The government, by sticking to its subsidy rationalisation plan, will send the very poor - in particular young bumiputeras - back to the 1970s standard of living, PKR vice-president Nurul Izzah Anwar warned today.

The government’s poverty alleviation measures are off the mark as household debt has risen to an alarming 1.4 times the national income, she said.

This means that even those earning above RM700 a month - the poverty indicator - are borrowing heavily and cannot cope with inflation and purchase or rental of houses, transport and other essential items, she told a press conference today.

“We are not Zimbabwe, but at the same time, it is very imprudent and irresponsible of the government to ignore the facts on poverty.”

In 2009, Zimbabwe had to abandon its currency due to hyper-inflation after it hampered the country's productive capacity. The government then seized private farms.

Nurul Izzah cited a report released by Universiti Malaya's Prof Fatimah Kari last month, which warned that Malays and bumiputeras would have the bleakest future if subsidies are withdrawn.

Also, investment banks such as Merrill Lynch have predicted that Malaysia will be “young and poor” by 2030, compared with the other countries in the region, she noted.

She said this is because salaries, as a percentage of GDP, are due to slip to 21 percent by 2020, from 28 percent currently.

"BR1M (Bantuan Rakyat 1Malaysia) will not save the people from the impending poverty trap," Nurul Izzah said.

Najib had, last week, lobbied private companies to hire more bumiputeras, younger workers and women.

He said that, even as the government aims for developed country status by 2020, the people's income must remain central to this.

Nurul Izzah said the government must do more than plead with the private sector to increase salaries.

"To identify these high-risk groups, PKR suggests that the government starts using the Multidimensional Poverty Index. It measures a person's (needs) from different dimensions of health, education and living standards.”

Nurul Izzah also said that studies have shown that the withdrawal of fuel subisidy alone will see urban poverty among bumiputeras rise by as much as  37.5 percent. In rural areas, as much as a quarter more (23.3 percent) will become destitute.

They are 'high-risk' groups because with almost no savings, these bumiputeras - who make up to 66 percent of the population - will not survive a natural disaster or death of the breadwinner, she said.

If Malaysia wants to call itself a developed country by 2020, its wages must also match those of Singapore and South Korea, which stand at 42-46 percent of GDP, she added.

‘Poor returns’

Also sounding the alarm bell was PKR strategy director Rafizi Ramli, who said that, while the government could not afford subsidies, it had wastefully handed out RM1.15 billion from 2009 to 2013 on futile research and development efforts.

Citing figures from  annual report and the Auditor-General’s 2013 survey, Rafizi said RM900 million went to science, technology and innovation funds; RM246 million to 'commercialisation' of R&D funds; and RM6 million to technology-acquisition funds.

Later this week, he plans to disclose in detail how the Science, Technology and Innovation Ministry’s efforts have has yielded little.

Rafizi also said the government has failed to provide jobs through its R&D spending.

"We are still only attracting low-cost and low-tech industries. The high-tech ones continue to go to Singapore," Rafizi said, noting this is probably because the workforce cannot cater to the requirements of such companies.

" ... minister Ewon Ebin said that only 20 R&D efforts become commercial every year. He admits that this is low and has set a new target three times higher, for 60 commercial projects.”