With Malaysia approaching its one year lockdown anniversary, we are reminded that Covid-19 is not only an issue of health and safety but also the economic wellbeing of those around us.
Those who were surviving before the pandemic now find themselves struggling to even survive with the uncertainties of the pandemic.
Regardless of how long the ‘makcik kiah’’ has been selling her amazing food, or how perfect the barber ‘anneh’ cuts his client’s hair, any business that does not qualify as essential services is at risk of halting cash flow.
The reality of it is that any drastic changes will result in a ‘life without income’ for many in the low-income bracket.
There Was The Poor, And Then, The New Poor
According to 2019 data, more than 400,000 households earn less than RM2,208 per month. This means that roughly 5.6% of Malaysia’s population are living in absolute poverty, unable to afford basic necessities such as food, clothing and shelter. However, they are not the only ones left vulnerable in this pandemic.
Currently, there are roughly 800,000 households whose income do not reach RM3,000 per month. Because this income group only just escaped absolute poverty, they are an extremely vulnerable population.
If these households were to lose as little as RM700 per month (in the event of an economic shock), they would soon share the same reality of those living under the national poverty line.
The current economic crisis Malaysia is facing is capable of sending 1.2 million Malaysian households into absolute poverty.
No Savings To Save Them
Usually, when faced with economic difficulty, many of us resort to dipping into our savings. However, there are many Malaysians that just don’t have that luxury. According to the Department of Statistics Malaysia’s Household and Income Survey in 2019, those from the B1 category (households earning less than RM2,500 per month) only have approximately RM200 surplus after deducting daily household expenses and necessities. Unfortunately, the surplus amount has not yet taken into account compulsory contributions to EPF and SOCSO.
For many low-income groups, being able to set aside money for savings was a challenge even before the pandemic. Many are faced with a high-cost living, irregular pay, and some even had to borrow.
In a situation of an economic shock, those from low-income groups cannot rely on personal savings to survive for long periods of time. In fact, many of them do not have any savings for old age.
Malaysia’s Employees Provident Fund (EPF) revealed that 32% of contributors have less than RM5,000 in their Account 1.
Based on a survey of 500 households in Kuala Lumpur’s Program Perumahan Rakyat (PPR) flats, unemployment has doubled between September and December 2020. The survey conducted by UNICEF and UNFPA Malaysia shows that 15% of heads of households have lost their job in December 2020 compared to 7% in September 2020. With salaries being cut, and employees being laid off the worst has yet to come for these vulnerable households.
Are Government Aids Enough?
Under the 2021 budget, the government has set aside RM30.8 Billion worth of subsidy, incentives and allowances for the B40 community alone. Members of the bottom 40 income group can claim up to RM1,800 cash assistance under the Bantuan Prihatin Rakyat as well as receive financial assistance if they have children.
The new budget is also inclusive of loan repayment, daily meal plans, childhood education programs, public transportation and even insurance coverage. However, just how much is there to go around? With an extra 800,000 households potentially falling into poverty, one cannot help but to question is there will be those that are left to face these troubled times without aid. With the high probability that PKP 2.0 in 2021 will last longer than the two weeks announced, it is clear that more help might be needed.
We can’t allow more people to fall into poverty when a difference can be made.
Explore Our Sources:
- A. M. M. Firouz & H. A. Hamid. (2021). Lebih sejuta isi rumah miskin jika tiada bantuan sepanjang PKP 2.0. Khazanah Research Institute. Link.
- Jabatan Perangkaan Malaysia. (2020). Laporan Survei Pendapatan Isi Rumah & Kemudahan Asas 2019. Link.
- Buang, S. (2020). Pendedahan 32% pencarum hanya ada kurang RM5,000 mengejutkan. Malaysiakini. Link.
- UNICEF & UNFPA. (2021). Families on the Edge: Issue #3. Fact Sheet. Link.
- Prime Minister’s Office. (2020). Budget 2021 Infographic. Link.