, though independent observers have suggested that the rate may be as low as 30 percent. Most universities have been closed since December 1996.
Health care in the rural areas was marginal until the 1960s. The government has opened more rural health centers and directed more doctors to the rural areas. As a result, the doctor-patient ratio has decreased considerably, from 1 per 15,560 to 1 per 3,578 in 1986. Health care is provided free of charge.
2. Economic Factor
1. Economy factor (shows statistics and graphs)
2. Find examples and relate to the Great Depression or economic downturn
3. But most importantly, the corruption which leads to how it is.
Once prosperous, Burma was, in 2001, one of the poorest countries of the world.
The major aim of Myanmar's government has been to rehabilitate, modernize, and diversify an economy that was extensively disrupted by World War II and that failed to develop from the 1940s through the 1960s. To this end, all foreign companies, all banks, the entire transport system, all foreign and much domestic trade, and all the main branches of industry have been nationalized. Some nationalized industries initially showed declines in output, while others were hard pressed to hold their own. By 1974, the government had no choice but to modify some of its more rigidly Socialist economic policies. Economic development proceeded slowly under the four-year plan for 1974–78 and the 1978–82 development program, which was allocated 60% more funding than its predecessor and which achieved an annual growth rate exceeding 6%. The four-year plan for 1982–86, costing an estimated $5 billion, set an average annual growth target of 6.2%. The plan stressed infrastructural development, with particular emphasis on agriculture, construction, and energy production. The four-year plan for 1986–90 encouraged foreign investment. Since 1990, private investment has been encouraged as the government attempts to revitalize the economy. As of January 2001, the value of approved investment had reached about $7.4 billion. However, most of this—$6.23 billion or 84%—came before the Asian financial crisis of 1997. Before 1997, foreign investment approvals had averaged close to $900 million a year; from 1997 to 2000, the average was $234 million a year. The economy has not recovered from the effects of the 1997 crisis, and problems have only worsened with the global slowdown in 2001, and the worldwide decline of foreign direct investment in the aftermath of the 11 September 2001 terrorist attacks on the United States. In 2001, the government introduced its third five year short-term plan, with a targeted average growth rate of 6%. However, both continued reform and substantial foreign investment would be necessary to meet the goals of the plan. Such needed reforms include dismantling unproductive state-owned enterprises, establishing an independent state bank, making available private sector credit, controlling government spending, and adjusting the official exchange rate. However, in 2002, the gap between the official exchange rate and the market rate had widened to an astounding 100 to 1, and foreign investment has slowed to a trickle. In the first six months of 2002, investment from other ASEAN countries, the source of most of Myanmar's foreign investment to date, was actually zero.
3. Social Factors: Education, Health and Infrastructure
Education
Myanmar’s educational system is in a state of underdevelopment and uncertainty. Although enrollment in primary schools is very high, the completion rate lags behind. Reports indicate that only one third of all primary school children finish the first five years. Many students drop out due to poverty, lack of support, and poor health. Although school attendance is high in urban areas and among male students, however village schools in a largely rural-agrarian country are caught by poor attendance, especially among the female students.
Myanmar's educational system has been suffering from a proportionately declining budget. While there has been a sizable increase in the number of schools, colleges, universities, and teachers during the last five years, the percentage of total education expenditure proved to be in decline.
Health
Myanmar has one of the world's worst health care systems, with tens of thousands dying each year from malaria, tuberculosis, AIDS, dysentery, diarrhea and a litany of other illnesses. While there are hospitals in the impoverished Southeast Asian nation also known as Burma, only a few can afford to pay hospital workers the various "fees" in the tightly controlled nation that often face corruption.
According to 70-year-old man from Phyu Township, who journeyed two days by bus to see a doctor at the Thai border town of Mae Sot, he said “Even if you use the toilet in the hospital you have to pay money," He say again that the government never think of improving health care, they only know how to fight and because of them, the citizens have to suffer as a result.
Many patients come too late and die in the clinic, while newborn babies and the elderly are sometimes abandoned by family who seriously cannot afford to care for them.
The situation inside Myanmar is complicated and health data are often not reliable or difficult to gather, especially from areas of the country dominated by ethnic minorities who have been at civil war for decades.
Infrastructure
4. Environment Factor
- Environment factor
- Natural disasters and way of life
Cyclone Nargis swept across Myanmar on May 2 and 3, 2008, triggering a huge sea surge and killing nearly 140,000 people.
Over 2 million affected
Damage estimated at $4 billion
U.N. appeal underfunded
The storm destroyed villages and paddy fields, seriously affecting up to 2.4 million people in Yangon and the Irrawaddy Delta.
One year on, aid workers say at least 500,000 survivors, including 200,000 children, are still living in makeshift shelters cobbled together from tarpaulin and bamboo poles. Their misery is likely to be compounded as this year's monsoon season approaches.
