Eradicating Poverty in Malaysia

A few months ago, I attended an economic forum in Amsterdam where one of the discussions centered on poverty. Much of the discussion was centred around economic deprivation and what some of the root causes were and how best to eradicate it. This got me thinking about the poverty situation in Malaysia. A few weeks ago, I attended the TBN Asia Conference in Kuala Lumpur, where poverty in Malaysia was mentioned a number of times by the global speakers.

A resource-rich country like Malaysia should not be dealing with the poverty issues it is faced with. Every few months, our family visits an Orang Asli kampung in Tapah. They are deeply affected by poverty; approximately 77% of them living below the poverty line (2010); and 35% in extreme poverty with drastic deprivations in water, electricity, sanitation, transport, and education. Additionally, the Sabah & Sarawak indigenous people face high poverty rates too with Sabah Bumiputera ~20% and Sarawak Bumiputera ~7.3% in 2014.

Yet, we don’t speak much about poverty in Malaysia. This is because the official rate of poverty in Malaysia was as low as 0.4% in 2016 (1MDB wasn’t the only thing that was not accurate). In fact, The United Nations Development Programme has praised Malaysia for its reportedly successful poverty reduction programmes. Officially, In 2002, it was 5.1 percent down from 7.5 percent in 1999. However, in 2019, the 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 RM980. However, UN officials argued that Malaysia had set the poverty line too low and household income less than RM 2000 would still constitute being under the poverty line. The UN also stated that the realistic poverty rate in Malaysia was between 16% to 20%. However, in 2016, Malaysia stood firm of its claim while pointing that the UN assertions were incorrect. By 2022 (with the new government in place), Malaysia revised its absolute poverty rate to 6.2% based on the monthly household PLI of RM2,589 (Source: Poverty in Malaysia)

Related: Merdeka, Fear, and the Cost of Fixing the Wrong Problems

What is Poverty?

All these back-and-forth disputes led me to understand poverty better and what it really means. Poverty is often defined too narrowly—usually in terms of income or lack of material wealth—but to truly understand poverty, we have to view it holistically, not just economically.

Let me give you my deep and layered understanding of poverty—from my own lens shaped by leadership, human development, faith and research. I believe economic and material poverty is just part and parcel of a bigger systemic problem.  Here are a few thoughts on what really constitutes poverty:

1. Poverty is more than lack of money

Yes, at the surface level, poverty is economic deprivation—not having enough to meet basic needs like food, shelter, education, and healthcare. This is what economists refer to as absolute poverty (earning below a certain threshold, like USD$2.15/day as defined by the World Bank). But this is just one dimension of poverty. Many of the most heartbreaking forms of poverty have little to do with money.

2. Poverty is a mindset

I’ve worked with leaders across the world, and I’ve seen that some of the most talented individuals remain stuck because of a poverty of aspiration. Or more sadly, poverty of hope. When people internalise failure, develop learned helplessness, or believe they can’t change their circumstances, they become trapped in cycles of inaction. This is often called the poverty of hope. And it could become a generational issue as parents teach their children this ‘learnt helplessness’. Generational poverty isn't just passed through income levels—it's passed through beliefs, trauma, and disempowerment.

And here’s the tragedy: You can give someone money, but if they’ve accepted a mindset of poverty, it won't lead to lasting change.

3. Poverty is relational

Poverty is deeply relational—people are cut off from networks, opportunity, support, love, and belonging. Many feel unseen, unwanted, and forgotten. There are many lonely people who feel hopeless and helpless due to being cut off from their communities.

That’s why in the communities Leaderonomics serves, especially in MAD Movement, we don’t just offer programmes—we create communities of love where people are seen, known, and encouraged. Because isolation is its own form of poverty. There’s a brilliant quote from Bryant Myers (World Vision) that captures this:

Poverty is the result of relationships that do not work, that are not just, that are not for life, that are not harmonious or enjoyable. Poverty is the absence of shalom in all its meanings.

4. Poverty of Interconnectedness – Trust Capital

Beyond individual relationships, poverty can also manifest as a poverty of interconnectedness, where a lack of trust capital permeates a community or society. Trust capital refers to the collective level of trust, cooperation, and shared norms within a social system. When this is low, people are less likely to collaborate, share resources, or invest in collective goods. This can stifle economic activity, weaken social support systems, and prevent communities from leveraging their collective strengths. In such environments, suspicion replaces collaboration, and individuals may struggle to find reliable partners for initiatives that could uplift their circumstances.

