improve as the economy continue to grow rapidly.
However, during the 1991-1995 period, the reduction in absolute poverty was no longer accompanied by the reduction in income inequalities. As shown in Table 4, the mean household incomes was increasing in both rural and urban areas as well as among the major ethnic groups in Peninsular Malaysia. However, the differential rates of income growth among income groups and between strata has resulted in increase in income disparities during the 1991-5 period. This is shown by the increase in the value of the Gini coefficient for the whole country from 0.445 in 1990 to 0.456 in 1993 and 0.464 in 1995 (see Table 5). This development seems to be consistent with new evidence of rising income disparities in other countries in Asia including Thailand and China. It is most likely that the growing overall inequality in Malaysia is attributed to the growing gap between urban and rural household incomes. As shown in Table 5, the differential income growth between urban and rural households in Peninsular Malaysia has also resulted in an increase in the rural-urban disparity ratio, i.e. from 1:1.70 in 1990 to 1:1.75 in 1993 and 1:2.04 in 1995.
In addition, little progress has been made in reducing regional imbalances. This experience seems to suggest that poverty alleviation can continue with economic growth, but income inequalities tend to worsen without effective redistributive interventions.
