After Malaysian independence, significant chunks of the Malaysian economy were controlled by British colonial firms. Second economically to these monopolies were small-scale retail enterprises run by the
Malaysian Chinese and small-scale moneylending businesses run by a few
Malaysian Indians. After the
13 May Incident in 1969, where racial rioting broke out in the federal capital of
Kuala Lumpur, the
Malaysian New Economic Policy (NEP) was initiated. Its purpose was to narrow the disparities in wealth between the
Malay and non-Malay communities in the country through aggressive
affirmative action and state intervention in the economy. It has been suggested that although the NEP was initially successful in achieving its goal of reducing the economic gap between different communities in the country, its politicisation in the 1990s and 2000s (decade) hampered its implementation; during this period, intraethnic economic inequity amongst the Malays reportedly increased. Anecdotal evidence has been used to suggest that rural Malay communities have not been significantly uplifted economically by the NEP. As the country modernised, new forms of poverty appeared; one such problem was that of urban poverty. Economic development has been named as the cause of poverty amongst "single female headed households, the rural elderly, unskilled workers and migrant workers" by a local economist. The
United Nations Development Programme has praised Malaysia for its reportedly successful poverty reduction programmes. Officially: However, in 2019, UN disputed the poverty figures released by Malaysia. Malaysia stated that its poverty figures was down to 0.4% in 2016 when compared to 49% in 1970. This is because Malaysia defined poverty as household income per month less than RM 980. However, UN officials argued that Malaysia has set the poverty line too low and household income more than RM 980 but less than RM 2000 are in fact under the poverty category also. The UN also stated that realistic poverty rate in Malaysia is from 16% to 20%. However, Malaysia stand firm of its claim while pointing that the UN assertions are incorrect. By 2022, Malaysia government has revised the absolute poverty rate to 6.2% based on the monthly household PLI of RM 2589. ==See also==