There appears to be quite some angst among Indian NGOs and politicians about how the MITRA fund of about RM 100 million per year has or has not been disbursed. I think we need to also ask ourselves whether the Mitra Allocation is addressing the problems faced by the poorest 20% of the Indian population in Malaysia.
What then are the main problems faced by B20 Indians? Let me enumerate a few of them –
- Low and unstable income
Many of the B20 Indians work in the informal sector – daily paid contract workers in construction and in the services sector – often with wages far below the official minimum wage. The wage floor for this category of workers has been depressed by the large number of undocumented migrant workers in the country. Incidentally, B20 Malays face an identical problem – difficulty in finding steady work, low wages and a poor bargaining position vis-a-vis their employers.
- Lack of affordable housing
The ongoing clearance of “squatter” settlements in towns all over the country is steadily reducing the stock of cheap housing in urban areas. In Sg Siput for example, old wooden houses can be rented for as low as RM 100 per month. Many of them leak, and the zinc roofing make them quite uncomfortable during the day. And the surroundings become waterlogged and muddy when it rains. But still, they are the homes that B20 Indians can afford. An urban renewal programme that fails to expand the stock of affordable rental-housing in the form of PPR flats or terrace houses, creates enormous financial problems for the B20 Indians as well as the B20 of other ethnic groups in urban areas.
- Old age poverty
In Malaysia living long can be a curse, especially if one is in the bottom half of the population. More than 50% of the B40 of all races do not have EPF savings to start with. They were in the informal sector and never contributed to EPF. Former factory workers who had EPF savings usually finish off these savings within 5 years of retirement – given their low wages, their EPF savings usually weren’t much to start with. Elderly B20 Indians are in this unfortunate group. More often than not, their children are struggling to keep their own families afloat. There isn’t much left to provide the senior members of the family.
The actual cause of poverty among the Indian B20.
The real problems facing B20 Indians have been listed above. Are they ethnic in origin? The B20 of other ethnic groups also suffer the same problems. And can anyone expect the paltry RM 100 million MITRA allocation to resolve these problems that have structural causes?
The thing is, Malaysia is a rich country. According to RMK 13 data, our per capita Gross National Income was RM 54,793 in 2024 – that would work out to RM 18,264 per month for a household of 4. But the actual household income of the B20 of all races is below RM2,500 per month. There is massive wage suppression in countries like Malaysia. Our workers receive wages that are 1/8th the sum received by workers doing exactly the same job in the “advanced” countries. This is due to the way our economy is integrated into the global economy. We rely on low wages and low costs of production to attract foreign investors to set up factories and other businesses. Intense competition (for FDI) with other countries in ASEAN and elsewhere in the Global South severely limits our capacity to increase wages for our workers.
Friends, it should be clear – the main cause of poverty in Malaysia is not ethnic. It is socio-economic – the fact that this nation does not pay its workers a decent wage. Yet, many groups – Indian, Malay and others – attempt to take an ethnic approach to solve socio-economic problems that affect all the working people in this country irrespective of their ethnicity.
We really need to be clear on this issue. If we do not get the analysis right, then we are going to keep focusing on, and arguing about, less consequential issues such as the fact that a significant portion of the MITRA allocation wasn’t distributed. And failing to form the coalitions we need to tackle the problem of maldistribution of the national income.
Why SEDIC / MITRA?
Can I be candid here? Why, in the first place, did DS Najib introduce MITRA (as SEDIC) about 10 years ago? In my opinion, it was a clever move to wean Indian activists and NGOs away from Hindraf, and anchor them to the ruling government by periodically offering them funds. It never was meant to uplift the B20 Indian population. It was a political ploy to win over a section of active Indian youth, and to reduce dissent. NGOs have to be careful about criticizing government if they are thinking of applying for RM 50,000 or RM 100,000 annually!
Do you believe that the political purpose of the MITRA allocation has changed now that it is offered by the Madani government?
And, while some of the programs run on MITRA funds are genuinely useful, there are many which are much more beneficial to the organising NGOs than to the “masses” these projects are purported to help.
Poverty is aggravated by ethnic issues.
I mentioned above, that the main cause of the poverty of B20 Indians is socio-economic and not ethnic. This is true, but needs to be clarified. A more accurate statement would be to say that roughly 80% of the cause of poverty of B20 Indians is socio-economic, the while the remaining 20% has ethnic discrimination as a contributory factor.
An example of ethnicity causing or aggravating the economic problems of B20 Indians is the fairly high incidence of statelessness in B20 Indians. (Higher than most other communities except for the Sulu and some other ethnic groups in Sabah.) Despite being born in the country, of parents who themselves were born in Malaya / Malaysia, there are several thousand Indians who do not have birth certificates and identity cards. Carelessness, ignorance and apathy on the part of their parents is often the cause of this, and it devastates their lives. Education is affected. They cannot work in the formal sector. Health care is more difficult to access. And their children have a high risk of becoming stateless too. Unfortunately, the National Registration Department is often unnecessarily rigid and creates almost insurmountable barriers to obtaining proper documents.
The stateless need help to deal with the over-strict Registration Department. Perhaps some MITRA funds could be used to train and support more activists and NGOs to handle birth certificate and identity card issues, to sponsor DNA tests and procure legal assistance to file Judicial Review claims.
Another of ethnic related issues aggravating Indian B20 poverty, is the difficulty that B20 Indians now face in getting government jobs. Fairer access to government jobs wouldn’t completely solve the problem of underemployment, as government jobs make up only about 10% of all the jobs in the economy. However it would help if Indians obtained their fair share of government jobs. It would be reasonable, I think, to request that the intake of Indians to government jobs should follow the population ratio of Indians in the nation, state or muncipality as the case may be. About 16% of intakes to government jobs in Perak for example, should be for Indians, as that is the population ratio of Indians in this state.
Yet another example of ethnicity aggravating Indian B20 poverty is the reluctance of government to include students from poor Indian families in educational programs such as residential schools, junior colleges, scholarships and other affirmative action programmes that have been set up for Bumiputra students.
Hijacking of opportunities
However, as should be the case for all affirmative action based on ethnic criteria, sufficient care must be taken to ensure that B20 Indians get at least 20% of the government jobs and educational opportunities offered to Indians. What often happens is that ethnic quotas won on the basis of poverty in a particular ethnic group, are often enjoyed by the more affluent members of that ethnic group. This tendency isn’t confined to the Indian community alone. Bumiputra communities are also badly affected by this social malady. This tendency needs to be looked for and minimized. It would be good if MITRA could fund an ongoing effort to monitor job intake at various levels of government to ensure that especially B40 Indians are adequately represented.
Shouldn’t we be working together?
If we are seriously concerned about the plight of B20 Indians, shouldn’t we be partnering other (non-Indian) activists and NGOs who are concerned about poverty in the B20 of their ethnic groups, to jointly address unjust socio-economic structures. These socio-economic structures primarily benefit some very powerful people – the top 5% of society. It is therefore imperative to work with other Malaysians to create the multi-ethnic peoples’ power required to restructure our economy such that the wealth created in this country is shared a little more equitably..
Jeyakumar Devaraj
Chairperson
Parti Sosialis Malaysia
9/9/2025