Pandemic has given birth to ‘nouveau poor’ Malaysians, expert warns

The disruption of the Covid-19 crisis to the economy has given birth to a new economic class of the “new poor”, an economist says.

Madeline Berma said this is a vulnerable group made up of those in the bottom 40, middle 40 and top 20, the three income classifications in Malaysia, who have slipped into poverty after a loss of income during the pandemic.

“In the past, we had the ‘new rich’. Today, we are seeing the emergence of the ‘new poor’,” Madeline, who is also a member of the government’s Human Rights Commission, told MalaysiaNow.

She said Covid-19 has reinforced the problem of unemployment, adding that the crisis brought on by the pandemic has given rise to a host of new issues.

The vulnerable category includes single mothers, the disabled, the elderly as well as those in abject poverty, she said.

“In the past, we had the ‘new rich’. Today, we are seeing the emergence of the ‘new poor’.”

While these groups have long been in existence, she said, the impact of the pandemic has exarcerbrated the problem and made public their plight.

Official statistics for May this year showed that there were 47,300 newly unemployed persons in Malaysia, pushing the total to 826,100 – an increase of 0.3% within just a month.

The government has also warned that it will be difficult to achieve the goals of its poverty eradication programmes given the global impact of Covid-19 on the economy.

Madeline acknowledged that the RM322.5 billion budget for 2021 would help the new poor.

“While it is not specifically stated as poverty eradication, the budget allocation has focused on the B40 category and below,” she said.

“We have a good approach to fighting poverty as allocations are directly channelled to public health and well-being, especially for the vulnerable group.”

The recently tabled budget saw a RM700 million increase in monthly welfare assistance for people in the vulnerable group, taking the total to RM2.2 billion in a move expected to benefit more than 400,000 people including those unable to work due to disabilities, the elderly and children from poor families.

The government also set aside RM28 billion for subsidies and incentives, including for transport and price control on goods and services.

Madeline said she had been part of discussions on the 12th Malaysia Plan, the government’s post-2020 national development agenda, adding that there would be specific funds for the war against poverty.

The plan is expected to be tabled in Parliament next year.

“However, if the pandemic does not show any sign of abating and continues into the next year, efforts to fight poverty will be stunted,” she warned.

“This is because the allocations will have to be redirected to public health and fighting Covid-19.”