Post-budget news reports highlighted PM Anwar’s announcement that Malaysia has reduced its hardcore poverty rate to 0.09%, proclaiming that the government has successfully eradicated poverty¹. While most governments refer to absolute or relative poverty lines, Malaysia has additionally used hardcore poverty as an indicator for its anti-poverty programs’ successes.
Hardcore poverty, according to the Department of Statistics Malaysia, is defined as when a household’s gross monthly income is below the Food Poverty Line Income (Food PLI), indicating that the household does not earn sufficient income to meet basic calorie requirements². The value was recalibrated from RM1,198 in 2022 to RM1,236 in 20243. Therefore, while it makes an impressive press announcement to claim that Malaysia has eradicated poverty by reducing hardcore poverty to a negligible level, we need to ask the question if the bar has been set far too low.
Being a bare minimum threshold, it is inaccurate to classify a household uplifted from hardcore poverty to be considered ‘non-poor’, as they still struggle to fulfil other living expenses such as health, housing, education and other necessities. Thus, as pointed out by Benedict Weerasena, research director of Bait Al-Amanah, celebrating poverty eradication with such a low threshold creates a ‘false narrative’ and an illusion that there exist zero hardcore poor in Malaysia4.
Therefore, this article argues that Malaysia should move away from this ‘false narrative’ of having eradicated poverty and focus on utilising the Multidimensional Poverty Index that has been identified as a poverty indicator since the Eleventh Malaysian Plan (2016-2020). The Department of Statistics Malaysia (DOSM) adopted the multidimensional poverty index (MPI) in 2016, using the framework developed by the Oxford Poverty and Human Development Initiative (OPHI) in the UK 5. This method is a powerful poverty assessment tool that enables states to dissect poverty data into the breadth and intensity of deprivations according to various dimensions such as housing, access to utilities, healthcare, and level of education. Furthermore, it allows simultaneous measurement of how many people are deprived in multiple dimensions, and the data can be disaggregated easily by population subgroup or by poverty dimension or indicator⁶.
MPI has served as an effective policy tool to cater targeted programmes to multidimensionally uplift the poor globally. In Mexico, the implementation of the MPI was empowered with the Social Development Law (2005), requiring all poverty measurements to be multidimensionally determined. The disaggregated deprivation data according to geographical locations enabled monitoring and alignment of poverty eradication policies all the way down to the municipal level. Governors and municipal leaders were held accountable for using their resources effectively by ensuring the adequate provision of utilities, housing, education, and healthcare for their constituents. This approach combined both efforts to increase incomes of poor households and initiatives to enhance their social rights. Similarly in Costa Rica, the power of the MPI was maximised through a presidential directive in 2016, requiring all officials and mid-level officials from the social sector ministries and institutions to use the Multidimensional Poverty Index as an official diagnostic and monitoring tool for social programmes and budgetary planning at all levels7.
However, while the Thirteenth Malaysian Plan begins with the framework to fight poverty through the multidimensional lens, it falls short of details and clarity on how the MPI will be integrated into the programmes. Besides initiatives such as the Sumbangan Asas Rahmah (SARA), entrepreneur assistance, the children’s first 1000 days programme to address malnutrition, and indigenous community upliftment, most affirmative action policies are modelled along racial justifications. Therefore, they appear as stand-alone initiatives addressing specific racial groups, failing to address poverty along class lines. For example, the Indian community seems to be solely signposted to the Malaysian Indian Blueprint, ‘delinking’ them from a holistic approach across different ministries⁸.
Poverty eradication policies need to be depoliticised and deracialised to provide targeted assistance to the impoverished social group irrespective of race and religion. MPI provides such an efficient tool to disaggregate poverty data into specific deprivation dimensions according to social groups and their geographical locations. The MADANI government should mobilise all levels of government, from ministries to local councils, to ensure targeted assistance and progress monitoring are done effectively at all levels. It is unfortunate that, while such a powerful tool exists, policymakers keep falling back to their old ways of addressing poverty along racial lines.
