Khazanah Research Institute (KRI), in a report titled “Welfare in Malaysia across three decades”, said the growth rate of median household incomes had not returned to pre-Asian financial crisis (AFC) levels.

As a result, while the overall poverty rate has been reduced, many Malaysians still lack significant savings, which give them little margin for error as the pandemic struck.

In a webinar, KRI research adviser Jomo Kwame Sundaram said drawing on lessons from Malaysia’s reaction to the AFC and the global financial crisis in 2008, greater emphasis needed to be placed on wider social security efforts.

“We find ourselves in a situation where a great number of people in Malaysia will have difficulty coping with the impact of Covid-19.”

He said in addition to the Prihatin stimulus measures, “it’s very important to recognise that it is necessary to have much more generous and extended support, comparable to what might often be referred to as a universal basic income”.

He added: “We need to draw from this as well as previous studies and think about how we can better design our relief measures to ensure at least a decent standard of living for people in this country.”

Hawati Abdul Hamid, a researcher at KRI, said while she was “not at all against cash aid,” which was invaluable for elderly and disabled people who cannot work, the government must strive to implement strategies to support job creation and wage growth.

She said social protection policies needed to be up to date with the trends in the job market so that more people could access government assistance.

“We’ve seen that informal and non-standard employment has been a rising trend in recent years, which implies that these informal sector’s workers are out of the system and are not protected or covered by our social protection systems like EPF and Socso.”

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