Why is poverty set to rise for the first time in 30 years?

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Poverty is projected to increase for the first time in three decades due to a confluence of factors stemming from the current global crisis.

For the first time in 30 years, poverty is anticipated to rise, with global institutions warning that millions will be pushed into poverty this year. This projected increase is largely attributed to the widespread impact of the current crisis, which has led to income and job losses, particularly affecting self-employed workers and those in vulnerable sectors like agriculture, livestock, and fisheries. The crisis has exacerbated existing disparities, especially for rural communities in Malaysia, who were already facing higher poverty rates and lower income levels compared to urban areas.
Impact of the Current Crisis on Livelihoods

The current crisis has significantly disrupted livelihoods, leading to substantial income reductions and job losses. Most self-employed workers have experienced a decline in income or lost their jobs altogether, with many reporting that their savings, often equivalent to only one month's worth of expenses, have been depleted. The agriculture, livestock, and fisheries sector has been particularly hard-hit; by the end of March, 70% of workers in this sector saw their incomes decrease, and 21% lost their employment.
Pre-existing Vulnerabilities in Rural Communities

Even before the onset of the pandemic, Malaysian rural communities exhibited higher levels of poverty, lower income levels, and less educational attainment than their urban counterparts. These communities, which comprise over seven million people, are often excluded from resources and opportunities accessible to urban households. This pre-existing vulnerability means that rural populations are disproportionately affected by economic shocks and are less equipped to cope with the ensuing challenges, leading to a widening of existing disparities.
The Role of Resilience in Mitigating Poverty

Building resilience is crucial for individuals and households to recover from shocks without compromising their long-term prospects. A lack of resilience pushes vulnerable rural individuals and families deeper into poverty and debt, reduces educational opportunities, and consequently diminishes their capacity to withstand future crises. This highlights the need for proactive measures, similar to disaster preparedness for natural calamities like cyclones and floods, to address the risks and vulnerabilities exacerbated by the current economic downturn.
Exacerbation of Disparities Through Reduced Access

The current crisis has amplified existing inequalities by limiting access to essential resources for rural populations. Children in rural areas face significant disadvantages in education due to a lack of reliable broadband access and digital literacy skills, hindering their ability to participate in online learning. Furthermore, rural households often lack the financial means to afford multiple devices for their children or consistent internet connectivity, widening the educational gap between rural and urban students and impacting their future employability.

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Why is poverty set to rise for the first time in 30 years?

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