Trends in Poverty and Income Inequality in Urban Malaysia: Emerging Issues and Challenges

Malaysia has experienced rapid urbanization and infra structure development during the past few decades. Objective of this study to assess the nature of poverty and income inequality in the urban areas in Malaysia. The study also aims to focus on the emerging issues and challenges of rapid urbanization and urban poverty in the country. Secondary data were obtained from the Economic Planning Unit (EPU), Malaysia and the Department of Statistics, Malaysia. The analyses show that though the rate of urban poverty followed a declining trend during the last few decades, incidence of poverty and hard-core poverty still exists in the urban areas of the country. It was also found that earnings of the urban dwellers increased gradually during the past few decades. But income inequality in urban localities remained wider (Gini coefficient is, on average, 0.453). Moreover, income disparity among the major ethnic groups (Malays, Chinese and Indians) in the country is greater and sizeable. The continuation of urbanization, urban poverty and income inequality bring forward new issues and challenges. Therefore, to handle these issues and challenges, it is urgently required to identify the effectiveness of specific programs as well as design and best practice of urban poverty reduction programs and policies.