WORLD BANK REPORT CONFIRMED SABAH STILL THE POOREST STATE

World Bank: Sabah still the poorest

Kota Kinabalu, November 11, 2010: A World Bank report has confirmed that Sabah is still the poorest State in the country.

Although efforts by the Government have somewhat brought down the poverty line, the World Bank's 2010 Malaysia Economic Monitor (MEM) Report showed that Sabahans continue to struggle to make ends meet with this being more evident in the outskirts of town.

"Even though the levels have gone down, the deep pockets of poverty are here in Sabah," said World Bank Human Development Sector Director (East Asia and Pacific Region), Emmanuel Jimenez.

"Sabah has about 10 per cent of the Malaysian population but more than 40 per cent of all poor people in Malaysia live in Sabah."

Speaking after presenting the MEM report, Wednesday, he said if one were to compare that figure to that of Selangor, which has 20 to 25 per cent of the population, the percentage of poor people was drastically lower, which is less than 10 per cent.

"Whatever poor people remaining in Malaysia, many of them are here in Sabah, and most of them live in the rural areas (many involving ethnic) groups such as the Rungus, Suluk and Orang Sungai É according to the statistics, they remain very high," he said.

The World Bank's 2010 MEM report focuses more on the medium and long term challenges towards economic growth in Malaysia, with poverty and inequality being the angle.

Towards this end, achieving the nation's Vision 2020 goal of high-income status requires a higher growth rate than that achieved in recent years, Jimenez said, adding, the challenge is also to ensure that the benefits are broadly shared across all layers of Malaysia's society.

On the inequality point in Sabah, he said there were two aspects to this, one being that Sabah lags behind in terms of social indicators and the other being the disparity between people in urban and rural areas.

"I would have imagined that once you move away from the coastal area to the interior, the poverty rates remain very high É just from our own experience coming from the airport to the hotel, you don't see poverty but the statistics say there's a lot and there are huge disparities," he said.

Another factor that could affect productivity, hence Malaysia's vision, is that the people are paid poor salaries against the job they are doing.

"Those who are working maybe poor not because they're not working but working in low-paying jobs É so the question is how to increase their productivity."

World Bank Senior Economist (Asia and Pacific Department) Philip Schellekens, lead author of the report, pointed out that Malaysia had recorded tremendous successes in poverty reduction, in Sabah as well, in the past four decades.

"We've also seen inequality has improved in the country but it has levelled off at a relatively high level.

"In the first two decades following 1970, inequality fell quite dramatically and it remained at a very high level ever since," he said.

Touching a bit on Sabah, he said the State's economic performance has been somewhat insulated from the global development.

"(This is) because Sabah is not that exposed to the volatility observed in the manufacturing sector," Schellekens said.

The MEM report suggested a three-pronged approach to meeting Malaysia's aspirations -

• raising economy-wide opportunities by strengthening the investment climate and revitalising labour markets,
• promoting investment in human capital by strengthening education and vocational skills training,
• and providing well-targeted social protection to help those who cannot help themselves.