5. Poverty of Institution – Institution of Trust Capital

Closely related to interconnectedness is the poverty of institutions, where the very structures meant to foster trust and facilitate collective action are weak, corrupt, or non-existent. Institutions—be they government agencies, legal systems, financial bodies, or community organisations—are the backbone of trust capital. If these institutions are not perceived as fair, reliable, or transparent, or if they are riddled with corruption, they fail to build and maintain trust. 

This undermines the ability of individuals and groups to engage in long-term planning, secure contracts, or seek redress, trapping them in a cycle of instability and risk. Without strong, trustworthy institutions, even well-meaning efforts to alleviate poverty can falter.

Related: Elevate Your Life with a Strong Personal Core

6. Poverty of Inter-Innovation – Capacity of Common Growth

Poverty can also be understood as a poverty of inter-innovation, a diminished capacity for common growth due to a lack of shared vision, collaborative problem-solving, and adaptive learning within a community or nation. This isn't just about a lack of new ideas, but a systemic inability to translate ideas into shared progress. 

When there’s no mechanism for diverse groups to co-create solutions, learn from failures, and collectively adapt to changing circumstances, the potential for sustainable development is severely limited. This can manifest as communities that are stuck in outdated practices, unable to harness new technologies, or unwilling to experiment with novel approaches to age-old problems, thereby limiting the opportunities for everyone to grow together.

7. Poverty is Systemic

Let’s not pretend this is just individual failure. Poverty is baked into systems—bad governance, corrupt institutions, poor infrastructure, unjust education systems, etc.

For example, I’ve met brilliant young people in rural Sabah or even in inner-city Klang who could be AI engineers or startup founders—but they’re locked out by poor schooling, lack of transport, unsafe homes, or a broken system. We need systems-thinking and restorative leadership—people who don’t just help the poor but fix the systems that keep people poor.

This is part of my mission for the second part of my life—to create restorative businesses and incubators that don’t just generate profit, but generate opportunity. To build ventures that rewire access to education, jobs, and dignity. To prove that business can be a vehicle for justice, not just growth.

8. Poverty is Spiritual

At its deepest level, poverty is a disconnection from purpose. Many people living in poverty do not believe they matter, or that their lives carry meaning. This is the spiritual poverty that afflicts even the wealthy. I've met CEOs, celebrities, and millionaires who are spiritually bankrupt. They have wealth, but no joy. They have followers, but no deep friendships. They are surrounded by people, yet feel alone. So poverty is not just in slums. It can sit in skyscrapers.

These are but a few types of poverty that we can see around it. Global researchers have actually studied the problem from multiple angles, leading to the creation of the Multidimensional Poverty Index (MPI).

Data-backed reality: The multidimensional poverty index (MPI)

The Multidimensional Poverty Index (MPI), looks at multiple deprivations—in education, health, living standards, access to water, and more. It reflects what real poverty feels like—not just what’s in your wallet. As of 2023, over 1.1 billion people are multidimensionally poor globally. More than half are children under 18.

I remember meeting a young boy named Doyo in Sabah. He lived in a wooden house on stilts with no running water. When I asked him what he wanted to be, he paused, then said softly, "Saya pun tak tahu… saya tak pandai macam orang lain." (I don’t know… I’m not smart like others.)

This wasn’t just economic poverty. It was poverty of identity, of belief, of love. We got him into a MAD Club and paired him with a mentor. Over time, that boy began to dream again. Today, he's in a polytechnic and helping younger kids in his village. That to me is what transformation looks like. Not handouts—but restoration.

The Opposite of Poverty

The opposite of poverty isn’t wealth. It’s flourishing. It’s people living with dignity, purpose, and connection. That’s what we at Leaderonomics and MAD are fighting for—not just to reduce poverty, but to build communities of love, where every child, adult, and leader flourishes. If we want to eradicate poverty, we must:

• Change mindsets (through education and inspiration).
• Rebuild relationships (through community and trust).
• Reform systems (through justice and bold leadership).
• Restore purpose (through faith, calling, and identity.

Poverty isn’t a money problem. It’s a human dignity problem. And we must solve it as humans—not just economists.

So what are the root causes of poverty? That’s the real question we should all be asking (so we can do something about it). Because until we understand the roots, we’ll keep plucking leaves and wondering why the tree keeps growing back.

