KUALA LUMPUR (Sept 23): The Covid-19 pandemic has exposed pre-existing gaps in Malaysia’s social protection system and it is now an opportune time for reforms, according to the Khazanah Research Institute (KRI).
In a statement today in conjunction with a virtual webinar for the launch of KRI’s latest report Building Resilience: Towards Inclusive Social Protection in Malaysia, it said most of the current social assistance programmes are short-term buffers that lack legal and sustainable financial commitments.
“This has resulted in unsustainable programmes, of which many are small and fragmented, often with irregular and inadequate benefits. While social insurance schemes provide some protection for workers, their reach is limited to formal sector workers,” it added.
KRI said that in recent years, policies have shifted to target the bottom 40% (B40) households and not just the poor, but noted that this requirement remains arbitrary.
“Previous studies by KRI showed that social protection policies will matter to at least 70% of households, as they are vulnerable to fall into poverty due to unexpected shocks and many face trade-offs in their consumption,” the research institute added.
KRI called for a social protection floor based on the life cycle approach, where policies are designed to provide a social protection floor throughout an individual’s life span.
Policies proposed by the report include:
- Investing in a universal child benefit
- Expanding the mandatory coverage of existing social insurance schemes for the working-age population
- Establishing a social insurance pension for the elderly
- Progressive realisation of proposed policies
- Building a national social security institution and a unified registry
KRI chairman Tan Sri Nor Mohamed Yakcop explained that the life cycle approach must begin by providing access to health care for pregnant mothers, and a conducive environment supportive of physical and mental health for every child and adolescent in their schooling years.
“During the working-age period, workers must be covered by social security to assist them in cases of income loss from accidents at work, or death or retrenchment.
“In the retirement phase, the pension and social protection system should ensure that all senior citizens can live in dignity and reasonable comfort,” he said.
Nor Mohamed urged the nation to learn from the lessons it faced during the Covid-19 pandemic and strive to improve its existing social protection system moving forward.
“We need to ensure that every Malaysian is included in the national social protection system, such a way as to be able to fulfil his or her basic needs, especially when suddenly faced with financial difficulties.
“We want to prevent anyone from falling into the poverty trap during difficult times,” he added.
In addressing any pushback regarding the timeliness of the proposal, KRI senior advisor Dr Jomo Kwame Sundaram deemed that this is the precise moment to propose the social protection reforms.
“People might say this is the worst time to do something like this, it is so expensive, ambitious, so on and so forth.
“However, it is precisely this moment when there is a shared sense of vulnerability throughout the nation, or in fact arguably throughout the whole world, that we recognise the need for this kind of social provisioning,” he said.