Elevating B40 households to a middle-class society
KUALA LUMPUR: It is timely that the country shifts its focus to the bottom 40% household income group (B40), with Malaysia’s poverty almost eradicated at 0.6%, said Economic Planning Unit deputy director-general of human capital Johan Merican.
He said the income gap in Malaysia has narrowed over the last five years and the income growth of B40 stood at 13%, compared to the T20 and M40 groups of 8%-9%.
“We’re narrowing the gap, reducing inequality in Malaysia. We’re seeing a reduction in terms of income inequality between the rural and urban groups, as well as between ethnic groups,” Johan said at the End Poverty Campaign here yesterday.
Uplifting the B40 households towards a middle-class society is one of the focus areas in the 11th Malaysia Plan.
The World Bank Group has called for policies that work, including investing in children, health, infrastructure and making money work for the poor.
“These has been consistent with Malaysia’s development policy. The largest part of our Budget allocation has always gone towards human capital, education, healthcare and infrastructure, which has been the backbone of the government’s pro-growth policies,” Johan told reporters.
According to the World Bank Poverty and Shared Prosperity report 2016: “Taking on Inequality”, there is good global progress in reducing extreme poverty and sharing prosperity. There is also unprecedented reduction in global income inequality.
Yet, progress is insufficient to end poverty by 2030 given current global growth projections, unless inequality declines faster.
The report revealed that the B40 had positive income growth in 60 of the 83 countries monitored. In 49 of these countries, B40 incomes grew faster than the top 60s. Two thirds of the world’s population live in countries where incomes gaps have narrowed.
From left: World Bank Poverty Equity Global Practice senior economist Kenneth Simler, Johan and World Bank Development Research Group Lead Social Development specialist Michael Woolcock speaking to the press in Kuala Lumpur yesterday.