As Malaysia nears zero hardcore poverty, economists say it should be viewed as a milestone and not a destination

KUALA LUMPUR, July 8 — Buoyed by Malaysia’s strong economic performance, Prime Minister Datuk Seri Anwar Ibrahim announced last year that his administration would fully end hardcore poverty in the country by the first quarter of 2026.

In 2024, two years after assuming office, Anwar announced that Kuala Lumpur, Melaka and Negeri Sembilan had fully eradicated hardcore poverty.

The Pahang government announced similar success that same year, followed by the Selangor government last year and Sabah in January 2026.

Malaysia defines hardcore poverty based on a household’s ability to earn the minimum income needed to meet their basic food requirements – also called the Food Poverty Line Income – which stands at RM1,236 as of 2024.

In other words, any household earning less than RM1,236 a month is considered to be in hardcore poverty.

Malaysia has successfully slashed the hardcore poverty incidence from 6.9 per cent in 1989 to a mere 0.09 per cent – translating to about 8,000 households – in 2024, the Household Income and Expenditure Survey noted that year.

While acknowledging the success, economists say the statistically measured reduction of hardcore poverty only tells one part of the story.

They added that Malaysia has to redefine poverty in more comprehensive terms so that households currently benefiting from targeted government aid can seek long-term prosperity.

Improving social mobility

Carmelo Ferlito of the Center for Market Education said Malaysia should replace the goal of eradicating poverty with the more realistic ambition of promoting social mobility.

Ferlito said the government’s success in lowering statistically measured hardcore poverty should be backed by efforts to promote social mobility by creating conditions for people to earn, save, invest, work, and build a better life through their own initiatives.

“If a poor household survives because of continuous aid, it may be statistically less poor, but it remains economically fragile. It may still depend on aid, lack stable income, have no savings, live in poor housing, or remain unable to improve its long-term prospects,” he said.

The government currently extends a RM100 credit for all Malaysians under the Sumbangan Asas Rahmah (SARA) initiative while the Sumbangan Tunai Rahmah (STR) aid is only for eligible recipients. 

Last week, the prime minister said many Malaysian households currently receive government assistance totalling up to RM1,800 – slightly higher than the country’s minimum wage of RM1,700 – depending on family size, and he also promised to increase STR aid in the future.

However, Ferlito stressed that working-age households require better social mobility through more jobs, higher productivity, stronger small businesses, better access to finance, and an education system that develops critical thinking and entrepreneurial initiative.

“For working-age households, aid should be a bridge, not a destination.

“The key issue is not whether a household crosses a poverty line because of aid. The key issue is whether Malaysia’s economic model allows that household to climb,” he added.

Echoing similar opinions, Emeritus Professor Barjoyai Bardai of the Malaysia University of Science and Technology said the government should consider measures to ensure that economic shocks such as job loss, illness or rising living costs do not push families back into the hardcore poverty from which government aid lifted them.

One such measure, he said, would be encouraging households to start micro-businesses from home to supplement their household income.

However, Barjoyai stressed that such measures require a longer runway of at least five years and a concerted effort from various agencies before households can reap the benefits.

“Eradicating hardcore poverty should be viewed as the first milestone rather than the final destination.

“Ultimately, the success of anti-poverty policies should not be measured only by the number of households removed from the hardcore poverty list. It should also be assessed by improvements in living standards, access to quality education and healthcare, financial resilience and the ability of families to achieve upward social mobility,” he explained.