Because poverty isn't caused by one thing. It's a web, a complex ecosystem of interlocking factors that reinforce each other. So, let’s dissect this with both intellect and heart. Based on research, I believe, especially in Malaysia (and possibly in other developing countries), we have 7 core root causes of poverty in our communities.

1. Broken Systems and Poor Governance 

Let’s not sugarcoat this. Most poverty in communities stems from institutional failure—corruption, inefficient bureaucracy, lack of infrastructure, and policy neglect. When public money meant for roads, schools, or hospitals is siphoned off, it becomes a poverty accelerator. Roads remain dirt tracks. Clinics stay empty. Schools fall apart. And the community stays trapped.

Malaysia Challenge: In many parts of East Malaysia (and even in part of Peninsula Malaysia), despite being resource-rich (timber, oil palm, even minerals), poverty thrives because systems of delivery are broken or compromised by patronage politics. 

What can we do to clamp down on leakages and corruption that create these vicious poverty cycles? In your space, you can make a difference:

• Are you voting and holding leaders accountable? Don’t sell your vote, demand transparency, and use your voice against corruption.
• Are you supporting watchdog movements and independent media that expose leakages, mismanagement, and injustices?
• What else can you do?

2. Inequality of Opportunity 

Imagine two kids. One is born in Damansara Utama in PJ, the other in a rural kampung in Sarawak. One has iPads, after-school tuition, and a well-paid tuition teacher. The other? A shared textbook, a demotivated teacher, no broadband or limited tech exposure. Can you really tell me that both have equal chances in life?

Access to quality education, healthcare, and safety determines trajectory. When these opportunities are unequally distributed—even subtly—poverty is not an accident. It's a consequence. Is there something you can do to help these kids with inequality of opportunity?

The gap between a child in PJ and one in rural Sarawak (or even parts of Perak) is unfair—but bridgeable.

• Sponsor or volunteer to mentor underprivileged kids. One hour a week can change their trajectory. If you don’t know where to start, look up MadForGood.
• Support rural schools with resources (laptops, internet, books) through NGOs or your own networks. If you don’t know where to start, contact the MAD Movement team.

Related: Volunteerism Can Help to Cure Your Stress and Depression

3. Cultural and Generational Mindsets 

Now, here’s a tricky one—and I say this with love and nuance. Sometimes, poverty is inherited not just economically, but psychologically. When a child grows up hearing "orang macam kita tak boleh berjaya" ("people like us can’t succeed"), that belief becomes a prophecy.

It’s not that people are lazy. It’s that years of marginalisation, failure, and trauma create learned helplessness.

This is why Leaderonomics’ MAD Clubs and youth programmes focus on reshaping identity and negating what we call intellectual character. Because transformation starts with belief. But what can you do? Is there something you can do to help young people fix this inherited “disease”

Breaking ‘learned helplessness’ requires role models and encouragement. Can you:

• Mentor a young person from a marginalised community, showing them new possibilities.
• Share stories of success from people “like them” so they start to believe a different future is possible.

4. Disconnection from Power & Networks 

Ever notice how the rich always know someone who can open a door? Poverty often stems from relational disconnection—no access to influential people, decision-makers, or even simple mentors. The poor are excluded from decision-making and often don’t have a voice in shaping the future of their own communities.

That’s why community organising and grassroots empowerment are so critical—not just charity from above, but leadership from within. Can you do something to help someone with no connection or power networks be connected? This simple act could unleash significant change in that person’s life. Can you be the bridge:

• Introduce someone from a poor community to opportunities (a job interview, a scholarship, a training course).
• Join or support community organisations that amplify voices of the marginalised, giving them platforms to lead, like TBN or the Malaysia Generosity Circle (MGC).

5. Economic Dislocation & Globalisation Side Effects 

Here's a paradox: globalisation has lifted millions out of poverty—yet also created pockets of extreme deprivation. Factories move, economies shift, and people get left behind. Entire towns in rural Malaysia, the Philippines, or even the American Midwest are hollowed out when industries disappear. Without retraining or retooling, people fall through the cracks.

Job loss + no re-skilling = intergenerational poverty.

What can you do about this? When industries vanish, people need help to reinvent themselves. Can you:

• Support retraining programmes or micro-enterprises by buying from small local businesses.
• Offer your expertise—teach digital skills, business basics, or financial literacy to workers displaced by economic shifts.

