Name: Nur Zahirah binti Mohamad Zaffir

ID: 2020950383
Class: MBA111 5B

CHAPTER 3
Address urban poverty in Budget 2022

October 25, 2021 @ 9:54pm

LETTERS: Urban poverty has worsened in Malaysia and has been severely impacted by the
pandemic, and the 2022 Budget needs to address it fully and not provide cosmetic touches here
and there to impress or give false confidence to the people.

The B40 has been hit the hardest with debts, loss of jobs and income whereas their "fixed costs"
have been the same. It was revealed recently that about 20 per cent of the M40 have now joined
the B40 club!

Urban poverty in Malaysia can be traced back from the 1970s and 80s onwards when large
numbers of people left the kampungs and estates and settled down in the squatters, and found
work in the growing number of SMEs.

Poor living conditions, government inaction, exploitation of workers and the lack of a
minimum wage then spiralled urban poverty to become the major issue it is presently. Urban
poverty has become a major cause of social ills and will destabilise society.

Although better housing for the poor and the imposition of a minimum wage have been
somewhat realised over the decades, the basic cause of urban poverty still remains without an
effective remedy as the minimum wage or remuneration levels are not enough to cope with the
cost of living and as such education of their children, healthcare, savings for any eventuality or
for social mobility have been much affected.

The government has to reassess the wages and remuneration levels in the private sector, which
have been suppressed by the employment of foreign workers. A look at the PPR flats and low-
cost houses or apartments will reveal the true face of urban poverty – the poor and dirty living
conditions, the vandalization of public property all around, the defective municipal services,
social ills, broken families and crime. Children growing up in this environment will be greatly
affected.

The methods of addressing urban poverty must be different from tackling rural poverty. The
rural poor can at least rely on agriculture as their source of income derived from their oil palm
or rubber smallholdings or fishing or planting of crops. The urban poor have nothing to rely on
and must start from square one!

The government needs to come up with a wide range of incentives and assistance programmes
to help the urban poor who number in the millions now.

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Apart from increasing the minimum wage, other ways to help the poor could be the provision
of public transport and the siting of SMEs and other industries where there is a high
concentration of urban poor especially in the low and medium-cost housing areas.

Others include to provide temporary licences/permits for setting up small businesses in the
neighbourhood; enable more housewives and womenfolk to work by the government
legislating for flexible working hours; reviewing some labour laws to help the lower-income
group; urge local government contractors to employ locals only for a wide range of general
work thereby increasing their income; urge the government and private sector to employ more
of the semi-literate and physically challenged; provide more social welfare programmes to help
the urban poor tide over the difficulties brought about by the pandemic.

Many countries are finding success at eliminating urban poverty by improving income levels
and better living conditions for the poor to ensure their social mobility to the middle class in
the future. Malaysia must eliminate racial and provincial reckonings in its programme to
overcome poverty as now there are a large number of the poor amongst all races in the country.

Neither poverty nor prosperity is static as the status quo can change as happened recently when
a large percentage of the M40 had plummeted to poverty due to the pandemic, and similarly,
large numbers of the poor and lower-income groups became richer during the 1990s when the
economy expanded at a rapid pace.

The government should not focus on poverty as a political or racial issue but should address it
as a constant socio-economic problem besetting the whole country.

V. Thomas
Sungai Buloh, Selangor

ARTICLE LINK:https://www.nst.com.my/opinion/letters/2021/10/739578/address-urban-
poverty-budget-2022

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My summary

In short, the above article explains the virus has had a significant negative influence on
Malaysia's urban poverty, which has to be fully addressed in the 2022 Budget. Urban poverty
became an unsolvable problem as a result of poor living standards, government inertia,
labour exploitation, and a lack of a minimum wage. The income and compensation levels in
the private sector need to be re-evaluated by the government. Urban poverty must be solved
using different strategies than rural poverty. While the urban poor has little to rely on, the rural
poor at least have agriculture as a source of income. Besides raising the minimum wage, public
transportation services and the placement of SMEs and other companies in areas with a high
concentration of urban poor people are potential additional methods to help the poor. Another
method is offering temporary licenses or permissions for establishing small companies in the
community. Furthermore, encourage local government contractors to increase their income by
using only locals for a variety of general jobs and offer social welfare activities to assist the
urban poor in managing the hurdles. Moreover, urban poverty can be eliminated with higher
income levels and better living standards, this can ensure future social status in the middle
class. In order to overcome poverty, Malaysia must get rid of racial and regional enumeration
as there are still many impoverished individuals of all races living there.

New knowledge that I gained from the above article:

1. The absence of opportunity and skill development for the majority of the working-age
population is the cause of urban poverty.
2. SMEs are crucial to the economy because they support and strengthen changes. They
boost innovation, provide a large number of new job possibilities, and broaden the tax
base.
3. Employment, education, income, wealth, and place of residence are all socioeconomic
variables.