The poor's conundrum

Bank Negara Malaysia (BNM) on Thursday maintained its stance on interest rate yesterday and economists' have predicted a rise in interest rates in Q4 2014. However, the central bank cautioned about creeping inflationary pressure.

What are the implications to those who are in the lower middle income group and in below the poverty line class?

Budget 2014 included measure to undertake fiscal consolidation measures including subsidy rationalisation and cutbacks in government spending. This measures are primarily aimed at slashing the federal debt which currently stood at 54% of gross domestic product (GDP) and is nearing the threshold of 55%. However, if off balance sheet items were take into account, we would be indebted at the 68% level.

The numbers don't look good. On the flip side, Bursa Malaysia has been performing commendably especially against the backdrop of a weak global economy.

What do all these mean to poor?

The definition of urban poor and rural poor has not been underlined clearly. Let's take an urban poor earns RM900 per month. After deducting rental, food and other necessities, the individual has nothing much to save. Buying a piece of property is definitely out of question.

The poor need to be empowered to enable them to increase their disposable income. That's the only way they can elevate themselves out of the vicious cycle of poverty. Government should do more in this aspect.

We already have a Ministry of Urban Wellbeing, Housing and Local Government and they could take the mantle to inculcate changes among the poor. Micro financing along the lines of Grameen Bank which was initiated by Nobel laureate, Professor Yunus could provide the solution to wipe out poverty in the country.

If adequate measures are not taken, the poor would be sidelined and our quest for achieving Vision 2020 would have a hollow meaning, In addition, crime rates would also escalate as many just cannot survive on their earnings and would resort to criminal activities.

The government must intervene to check poverty immediately so that the impoverished rakyat can enjoy a better standard of living.