No, it won’t take tens of billions; only RM61.5m a year in direct handouts is needed to eliminate poverty in Sarawak, notes our correspondent.
During the Sarawak election campaign, DPM Muhyiddin pooh-poohed the RM1bn Pakatan Rakyat had pledged to set aside to address poverty eradication in Sarawak, saying that the BN government had already spent and allocated tens of billions for the purpose.
In the heat of the moment, it appeared that no one called the DPM to account.
We actually have the statistics, courtesy of the Tenth Malaysia Plan (see, the Appendix for Thrust 3), to assess whether the RM1bn pledged by Pakatan Rakyat would be adequate and to inquire into the impact — or lack thereof — of the tens of billions allegedly spent by the BN government.
In 2004, the incidence of poverty in Sarawak was 7.5 per cent of households, or 34,800 households out of a total of 465,400 households.
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At that time, the mean or average poverty line income was RM765 a month, and the poverty gap index stood at 1.5 per cent.
The key to figuring out how much is needed to raise the poor above the poverty line income is the poverty gap index statistic.
Leaving technical details aside (http://en.wikipedia.org/wiki/Measuring_poverty), the poverty gap index of 1.5 per cent in 2004 means that it would have taken only 1.5 per cent of the poverty line income totalled across all households to determine the total ringgit amount needed to lift all poor households above the poverty line income.
Of course the poverty line income is hardly a generous provision, but it is what the BN government uses to measure poverty, and we can use it as a convenient and consistent yardstick.
Doing the calculations gives the result that it would have required RM5.3m a month in direct handouts, or RM64m a year, to lift all poor households above the poverty line income in 2004.
In other words, if the welfare department had just handed out an average of RM160 a month to each and every poor household in 2004, there would have been no poor households in Sarawak by the official poverty measure.
Meanwhile, this can buy time for other agencies and NGOs to work with the poor to figure out what programmes and policies are required to eliminate poverty without direct handouts.
Let’s say it requires five years to go through this latter consultative process. Then, it would have required the government to set aside RM320m — let’s account for inflation and make that RM400m — over the five years from 2004 to eliminate poverty in Sarawak by direct welfare payments, while going through an intensive consultative process to design appropriate programmes and policies.
Instead, in 2009, we find that the incidence of poverty in Sarawak was 5.3 per cent of households, or 27,100 households of a total of 510,400 households.
Yes, that is a drop from 2004, but, following Muhyiddin, the billions spent only managed to reduce the number of households in poverty by 7,700 households — when our calculations show that it would have taken only millions to eliminate it!
Hence, we want to know what happened to the tens of billions that Muhyiddin proudly boasted had been spent and allocated for poverty eradication!
As for Pakatan Rakyat’s pledge, the 2009 statistics show that it would have required only RM61.5m a year in direct handouts to eliminate poverty in Sarawak, or RM308m for five years of direct handouts, buying time for a consultative process with the poor to design appropriate programmes and policies for sustained poverty eradication without direct handouts.
In other words, the pledge of RM1bn would have been more than adequate — as there would not need to be the extra billions to fill the pockets of the cronies and to cover plain mismanagement and wastage.