Targeting the poor with specific poverty eradication plans has proven to be effective in China and Kerala. In Kerala, the Kudumbashree Poverty Eradication programme launched in 1998 has been extremely successful in identifying the poor and uplifting them from poverty. Kudumbashree differs from conventional self-help microfinance programmes because it incorporates organising initiatives of women from poor households though neighbourhood committees up to the state level. The participants are empowered to debate and formulate programmes that they find to be the most suitable for their communities⁹. These plans were further broken down to micro-plans for each household, matching their requirements with available government resources. Similarly in China, the communist party cadres were mobilised to measure multidimensional poverty in over 26,000 villages across the country. Each party cadre was then assigned five households each, for them to understand the households’ specific requirements and to assist them in accessing necessary resources and plans accordingly from the government. Therefore, beyond income enhancement, this holistic approach enabled poor households to be uplifted multidimensionally from poverty. Studies have shown that targeted microcredit programmes are better, especially for empowering women within poor households 10.
Therefore, it is crucial for the Madani government to move beyond household income and racially driven poverty policies towards the Multidimensional Poverty framework to effectively formulate targeted microprograms for households to holistically address their multiple deprivations. This can only be achieved through an inter-ministerial cabinet committee framework that places the accountability upon all relevant ministers to meet their targets in reducing the specific deprivations faced by different social groups. Mapping multidimensional poverty with specific deprivation dimensions will assist ministries at the national level to mobilise state officials and municipalities to implement programmes. However, these programmes can only be successful with substantial ownership by local communities through effective participatory democratic mechanisms.
Generic programmes with a ‘one-size-fits-all’ perspective fail to reach the pockets of poverty that persist in our blind spot. It is time that economic empowerment is coupled with enhancement of social rights through genuine empowerment of the poor.
Sivarajan Arumugam
16 October 2025.
References
1 Kamal H (2026) ‘Budget 2026: Malaysia’s hardcore poverty falls to historic low of 0.09%, The Sun , 10 October 2025. Available at: https://thesun.my/malaysia-news/budget-2026-malaysia-s-hardcore-poverty-falls-to-historic-low-of-009-PC15068124. (Accessed on 16/10/2025).
2 Open DOSM (2025) Poverty, Department of Statistics Malaysia. Available at: https://open.dosm.gov.my/data-catalogue/hh_poverty. (Accessed on: 16/10/2025).
3 The Vibes (2025) ‘Govt edges out hardcore poverty as Anwar unveils people-centric 2026 budget’, 10 October 2025. Available at: https://www.thevibes.com/articles/news/113857/govt-edges-out-hardcore-poverty-as-anwar-unveils-people-centric-2026-budget. (Accessed on: 16/10/2025)
4 Chan, M. (2024) “Move away from hardcore poverty as ultimate metric, economist tells govt”, 2024, Free Malaysiatoday (FMT). Available at : https://www.freemalaysiatoday.com/category/nation/2024/06/06/move-away-from-hardcore-poverty-as-ultimate-metric-economist-tells-govt. (Accessed on: 16/10/2025).
5 World Bank (2021) Multidimensional Poverty in Malaysia: Improving Measurement and Policies in the 2020s, Washington, DC: The World Bank World Bank Group (2021).
6 Alkire et al. (2014) “Multidimensional Poverty Measurement and Analysis Chapter 1- Introduction” OPHI Working Paper No.82, Oxford Poverty and Human Development Initiative (OPHI).
7 UNDP (2019) How to Build a National Multidimensional Poverty Index (MPI): Using the MPI to inform the SDGs, United Nations Development Programme ,1 UN Plaza, New York 10017 USA.
8 Kementerian Ekonomi (2025) Rancangan Malaysia Ketiga Belas 2026–2030 Melakar Semula Pembangunan, Ketua Setiausaha, Kementerian Ekonomi, Putrajaya.
9 Deepika, M.G. and Sigi, M.D. (2014) ‘Financial inclusion and poverty alleviation: an alternative state-led microfinance model of Kudumbashree in Kerala, India’, Enterprise Development & Microfinance, 25(4), pp. 327–340. Available at: https://doi.org/10.3362/1755-1986.2014.030.
10 Wu, B. et al. (2024) ‘Multidimensional relative poverty alleviation of the targeted microcredit in rural China: a gendered perspective’, China Agricultural Economic Review, 16(3), pp. 468–488. Available at: https://doi.org/10.1108/CAER-06-2023-0167.