This article first appeared in The Edge Malaysia Weekly on May 17, 2021 - May 23, 2021

GOVERNMENT cash aid has made a difference to a number of Malaysia’s poorest urban families struggling to survive the hardship brought about by the Covid-19 pandemic the past year, but policymakers need to provide them with more financial certainty to ensure that the country does not lose a sizeable chunk of young human capital to poverty and witness greater inequality.

“The short-term responses (cash transfers) that the government provides through BPN (Bantuan Prihatin Nasional) and BPR (Bantuan Prihatin Rakyat) are absolutely critical and feedback from the families [surveyed] shows this grinding mental health impact [was due to] uncertainty and insecurity [over finances]. I think we have to end that now. We have to offer these families a longer-term guarantee of financial security,” says Stephen Barrett, chief of social policy at Unicef Malaysia, at an online discussion on May 11 in conjunction with the launch of the fourth and final instalment of the “Families on the edge” report by the United Nations Children’s Fund (Unicef) and United Nations Population Fund (UNFPA) that was produced in partnership with Malaysia-based public policy research outfit DM Analytics.

Elaborating on findings in the report, Barrett says many representatives of households living in Kuala Lumpur City Hall (DBKL) Projek Perumahan Rakyat (PPR) low-cost flats surveyed in February and March this year were concerned about their future and had expressed a strong need for continued, regular and reliable financial assistance. He adds that “recurrent unpredictable support keeps them in a holding pattern but does not provide the financial and mental security the families need”.

“The initiatives that these families have shown [are clear to researchers] — they have diversified their income sources, they are trying their level best to work their way out of this crisis. I think they just need that regular, reliable support through the mainstream social protection system (not one-off uncertain cash transfers) and that gives an exit strategy for these emergency Covid-19 supports. We need to provide them with a ladder out of the situation,” he says.

“The impact of financial security on mental health is well established at the international level. We’ve seen the impact of that insecurity on mental health here. When it comes to children, it translates to underperformance in school. Children cannot learn effectively in school if their mental health is suffering. We’ve got to give these families the security,” Barrett elaborated, highlighting the gravity of the mental burden faced by the lower-income group after more than one year of battling the hardship caused by Covid-19 as well as the potential cost to society and the country if measures are not taken to combat the situation.

He says countries that have the most successful social protection programmes and those that reduce child poverty most effectively do not see cash transfers as charity or handouts but as investment in families and children that make up the very fabric of society and the country’s future.

According to the report, some 71% of respondents believe they will require continued financial support over the next six months, and they expressed “a clear preference for a monthly allowance”.

Direct social assistance from the government now makes up 11% of overall household income, rising to as high as 19% among female-headed households and 36% among households headed by persons with disabilities. Almost 40% of respondents still need to use their savings to mitigate a reduction in income, despite one in three heads of households and four in 10 female heads of households depending on government assistance to deal with financial difficulties. Nearly half (47%) of the parents surveyed said their children’s mental state had been affected by the Movement Control Order (MCO) while two thirds (65%) told researchers they needed parenting advice. Some 44% continued to worry about their children’s education and whether they could earn enough to provide food for the family.

Dr Muhammed Abdul Khalid, managing director of DM Analytics, concurs that policymakers here need to make cash transfers regular and predictable as well as make sure their improved financial situation, education and health from better nutrition allow them to move up the social ladder: “Otherwise, in the long run, we will have a very unequal society because education is key to upward mobility. We will lose a big chunk of human capital, something that a multi-racial society like ours cannot afford.”

“This study dispels lots of urban myth — we keep hearing that the poor are lazy, don’t prioritise children’s education, or are simply financially illiterate, and thus shape the way we design intervention policies. For instance, we don’t want to give cash because we think they will abuse it, [so] we give them beras (rice); in fact one makcik said she received 80kg of beras [while others missed out].

“In the past one year, we tracked how these recipients spent the cash assistance they received, and a majority used it for two things: household expenses — mostly on food — and their children’s education. [There are] no widespread abuses. Give them cash; they know how to use it best. It is also good for the economy — their marginal propensity to spend is high, it pumps up private consumption. Let us stop believing that we know what is best for them; we don’t. They do,” Muhammed tells The Edge.

“We find that they work harder compared with the average Malaysian, and a majority of them have fewer than three children. They are resilient, caring and responsible,” he adds, dispelling the notion that the urban poor do not work hard or have too many children.

He continues to stress the importance of providing children with a balanced diet and the necessary nutrition to prevent stunting in growth and brain development.

Indeed, the survey found that PPR folks had reduced the money they spent on food by 9% on average in March this year compared with pre-pandemic times (2019) and researchers noted that “there was a sense among respondents that the price of food had increased, affecting their purchasing power”. While this instalment of the survey did not say whether PPR folks were still consuming a lot of instant noodles and eggs, the cheapest source of protein, a 41-year-old self-employed single mother known as “Ms S” was quoted saying this in the report: “We can only afford cheap vegetables. Then if we have extra money, we buy fruits.”

Muhammed also calls for policymakers to maximise the reach of TV in educating children in lower-income households. “Sixty per cent say [Education TV] works; only 40% say they have a problem [understanding] the content. Optimising TV until we can solve the issue of internet access and laptops [and devices] is among the quicker fixes to some of the problems they face [in educating their children away from school].”

Barrett says there is a need to re-energise public, private and civil society responses to minimise the risk of permanent damage from the Covid-19 pandemic. “When we started this study [in early 2020,] none of us expected to be talking about MCO 3.0 in 2021. With the rates of vaccine hesitancy that this study suggests, we are clearly not out of the woods … a lot of energy was invested earlier on but right now, it has turned into quite a protracted situation.

“We need to transverse from the innovation that took place in those early responses and inject that into a longer-term planning process so that we start addressing things like mental health, nutrition and education more sustainably and systematically going forward [because this study] tells us that if we don’t, it seems inevitable that the income disparity that existed prior to the crisis (Covid-19 pandemic) will widen and human and productive potential will be lost. Government agencies are well aware of that and we are confident that these things will be taken into account in the 12th Malaysia Plan as well as policies on children that are being developed.”

A total of 500 heads of households from 16 of the 56 PPR flats in Kuala Lumpur were interviewed between Feb 26 and March 12 this year for the socio-economic portion of the survey, with a 4.34% margin of error at a confidence level of 95%. The survey is designed to capture a sample of 25,096 households in low-cost flats under DBKL with heads of households aged 30 and above.

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