The previous generation of Felda settlers had enjoyed drastic social mobility but the government has failed to plan as effectively for the next generation, says a human development report. – The Malaysian Insider
The Malaysian Insider: Putrajaya fails to plan effectively for future Felda settlers, says report
By Anisah Shukry

Published 28 November 2014

The Federal Land Development Authority (Felda) schemes were a success in lifting the Malay rural poor out of poverty but the second generation of settlers are struggling to improve their lot in life due to the government's failure to plan effectively for them, according to a case study by the Malaysia H‎uman Development Report 2013.

After breaching the poverty threshold, the challenge now was to gain upward mobility, but the lack of new economic opportunities and the remote locations of Felda settlements meant the next generation of settlers were cut off from urban growth centres, said the report which was commissioned by the United Nations Development Programme and launched in Kuala Lumpur earlier this week.

The second generation's climb up the economic ladder was also hindered by limited "social capital", or the network of social relations of the previous generation, said the report.

It said that this left them with only one option if they wanted to improve their livelihood: gain better education and leave the Felda scheme to work somewhere else.

"A failure to plan effectively for the second generation of new economic opportunity within the proximity of this land scheme, located far away from urban growth centres, have placed great constraints on ‎their chances of experiencing as rapid a pace of social mobility as the previous generation," read the report.

The previous generation – the first Felda settlers of the late 1950s and the 1960s – had enjoyed "drastic social mobility"‎, as they graduated from poverty to middle-class status, it said.

The first generation had entered into the Felda land scheme as peasants, but became middle-class once their crops matured for harvesting.

State sponsorship of land, subsistence allowances, agricultural inputs and production supervision had triggered the drastic social change among the early settlers.

The government had also provided "socio-cultural" inputs to help them adapt to the move from traditional villages to a large scale land development scheme.

But the report said the government had not planned as effectively for the next generation to climb any higher up the economic ladder.

‎"This state-sponsored land development approach has ensured that settlers entering the land scheme would experience drastic social mobility within the same generation... However, the possessed social capital, as reflected in their generally low levels of education and motivation to work, does act as a constraint to their social mobility.

"This limited social capital of the family would put greater constraints on the second‎ generation family as gaining better education and migration out of the Felda scheme to work elsewhere became their only salvation in life."

But the report noted that Felda settlers had "considerable" political power, and their criticism over the status quo had influenced the government to redefine its development approach and strategies.

Felda has diversified its economic activity through Felda Global Ventures (FGV), which it listed in June 2012, and the Felda Investment Corporation (FIC), which conducts non-plantation-related investments

FGV is the world's largest producer of crude palm oil and third largest plantation operator by hectarage, but has been struggling of late with falling commodity prices.

The Felda case study was one of three other studies cited in the Malaysia Human Development Report under the chapter on social mobility in Malaysia.

Three other case studies were done on Indian plantation workers, coastal fishermen and the urban poor.

For Indian estate workers, the report stated that the only way individuals in this group could escape the "inherited poverty of their parents" was to migrate out of the plantations to urban areas. Even then, success was not immediate – only the offspring of this migrating cohort had better chances of upward mobility if they obtained education and access to jobs.

Among coastal fishermen, the groups that experienced the worst downward mobility are fishermen themselves and manual labour workers, compared to those who are also in business. The report stated that fishermen were unprepared without education and other skills to adapt to Malaysia's shift from an agrarian society to an industrial one.

The urban poor, meanwhile, faced similar challenges of improving their living standards regardless of their ethnic group, although the Chinese did record a higher percentage in the upwardly mobile group compared to Malays and Indians overall.

The report, which was published by the UNDP and sponsored by the global development network and the Economic Planning Unit which is under the Prime Minister's Department, made several suggestions for the government to help low-wage earners and the poor move up in wealth.

Among these was a suggestion to have "growth centres" linking villages to urban areas so that employment opportunities and structures could be expanded, and for institutional support to be given for the poor migrating from rural to urban areas.

The report was written by Tan Sri Datuk Dr Kamal Salih, an adjunct professor of Economics and Development Studies at Universiti Malaya (UM); Dr Lee Hwok Aun, from the UM Department of Development Studies; and Dr Muhammad Khalid of the Khazanah Research Institute. – November 28, 2014.

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