Thanks to its persistent pursuit of an economic development strategy linked to social equity, Malaysia is recognized internationally as one of the countries with outstanding achievements in poverty reduction. Not only has Malaysia achieved the Millennium Development Goal on poverty reduction ahead of schedule, but it has also built a sustainable poverty reduction model adapted to the modern development context.
Malaysia is recognized internationally as one of the countries that has achieved outstanding results in poverty reduction, particularly in developing countries. With a consistent, long-term approach that places people at the center, Malaysia has rapidly achieved important goals in eradicating poverty and improving the quality of life for its people.
According to assessments, Malaysia was one of the first countries to achieve Millennium Development Goal (MDG) 1 – halving the poverty rate – ahead of the 2010 deadline. Extreme poverty has been virtually eradicated, with the percentage of people living on less than US$1.25 per day close to zero. Even with the US$2 per day poverty threshold – the standard commonly used for middle-income countries – Malaysia's poverty rate remains very low. This achievement reflects the effectiveness of the inclusive economic development model that Malaysia has consistently pursued for decades.
Alongside economic development, Malaysia places a strong emphasis on investing in education , training, and human resource development. Education is considered a key tool to help the poor improve their skills, expand employment opportunities, and escape poverty sustainably. The government allocates a significant portion of its budget to education and vocational training, while also encouraging entrepreneurship and developing microcredit to support people in creating their own livelihoods. This approach helps reduce reliance on subsidies, increase self-reliance, and improve the adaptability of workers to market fluctuations.
A notable highlight in Malaysia's poverty reduction strategy is the "smart village" model – a solution aimed at comprehensive and sustainable rural development. Smart villages are planned in a coordinated manner, integrating housing, education, vocational training, community living spaces, and sustainable agricultural production systems. Residents are not only guaranteed basic living conditions but also gain stable income from production, services, and the digital economy.
In smart villages, information technology infrastructure is heavily invested in, enabling residents to access high-speed internet, online education services, telemedicine, and e-commerce. Farmers can apply new technologies in production and access larger markets, while public services are provided quickly and conveniently. This is a crucial step in narrowing the development gap between urban and rural areas, while also mitigating the risk of renewed poverty.
Since 2019, the Malaysian Ministry of Rural Development has collaborated with domestic and international partners to implement numerous digital transformation initiatives for rural areas. These programs focus on enhancing people's digital skills, expanding access to technology, and building a digital economic ecosystem within village communities. Initial pilot models have proven effective and are being expanded nationwide.
Malaysia's success in poverty reduction also stems from its multi-sectoral, holistic approach and broad societal participation. Alongside the leading role of the government, the private sector and civil society organizations are encouraged to participate in providing services, creating jobs, and supporting communities. This coordination creates a multi-tiered support network, ensuring that poverty reduction policies are effective and have a widespread impact.
The experience of Malaysia shows that sustainable poverty reduction can only be achieved when closely linked to economic development, investment in human capital, and rural modernization. Instead of focusing solely on immediate support, Malaysia chose a path of creating opportunities, enhancing capabilities, and empowering its people. This is a valuable lesson for many developing countries in formulating poverty reduction policies that are integrated with inclusive and sustainable development.