Comparative Analysis of Had Kifayah and Multidimensional Poverty Index as Poverty Measurement in Malaysia

Abstract

The measurement of poverty is an essential instrument for comprehending the socio-economic well-being of a nation’s population and devising effective strategies to mitigate it. Currently, zakat institutions in Malaysia rely on the Had Kifayah (HAK) method to categorise an individual's poverty status by classifying their asnaf status. On a larger scale, the establishment of the Multidimensional Poverty Index (MPI) presents an alternative method for assessing poverty, emphasising the non-monetary dimensions of deprivation that individuals may experience. This study conducts a comparative analysis of two distinct poverty measurement frameworks, namely, HAK and the MPI to assess their applicability and effectiveness in capturing the multifaceted nature of poverty in Malaysia. The study employed an extensive literature review and comparative analysis of the two different poverty measurement tools. The findings of this study contribute to the ongoing debate surrounding the choice of poverty measurement tools in Malaysia. It sheds light on the advantages and shortcomings of both Had Kifayah and the MPI in capturing the complex and evolving nature of poverty in the country. The study recommends that zakat institutions complement the HAK method by incorporating the MPI, which can effectively measure the degree of deprivation that an asnaf may encounter.