KUALA LUMPUR, Aug 22 — Prime Minister Datuk Seri Anwar Ibrahim today rejected allegations that the government's targeted initiatives have been so focused on the country’s bottom wage earners that it has neglected the middle income tier.

Bottom wage earners in Malaysia are categorised as B40, while the middle income earners are M40.

But Anwar, who is also the finance minister, conceded that it is worrisome that there exists a disconnect between the highest and lowest income groups after decades of independence.

"Because those at the lowest feel neglected and thus they will seek out racial and narrow religious issues as a form of salvation,” he said in his speech at the iTekad collaboration ceremony at Sasana Kijang here.

iTekad is a patron programme created by Bank Negara Malaysia (BNM) with the aim of helping low-income micro-entrepreneurs strengthen financial management and business intelligence towards generating continuous income.

Each iTekad programme combines the provision of business assets financed by social finance instruments ― including donations, social impact investments, zakat (alms) and cash waqf (charitable endowment) ― with microfinance, along with structured financial and business training.

Anwar expressed optimism that the issue will not persist unless one has the boldness to act firmly.

He gave the Maktab Rendah Sains Malaysia (MRSM) as an example, where the benefits toward the hardcore poor are minimal.

"Meritocracy in education is important but it is not the only criteria in a fair governance.

"There is a need to combine them... but of course there must be meritocracy or else how would we bring up the best amongst us, but if our obsession is just with meritocracy alone, then there is no need for iTekad, then let us just compete.

"So definitely iTekad has got to do with affirmative action,” he said.

In an interview with US broadcaster CNBC aired yesterday, Anwat said affirmative action policies should extend from race-based to need-based.

He added that there is a need to balance between meritocracy which is heavily emphasised by those capable and affirmative action or "Bumiputeralism”.

In the CNBC interview, Anwar said it was not an issue of dismantling Malay rights and Bumiputera privileges, but focusing on areas which are important to them through affirmative action policies.