In 1970, Malaysia was predominantly a rural agricultural society with sharp spatial and ethnic disparities in income and social well-being. It set for itself an ambitious development goal of eradicating poverty. In just about 15 years from 1970, when half of all households were poor, Malaysia more than halved the incidence of absolute poverty.

In another 15 years from the mid-1980s, Malaysia again more than halved the level of absolute poverty. By the early years of the new millennium (2002), just 5.1 per cent of households were poor. With this track record, Malaysia can be classified as a success story in attacking absolute poverty, enabling it to reach the MDG target of halving poverty well before 2015.

Malaysia is now close to having eradicated extreme poverty. How was this rapid progress achieved? What were the policies and programmes? How were constraints overcome? What are the lessons that can be learnt? This chapter presents Malaysia’s record of achievements in overcoming poverty and the challenges remaining for the future.