Teaching PowerPoint Slides - Chapter 3

33
Socio-economic Issues
LEARNING OUTCOMES
After reading this chapter, you should be able to:

Explain the difference between the concepts of absolute
poverty, absolute hardcore poverty and relative poverty
Identify the causes of rural poverty, urban poverty and
hardcore poverty
Discuss the measures taken to eradicate poverty
Explain the causes of inequality in income distribution and
the measures to narrow the income gaps
Discuss the Islamic perspective on poverty eradication
and income distribution
MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

© Oxford Fajar Sdn. Bhd. (008974-T), 2018 1–3
Poverty
 Poverty means not having enough for food,

shelter and clothing.
 This subsequently results in insecurity,

powerlessness and exclusion of individuals,
households and communities, and subjects the
poor to exploitation.

Measurement of Poverty
 The poverty line income (PLI) is a level of income

used to measure poverty that separates those
who are poor from those who are not poor.
 Households which earn below the PLI are

regarded as living in absolute poverty, while
households with a gross income less than half of
the PLI are defined as absolute hardcore poor.

Absolute Poverty
 Absolute poverty means lacking the ability to

even meet fundamental human needs; e.g. food,
clothing and shelter. If the gross income of a
household is below the PLI, the household is
considered as living in absolute poverty.

Absolute Hardcore Poverty
 Absolute hardcore poverty is also known as

extreme or abject poverty; a condition whereby
basic human needs, e.g. food, safe drinking
water, sanitation facilities, healthcare, shelter,
education and information, are severely deprived.
 In 1988, absolute hardcore poverty was defined
in Malaysia as the condition in which the gross
monthly income of a household was less than half
of the PLI (traditional PLI).

Absolute Hardcore Poverty
(cont.)
 Based on the 2005 PLI methodology, hardcore

poverty is defined as the monthly income below
the Food PLI needed to cover nutritional food and
drinks that allow households to be healthy.

Relative Poverty
 Relative poverty in Malaysia is linked to income

inequality between groups. The three types of
relative poverty applicable in Malaysia are:
– Comparing between urban and rural areas

Relative Poverty (cont.)
– Comparing between ethnic groups
– Comparing between states and regions

Causes of Poverty
 Causes of Poverty in Urban Areas:

– Rural migration
– Higher cost of living in urban areas
– Lack of job opportunities
 Causes of Hardcore Poverty:

– Unable to work, due to sickness or old age
– Unable to participate in government programs
– Minimal education or skills

Measures to Eradicate Poverty
 Measures to Eradicate Rural Poverty:

– Advancing the agricultural sector
– Strengthening small and medium enterprises
– Improving basic services and quality of life
 Measures to Eradicate Urban Poverty:

– Increasing employment opportunities
– Educational facilities such as primary and secondary
schools should be provided
– Better town planning to benefit the poor

Measures to Eradicate Poverty
(cont.)
 Measures to Eradicate Hardcore Poverty:
– Build PPRT or provide house repairs
– Provide interest-free loans
– Provide welfare assistance
– Provide nutrition programmes
– Provide training and microcredit
– Provision of shares
– Assistance or scholarships for students from poor
families
– Set up old folks’ homes

Income Distribution
 Income distribution is defined as how a nation’s total

GDP is distributed among its population.
 If everyone in the country earns exactly the same

amount of money, then the income distribution is
perfectly equal.
 If only one person earns all the money, but all others
do not earn any money, then the income distribution
is perfectly unequal.

Income Distribution (cont.)
 Income equality or equal distribution of income is

determined by measuring the Gini coefficient.

Causes of Inequality in Income
Distribution
 Laissez-faire or capitalist economy

 Recession
 Education level and skills affect wages
 Growth in technology widens income gap
 Inequality is a vicious cycle

Measures to Narrow the Income
Gap
 Increase the level of education

 Minimum wage
 Progressive income tax to reduce income gaps
 Create five regional economic corridors to narrow
regional development gap
 Implement low-cost housing and medium-cost
housing in urban areas
 Enhancing inclusiveness towards an equitable
society
Islamic Perspective on Poverty
and Income Inequality
 Measures to Eradicate Poverty from the Islamic

Perspective:
– Zakat
– Taxation
– Waqaf
– Sadaqah

Islamic Perspective on Poverty
and Income Inequality (cont.)
 Measures to Solve Income Inequality from the

Islamic Perspective:


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33

After reading this chapter, you should be able to:

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Poverty means not having enough for food,

 This subsequently results in insecurity,

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 The poverty line income (PLI) is a level of income

 Households which earn below the PLI are

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Absolute poverty means lacking the ability to

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Absolute hardcore poverty is also known as

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Based on the 2005 PLI methodology, hardcore

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Relative poverty in Malaysia is linked to income

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

– Comparing between ethnic groups

– Comparing between states and regions

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Causes of Poverty in Urban Areas:

 Causes of Hardcore Poverty:

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Measures to Eradicate Rural Poverty:

 Measures to Eradicate Urban Poverty:

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Income distribution is defined as how a nation’s total

 If everyone in the country earns exactly the same

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Income equality or equal distribution of income is

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Laissez-faire or capitalist economy

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Increase the level of education

 Measures to Eradicate Poverty from the Islamic

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

 Measures to Solve Income Inequality from the

MALAYSIAN ECONOMY Unlocking Growth, Sustaining Equity All Rights Reserved

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