Tun Daim Zainuddin, who heads the Council of Eminent Persons, has said the government is considering setting up a fund that will act as a social safety net for the poor. It will replace 1Malaysia People’s Aid (BR1M) that was started by the Barisan Nasional government. Daim was quoted by the media as saying that the proposed fund will invest in assets, with the returns to be distributed as basic income to those eligible each month instead of a one-time payout.
This seems to be a move to reform the country’s public aid system to make it more needs-based. Prime Minister Tun Dr Mahathir Mohamad has already indicated that some handouts, such as cash bonuses and paid haj pilgrimages, could be removed.
The proposed fund is a step in the right direction. First, once it has grown to a certain size, it can be self-sustaining. Second, the recipients can be assured of the continuity of such a social welfare programme regardless of which political party is in power.
That said, while the intention is good, the execution is always an issue, as past examples have shown. For example, while there are many government-linked investment funds, one may wonder what their investment mandates are.
It is vital to ensure proper governance and transparency in running the proposed fund so that it will not become another vehicle to to bail out cronies and loss-making government agencies.