MIER and FNF host Poverty Alleviation Conference

This coloumn introduces activities in Malaysia that aim at:

• Introducing the social dimensions of liberalism
• Restructuring fiscal transfer systems
• Enhancing private initiative in the social sector
• Promoting liberal reforms for sustainable social security systems

The Friedrich Naumann Foundation together with the Malaysian Institute of Economic Research (MIER) organised the Conference on Poverty Alleviation and Social Stability in Kuala Lumpur on 23rd and 24th October 2002. As a follow-up of the last-year conference on Re-engineering Social Policy in the process of shaping the future development of the Malaysian economy and society, this conference indicated the existing problems of poverty, examined the nature of
poverty in various sectors of economy, and looked into the impact of globalisation on poverty.

YB Dr Tiki Anak Lafe, the Deputy Minister of National Unity and Social Development delivered the keynote speech in place of YB Dato' Dr Hajah Siti Zaharah binti Haji Sulaiman, the Honorable Minister of National Unity and Social Development.

The presentations were divided into four sessions:

• Session I: Poverty Eradication
• Session II: Globalisation and Poverty
• Session III: Urban Poverty
• Session IV: Rural Poverty

The representative from the Economic Planning Unit (EPU)referred to remarkable achievements that resulted from the New Economic Policy (NEP) and the National Development Policy (NDP), as the incidence of poverty declined from 49.3 per cent to 7.5 per cent in the past 30 years. He also ensured that the government continues to play the leading role in poverty eradication efforts. However, some participants argued that the degree of rural and urban poverty has actually increased. Overall poverty rose from 6.1 percent in 1998 to 8.5 percent in 1999. One presentation pointed out that there are inadequate public resources allocated to address urban poverty and that income generation is one key dimension of poverty eradication.

The government should create the ability to generate enough income to meet the needs for urban living and ensuring a better quality of life.

The representative from the Consumers Association of Penang (CAP) raised the issue of a rural-urban drift, and identified problems, such as wealth and luxury needs as well as huge national debts, which have supposedly developed according to the needs of the industrialised countries rather than the needs of the Malaysian society.

CAP advised the government to construct and implement a model of rural development and agriculture which engenders greater self-reliance and independence from the world market by providing productive assets and marketing and credit facilities to the poor.

This view, however, neglects the benefits that Malaysia has reaped from globalisation. Open markets and a deeper penetration into existing markets have tremendously helped to bring down the level of poverty during the last 30 years. To withdraw from international markets and to bring Malaysian agriculture back to subsistence level will definitely not be in the interest of the poor. Furthermore, in an international perspective, transfer payments, excessive loan facilities and other subsidies have not alleviated poverty but only increased the dependence of low-income households. Poverty has to be overcome by empowering the poor to participate in markets and to develop their individual wealth.

Although Malaysian policy makers have put much effort into alleviating poverty and much has been achieved in this attempt, poverty has not been eradicated completely. The recommendations of this conference, therefore, will be compiled and distributed to the relevant authorities as policy input, and made as a proposal to the Ministry of National Unity and Social Development.

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