6. Health and Environmental Disasters 

Poor health doesn’t just result from poverty—it also causes it. A medical emergency can wipe out a family's savings. Chronic illness can derail schooling or jobs. Add climate change into the mix—floods, droughts, pollution—and you get environmentally-triggered poverty. Entire fishing villages in Sabah are struggling today because fish stocks have declined due to overfishing and warmer waters. Poverty often worsens when health collapses or the environment breaks down. What you can do:

• Contribute to or volunteer with mobile clinics and health NGOs that serve poor rural or urban families.
• Join local sustainability efforts—mangrove planting, flood mitigation projects, or community recycling—to protect vulnerable communities from climate shocks.

My good friend, Zainal Abidin Jalil, decided to use his own funds and resources to help build Doctors Across Borders clinics in numerous places to support these communities. Each of us can play a small role and if everyone works in their small ways, huge things happen.

7. Spiritual and Purpose Disconnection 

This is the invisible killer—the poverty of meaning. When people don’t believe their life has value or their work has purpose, they stop dreaming. This disconnection from identity, purpose, and God-given dignity creates apathy and stagnation.

A community without vision becomes a community without movement.

This is why in everything we do—whether at MAD Movement or in our incubators—we start by restoring identity and purpose. Not just giving skills or jobs. Because when people believe they are made for more, everything changes. Can you drive hope which is the fuel of transformation in people? Without it, poverty persists. What you can do:

• Walk alongside someone in despair. Listen, encourage, remind them they matter. Sometimes dignity is restored by presence, not money.
• Invest in programmes that restore identity and purpose—youth clubs, faith-based initiatives, counselling, and leadership camps.

A Root System, Not a Root Cause

Let me put it visually: poverty is not a single root—it’s a tangle of roots wrapped around each other. Pull one, and the others resist. That’s why poverty persists—it's adaptive and sticky.

That’s also why quick fixes don't work. Handouts might relieve pain, but they rarely solve the structural, cultural, and personal roots of poverty. This is part of the reason I have also decided to join the TBN team to help root out poverty in Malaysia, little by little.

A True Story: Lina in a PPR Kampung 

When we ran a youth leadership program in a low-cost flat area, I met a 17-year-old girl, Lina. Her family survived on RM900 a month. But she was sharp—could code, write, and lead discussions. What was holding her back wasn’t talent, but belief.

Her parents discouraged her from applying to university: “Tak payah susah-susah. Jaga adik saja.” (No need to struggle. Just take care of your siblings.) We paired her with a mentor. She got into a scholarship program. And last I heard, she’s working at a startup—the first in her family to go beyond poverty.

It wasn’t just a programme for us. It was someone untangling her roots.

Final Thoughts: What Can Be Done

The root causes of poverty are not random. They are maintained—often unintentionally—by our silence, our systems, and sometimes, our own indifference. But the reverse is also true: poverty can be broken—when people, communities, and leaders decide to change the root system.

This must begin in Malaysia, our home. We cannot be content with skyscrapers rising in KL while children in Sabah go to school barefoot or Orang Asli families live without clean water. Poverty anywhere in our nation weakens us everywhere. If Merdeka was about freedom from colonial rule, then the next frontier of our independence must be freedom from poverty.

So, what can you and I do? Change always begins small, but small changes compound into transformation:

1. Mentor or sponsor one child: Help them dream bigger than their circumstances.
2. Adopt a community: Orang Asli villages, PPR flats, or rural schools. Bring dignity, not just donations.
3. Demand accountability: From leaders, institutions, and even ourselves. Corruption is not abstract; it is stolen school roofs, stolen medicine, stolen futures.
4. Create inclusive networks: Open doors for someone who doesn’t ‘know the right people’. A connection can change a life.
5. Shift your mindset: See the poor not as helpless, but as partners in rebuilding Malaysia.

Governments must reform, companies must invest responsibly, NGOs must innovate—but none of this will matter if ordinary Malaysians shrug and move on. The power of change lies not just in Putrajaya, but in your living room, your office, your choices.

The opposite of poverty is not wealth; it is flourishing. It is every Malaysian child believing, “Saya pun boleh berjaya.” It is Orang Asli families with clean water. It is young leaders from PPR flats shaping startups and policies. It is communities restored to dignity, hope, and purpose.

This is not idealism. It is a call to action. If each of us lifts just one person out of poverty, Malaysia can be a nation where no one is left behind. Let us not wait for someone else to solve it. Let us begin—listening, healing, building—until flourishing becomes the story of Malaysia.

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