Several gaps exist in the current system of social protection, namely fragmentation, low coverage, and a heavy emphasis on discretionary methods of disbursement.
Panellists at Bank Negara Malaysia’s (BNM) Sasana Symposium 2023 highlighted these concerns today, flagging the need for holistic improvements to help workers in this sector.
Social protection is broadly defined by the World Bank as systems to help poor and vulnerable people cope with crises and shocks, find jobs, invest in the health and education of their children, and protect the ageing population.
EPF provides retirement funds for those in the formal sector, whilst the Social Security Organisation (Perkeso) provides coverage for accident and injury.
Individual initiatives like Bantuan Warga Emas and Bantuan Sara Hidup, which provide cash handouts, also fall under the umbrella of social protection schemes.
“A lot of these programmes cover only the formal sector. The informal sector is big in our economy, but they don’t get a lot of attention,” said BNM assistant governor Fraziali Ismail.
Malaysia’s informal employment reached 3.5 million persons in 2021, contributing 23.2% of the country’s total employment, according to the department of statistics.
“It’s not (just the) B40 (in the informal sector), it’s also the B60. It’s not just the homeless who are lining up for food, but the middle income (earners) too,” said Hartini Zainudin, founder of Yayasan Chow Kit.
In order to remedy these issues, data is important in identifying who qualifies for benefits and support.
Fraziali said one step in the right direction was the setting up of Pangkalan Data Utama (Padu) as a one-stop system of eligibility, registration and application for social protection programmes.
However, it would not be able to solve all the problems that exist. At present, data collected by various agencies is often siloed and contains beneficiary information for that particular initiative.
“We don’t share knowledge. We don’t share communications. We don’t share strategies,” Hartini said.
As a result, there is no wider social registry that can be used to track and support beneficiaries over time.
“Malaysia already has many of these building blocks and I think the institutional politics of actually reforming the system (make it) more complicated,” said Matthew Dornan, senior economist in social protection for The World Bank.