KUALA LUMPUR – June 25, 2017: What is the B40 economic category and does it in any way indicate the economic well-being of a certain segment of the population?
An opposition-minded blogger thinks it is proof that a big percentage of Malaysians are poor but economists disagree.
According to Professor Zulkifli Senteri of Binary University, the category is merely a collective definition introduced by the government to refer to the bottom 40 per cent of households that earn less than RM3,900 per month.
“It is wrong to simply assume that the government has somehow caused more households to be poor just because the B40 category did not exist during the previous administrations,” asserted Zulkifli.
Zulkifli explained this in response to a claim by blogger Syed Akbar Ali that introducing the B40 indicated that Malaysian households were becoming poorer under the administration of Prime Minister Datuk Seri Najib Razak.
He said that having a proper income classification group like the B40 will allow the government to be focused, specialised and effective in devising income increment policies for specific target groups.
Another economist, Professor Hoo Ke Ping, shares Zulkifli’s views and arguea that the current gap between different income groups has been considerably narrowed and it is partly due to having the B40 category.
“With it, the government has a clear focus on the target audience of their income boosting policies,” said Hoo, who is an independent macro-economic analyst.
He said Syed Akbar had likely confused those in the B40 category with households that are living below the poverty line.
“Those in the B40 are not poor, they are part of the country’s middle-class income group. The poor in the country are households earning less than RM800 per month.
“Mind you, our current extreme poverty rate has plummeted to just 0.28 per cent over the past few decades,” Hoo pointed out.
In acknowledging that former prime minister Tun Dr. Mahathir Mohamad had done a lot to reduce the country’s poverty rate by diversifying the economy, Hoo also said that Mahathir did not pay much attention to households that are now classified as B40.
Furthermore several failed major initiatives such as Perwaja Steel and over-subsidising of the national car Proton had caused the number of urban poor to increase.