The government's special fund to assist the hardcore poor has not achieved the desired results over the years due to inefficiency and failure to identify the right target group.

Scholar Prof Chamhuri Siwar said although the country has been successful at poverty alleviation in general, several impact studies reveal "leakages" related to implementation of the hardcore poverty alleviation scheme.

He cited a study by Universiti Kebangsaan Malaysia (UKM) on the impact and effectiveness of the development fund to alleviate hardcore poverty, known by its Malay acronym PPRT.

Chamhuri, a principal research fellow with UKM's environment and development institute, said the study had concluded that the household income of participants increased by 182 percent after participating in PPRT programmes.

However, the study also noted a significant proportion of the increase (73 percent) was contributed by non-PPRT sources like remittances, wages and participation in other schemes.

At the same time, the unemployment rate increased by 2.8 percent among the 5,730 participants.

"The study found that the delivery system still suffers from weaknesses, including the lack of updated and reliable data, and delays in receiving allocations for PPRT projects and programmes at district levels," he told some 250 participants at a seminar in Kuala Lumpur yesterday.

"There is also a lack of sustainability of PPRT projects - 86 percent of the PPRT beneficiaries still depend on the government to overcome poverty."

Problems identified

The study stated that the positive impact of Amanah Ikhtiar Malaysia (AIM) - a micro-finance service that provides loans to the rural poor - was higher than that of the PPRT programme.

Chamhuri said poverty alleviation programmes generally experienced "leakages that were siphoned off to non-poor and non-deserving areas and programmes" and there were also duplication of functions by various agencies which have rendered the programmes less effective.

The PPRT was launched in 1988 as a specialised programme and delivery mechanism to extend basic needs to the hardcore poor. It concentrates development in the poorest states, districts and remote villages and identifies the target group as the hardcore poor.

The hardcore poor are defined as households with incomes below the poverty line income of RM175 a month (in 1990). PPRT programmes and projects are classified under agriculture, village or rural industries, crafts and small businesses.

A scandal broke in 2001 when ex-rural development minister Azmi Khalid (now home minister) lodged a police report on the misappropriation of RM40 million from the PPRT.

Annuar Musa, who had held the ministerial portfolio before Azmi, was investigated in relation to the complaint.

Inefficient methodology

AIM managing director Prof Sukor Kasim said the PPRT methodology undermines the number of eligible poor households, allowing non-poor into the programme at a higher rate compared to the AIM programme.

"PPRT uses only household income and assets in determining eligibility, while AIM uses both (these criteria as well as) remittances, and counter-checks against household assets and productive assets, which contribute to determine actual poverty of the household."

The AIM has also found that empowering poor women with micro-finance services is the easiest, quickest and most cost-effective mechanism toward poverty reduction, based on more than 18 years of banking on the rural poor.

"Poor women are more bankable than their specie counterpart, while the returns to investment are 15 times higher; the level of losses is negligible among female members," Sukor said.

Universiti Malaya economics and administration faculty associate professor Dr Sulochana Nair agreed that the PPRT has not been effective in addressing hardcore poverty due to weaknesses in project identification, planning and implementation.

"The majority of household targeted as beneficiaries of the PPRT programmes remain in poverty and those who have managed to move out of poverty have done so due to the availability of employment opportunities outside the PPRT programmes," she said.

She urged the government to recognise the need for new approaches, ideas and policies to tackle the problem, as poverty reduction efforts have been lacking in focus.

Noriyah Ahmad, senior director of the Economic Planning Unit's distribution section, said poverty eradication will continue to be one of the main items on the national agenda, but that its success will rely on strong political commitment.

She said the government will improve its monitoring system and strengthen inter-agency co-ordination to meet new challenges.

The day-long seminar on 'poverty eradication through empowerment' was jointly organised by Friedrich Naumann Foundation, Malaysian Institute of Economic Research and Era Consumer.