Many farmers are also struggling with crippling debts after the cyclone destroyed their crops and 200,000 farm animals. Rice yields are down nearly a third, mainly due to heavy rains in April and soil salinity after fields were flooded with sea water during the cyclone.
The main aid coordinating body has issued an urgent pre-monsoon appeal for funds to help pay for shelter materials and other assistance. The appeal is part of a three-year, $691 million recovery plan drafted by the Tripartite Core Group (TCG), comprising the United Nations, Myanmar and its Southeast Asian neighbours.
The plan faces serious fund-raising hurdles, including a global economic crisis that is squeezing foreign donor governments. Myanmar already receives far less aid than other poor countries due to its dismal human rights record.
The United Nations World Food Programme (WFP) is feeding 350,000 people, which will be scaled back to 250,000 until the end of the year.
JUNTA RESTRICTIONS
Most of those who died were killed by a 3.5 metre (12-foot) wall of water that hit the low-lying Irrawaddy Delta along with 240 kph (150 mph) winds. The dead included 10,000 who perished in just one town, Bogalay, 90 km southwest of Yangon.
The cyclone was the worst to hit Asia since 1991, when 143,000 people died in Bangladesh.
But the country's ruling generals, who have a deep mistrust of the outside world, were initially reluctant to let foreign aid workers into the country, sparking strong international criticism.
After three weeks, Myanmar's junta finally agreed to admit international aid workers, albeit under tight restrictions. The government accepted relief flights into Yangon but rejected offers of French and American ships delivering aid. The military regime also let WFP airlift supplies into the delta and allowed in medical teams from Southeast Asian neighbours.
Before his breakthrough deal with the junta, U.N. chief Ban Ki-moon said aid workers had only been able to reach around a quarter of those in need.
Aid workers say much has been achieved since, but it will take years of sustained international support for the worst hit areas to fully recover.
Some had expressed initial optimism that their work in the cyclone area could lead to more humanitarian space elsewhere in the country. But the generals have dashed any hope of that, arresting activists who led private cyclone relief efforts and tightening their grip ahead of scheduled 2010 elections.
The regime said in February it would only extend the TCG's mandate to the middle of 2010, although it was not clear how the decision would affect foreign agencies operating in the delta.
MONKS DELIVER AID
Following the cyclone survivors crammed into monasteries, schools and other buildings after arriving in towns that were on the breadline even before the disaster.
The homeless clamoured to get into privately run shelters rather than government-run camps. In Bogalay, some complained of forced labour and low supplies of food at the state-run centres.
Frustrated by the speed of the official response, ordinary people sent trucks and vans into the delta with clothes, biscuits, dried noodles and rice provided by private companies and individuals. With almost total distrust of the government, private aid was left for distribution by Buddhist monks, who have immense moral authority.
Officials said legal action would be taken against anybody found hoarding or selling relief supplies, amid rumours of local military units expropriating trucks of food, blankets and water.
Some weeks into the aid operation, the United Nations revealed it had suffered significant losses because of distorted official exchange rates. The government later agreed to let outside donors pay local companies directly and in U.S. dollars, rather than via the official, long-winded system involving foreign exchange certificates.
SHELTER
Nargis destroyed 375,000 homes, according to government estimates. The United Nations puts the figure higher at 450,000.
A year on, only 17,000 new homes have been built, according to U.N. estimates, while another 200,000 have been repaired by their owners. But many of these patched-up homes are fragile.
Normally, natural materials such as thatch from palm trees and shrubs are used to make cheap, relatively rainproof roofing, but Nargis destroyed trees along with buildings.
David Evans, acting head of the U.N. housing agency UN-HABITAT, says tens of thousands face the prospect of spending another year living in extremely vulnerable shelter.
Nearly all Nargis survivors received some form of emergency shelter after the storm, including those few allowed into the junta's "model villages" after the generals were criticised for their slow response to the disaster.
But a year on, donor funding for housing has met only 4 percent of the U.N. target. Donors are giving money for education, health care and food, but they consider housing and infrastructure the government's responsibility, says Andrew Kirkwood, country director of aid agency Save The Children.
Agencies are handing out new tarpaulins, while UN-HABITAT has appealed for $10 million to provide temporary roofing materials.
5. Ethnicity & Riots and Discrimination
Myanmar is a union of 135 ethnic groups with their own languages and dialects. the races are the Kachin, the Kayah, the Kayin, the Chin, the Mon, the Barnar, the Rakhine, and the Shan. The name Myanmar embraces all the ethnic groups.
The root of hatred:
- Different in religion
- Basic anti foreigner feelings
- Low standard of living of the recent migrants
- Recent migrants willingness to do, dirty, dangerous and difficult jobs
- Indians took over the Burmese lands especially Chittiers
- Indians had already filled up and monopolised the government services when the burmese were ready for those jobs
- Professional competition
- World recession of 1930 aggravated the competition for the reduced economic pie
-09S08
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