World Bank urges Malaysia to continue income relief measures for another 6 months

KUALA LUMPUR: The government should continue its existing income relief measures to target groups for at least another six months to maintain financial support for the poor and vulnerable group in the near term, said the World Bank Group.

Senior economist on Poverty and Equity Dr Ririn Salwa Purnamasari said there is an ongoing need to provide support to a broad range of households, particularly low-income and vulnerable households, through cash assistance transfers at least until economic growth, job creation, and wage growth resume.

“Thereafter, this cash assistance can be focused more narrowly on the chronically poor,” she said during the launch of Malaysia Economic Monitor December 2021 Edition ‘Staying Afloat’ today.

She also said that targetted wages subsidies must be introduced, including for youth and women, who traditionally suffer from difficulties in entering the labour market.

“As the economy and employment recover, resources could be directed to those who may continue to need support to obtain a job and who may not benefit from the existing wage subsidy programme,” she suggested.

Ririn Salwa also said a pilot and social insurance evaluation measures also needed to be carried out, whereby Malaysia could learn from the experience of other countries on pilot initiatives to increase the coverage and adequacy of social insurance programmes among informally employed workers.

On the education system, she said within Malaysia’s education space, measures were required to improve learning processes, especially for socioeconomically disadvantaged children.

“With prolonged school closures, it is likely that disparities between the socioeconomically advantaged and disadvantaged households have widened the existing learning gaps,” she said.

As a crucial first step, she said the government could conduct an assessment of the pandemic-related learning loss to determine the specific needs of students as they re-engage in face-to-face learning.

For a long-term focus, Ririn Salwa said the government must improve the targeting and adequacy of Malaysia’s cash transfer systems to provide better coverage and protection.

“This can involve outreach programmes and leveraging existing registries for cash transfer programmes that focus on the most vulnerable, such as those implemented by the Department of Social Welfare,” she said.

Over time, she said the Malaysian government might need to increase its expenditure on social assistance to ensure a robust social protection system and to promote equitable outcomes.

“Active labour market policies should be strengthened to increase their responsiveness to economic shocks,” she added. – Bernama

Published : December 22, 2021

By : The Star