Question

Choose ONE (1) big macroeconomic issues in Malaysia.

i. Poverty

ii. Budget unsustainable (Fiscal Policy)

Discuss and present at least three questions about it:

i. Why is it important?

ii. What are its causes or the possible diagnoses of the problem?

iii. What is the appropriate policy to address this problem?

(Every one in my class have different country but mine is Malaysia. Should I answer this in general ignore country Malaysia?)

Answer 1

Introduction

Malaysia is one of the fastest growing countries among other South Asian countries. It sees rapid development of technology, infrastructure and other facilities and because of this the overall gross domestic product in the country has risen significantly over a period of time. In 2019. the estimated GDP was 370 Billion Dollars.

However, the problem of unemployment as well as poverty are wide spread in the country. This is because some sections of the society have not been developed as well as others.

Even though, the United Nations has praised the country back in early 2000's for their effectiveness in poverty reduction programs, the core reason as to why, poverty still exists is because of three categories of populations. Namely unskilled laborers which lack the required skills to be able to get a job in the market, the elderly which have not been able to get employment or other similar benefits, and single parent mothers who find it increasingly difficult to be able to earn money as well as taking due care of their family.

Case Specifics: -

1) Importance: -

The importance of poverty reduction takes place from the fact, that these households form a large part of any economy. Their ability to earn less restricts their access to education, health care facilities, nutrition and other similar benefits and their overall demand also reduces. This results in generations of people which do not have similar access and creates disparity in the country.

It is vital that any economy can maintain their living population in a manner that widespread poverty does not lead to lifestyle changes as well as low demand for goods and services. Thus, to elevate such people out of poverty is important for the economy.

2) Causes of the Problem: -

As indicated above, unskilled laborers form a major part of the population that live below the poverty line in Malaysia. These people find it difficult to get permanent jobs in the market and accordingly have never been able to gain from the economic problems that they are facing. Also, other categories such as old people and single parents are included in the same.

3) Policy Decisions to Solve the Problem: -

The only active manner in which poverty can be reduced among this group of people is to provide them with job opportunities as well as upskilling them and providing them with the required support so that they can learn more and become a part of the formal employment group. It is essential to provide their children free access to education which is primary in reducing poverty in any nation.

Providing free access to education would allow for next generations to be better in terms of their earnings. Old people must be catered to using tax collected money and should be provided with social security benefits which will allow them to live better lives.

All others must as indicate above, be upskilled as it would allow them to seek employment.

Please feel free to ask your doubts in the comments section.