Why do economists suggest focusing on social mobility over poverty eradication?

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Economists Advocate for Social Mobility Over Strict Poverty Eradication to Foster Long-Term Prosperity

Economists argue that while Malaysia has made significant strides in reducing hardcore poverty, the focus should shift towards promoting social mobility. This perspective suggests that the statistical reduction in hardcore poverty, defined by a household income below RM1,236 per month as of 2024, captures only a partial picture of economic well-being. The concern is that households surviving solely on continuous aid, while no longer statistically classified as hardcore poor, may remain economically fragile, lacking stable incomes, savings, and long-term prospects. Therefore, the emphasis should be on creating an economic model that empowers households to earn, save, invest, and build a better life through their own initiatives, viewing aid as a temporary bridge rather than a permanent destination.
Redefining Success Beyond Poverty Lines

The current definition of hardcore poverty, based on the Food Poverty Line Income, is seen as a narrow metric. While Malaysia has seen a dramatic decrease from 6.9 per cent in 1989 to 0.09 per cent in 2024, economists like Carmelo Ferlito of the Center for Market Education propose replacing the goal of "eradicating poverty" with the more encompassing ambition of promoting social mobility. This suggests that true success lies not just in lifting households above a minimum income threshold but in fostering conditions that enable sustained economic advancement and resilience.
Economic Fragility Despite Statistical Gains

A household may statistically emerge from hardcore poverty due to consistent government assistance, such as the Sumbangan Asas Rahmah (SARA) or Sumbangan Tunai Rahmah (STR) initiatives, which can provide up to RM1,800 monthly for some families. However, this reliance on aid can mask underlying economic vulnerabilities. Such households may continue to depend on aid, lack diversified income streams, have no savings, reside in inadequate housing, and struggle to improve their long-term economic standing. The critical issue, as highlighted by Ferlito, is whether Malaysia's economic framework permits these households to genuinely climb the economic ladder through their own efforts.
Building Resilience Against Economic Shocks

Beyond simply moving households out of hardcore poverty, there is a need to implement measures that prevent them from falling back into it due to unforeseen economic events. Emeritus Professor Barjoyai Bardai of the Malaysia University of Science and Technology suggests encouraging initiatives like home-based micro-businesses to supplement household incomes. However, he stresses that such measures require substantial time, at least five years, and coordinated efforts across various government agencies to yield effective and lasting results for families.
Comprehensive Measurement of Anti-Poverty Efforts

Ultimately, the success of anti-poverty policies should be evaluated through a broader lens than just the number of households removed from the hardcore poverty list. Economists advocate for measuring improvements in overall living standards, including enhanced access to quality education and healthcare, increased financial resilience, and demonstrable upward social mobility. This holistic approach ensures that efforts are directed towards sustainable well-being and genuine economic empowerment for all citizens.

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Why do economists suggest focusing on social mobility over poverty eradication?

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