In solidarity: The Kita Jaga Kita campaign encouraged households to raise their white flags to reach out for help at the height of the pandemic, with the community coming together to support one another. — AZHAR MAHFOF/The Star
COVID-19 is no longer a formidable threat. It has become a part of our daily lives and we have learnt to live with it. The memories of the days in lockdown slowly dissipate as we return to business as usual.
March 18, 2020, marked the first day of the movement control order when Malaysia locked down the economy to curb the deadly virus. The lockdown created a shock in the economy, and many lost their livelihoods.
I remember the fear that surrounded the nation, as well as the courage and strength of solidarity in caring for one another. The Kita Jaga Kita campaign encouraged households to raise their white flags to reach out for help, with the community coming together to support one another.
The government also responded by rolling out a wide range of social protection measures to help the people. We, as a nation, realised the need for resilient and dynamic social protection in the face of such an unprecedented pandemic and economic shock.
Four years on, have we made progress in developing a resilient and dynamic social protection system?
I would say, yes, we have progressed, but much remains to be done. The Malaysia Madani framework espouses “Social Protection for All” and aims to raise the social safety net to a minimum acceptable level, enhance the Employment Insurance System (EIS) and invalidity scheme, extend coverage of the Employees Provident Fund (EPF) and Social Security Organisation (Perkeso), and improve the income-generating capacity of the workforce.
The Padu database, intended to be an interoperable social registry, has faced criticism but still managed to register 10.6 million people before the system closed for new registration and updates on March 31, 2024.
The formulation of the first National Social Protection Policy, a crucial document to advance the “Social Protection for All” agenda, is currently in progress.
What does “social protection for all” mean?
In the report, Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for All, the World Bank lays out a strategy supporting a vision of universal social protection as a system that offers social protection for all, when and how they need it, while recognising that realisation of this vision will be progressive over time.
This vision is aligned with the 2030 Agenda for Sustainable Development. It does not mean that everyone will receive social protection or assistance (universal social protection is different from a universal basic income), but that everyone can access the system and receive help when they need it. Due to the diverse needs of people across the life cycle, the social protection system should extend coverage of a tailored set of instruments that enhance resilience, promote equity, and empower people to grasp opportunities.
These instruments – social assistance, social insurance, and labor and economic inclusion programmes – form the foundation of a social protection system. The journey towards a comprehensive system of support for all Malaysians will take time to be realised.
Why does it need to be progressive?
As in the case of any government expenditure, social protection policies and programmes face budget constraints and trade-offs.
The financing of more comprehensive social protection programmes will commonly require the mobilisation of additional tax revenue and/or savings from rationalisation of current programmes or subsidies.
This involves trade-offs with other spending priorities. An important issue to consider in the design of social protection programmes is the inevitable trade-off between coverage and adequacy: for a given budget, broad coverage of social protection programmes means a lower level of benefits, which reduces the adequacy (and impact) of that benefit for recipients.
Although Malaysia has a broad range of social protection programmes, recent analysis by the World Bank of national household data indicates that a key issue with current cash transfer programmes is the low adequacy of Malaysia’s tax-financed social assistance compared to other upper middle-income countries.
Progressive realisation involves first prioritising those who are most vulnerable and need support. This needs to be coupled with progressive improvements in building strong institutional capacities and delivery systems.
If I am not receiving benefits from social protection, why should I support the system?
Firstly, most Malaysians benefit from social protection through contributory schemes such as EPF and Perkeso, covering life contingencies such as old-age, and employment-related injuries.
Secondly, social protection promotes social cohesion and solidarity by helping the poor and vulnerable address life cycle risks and shocks, and to reduce negative coping strategies such as selling productive assets and removing children from school. Everyone benefits from this increased social cohesion.
Thirdly, well-designed social protection programmes support economic growth and reduce inequalities, and as such are an investment and not merely handouts. Studies have shown that there are multiplier effects of social protection programmes on economic growth, which include increased local consumption, savings, and enhanced human capital and productivity.
Fourthly, social protection increases the resilience of the people during crises and shocks, as demonstrated by how multiple forms of social assistance, wage subsidies, and other support during Covid-19 helped Malaysians weather the storm.
Why is social protection for all vital?
We need social protection that is for all so that we can all access it whenever and however we need it.
However, there must be a progressive realisation of this goal by investing in a resilient and dynamic social protection system and focusing on those most in need first. A strong social protection system will protect and provide opportunities to empower the people, ensuring support is available when people or the economy suffer shocks such as Covid-19, but also supporting them in good times to achieve their full potential.
It takes a crisis like Covid-19 to remind us that we need a robust social protection system. Our ability to withstand the next storm depends on the measures we take during this calm period. Let us not forget about this lesson learnt and continue to press on and build a stronger social protection system for a stronger Malaysia.
Wan Ya Shin is a social protection economist at the World Bank. Find out more about World Bank’s vision of universal social protection in the report, Charting a Course Towards Universal Social Protection: Resilience, Equity, and Opportunity for All.
