Poverty Researcher Suggest Fresh Strategies To Help The ‘New Poor’-

On the 11th of June 2021, the government announced that it would be extending its nationwide lockdown with COVID 19 cases spiking well into the thousands. These extensions fall in line with last year’s patterns in order to mediate the increase in cases. However, even though this protocol did succeed, many suffered from an economic standpoint, resulting in Malaysia’s B40 population becoming B50 and a sizable number of M40’s slipping into B40. The emergence of the ‘new poor’ demographic is estimated to be about 1.2 million people[1]

Since then, James Raj, poverty researcher and a member of the All Party Parliamentary Group Malaysia on sustainable development goals has urged those affected to not let this situation continue. According to Raj, forms of cash aid are only able to ‘troubleshoot’ the problem rather than address the problem in the long run[2]. While handouts do provide temporary relief in an economically difficult situation, over time, less emphasis has to be placed on welfare handouts as a means of dealing with poverty[2].  

Source: Warga Biz

Rather than empowering people to uplift themselves out of poverty, people can become reliant on aid and won’t be able to escape the cycle of poverty. If a husband and wife are in poverty and you give them money and food but don’t improve their knowledge and training, their children will end up in poverty too. – James Raj, poverty researcher[2]

Thus rather than relying on government handouts, here are some of the methods he suggested to help the ‘New Poor’: 

#1: Upskill To Uplift Lives

Upskilling programmes provide the opportunity for continuous learning by providing training programs and development opportunities that expand an employee’s abilities and minimize skill gaps. Upskilling and reskilling provides skills certification upon completion of the respective programme and often come with job offers by the stakeholders involved[3]

The expert firmly believed that the government should partner with stakeholders in the private sector to secure professional training for the new poor, creating opportunities for them to reenter the workforce[2]

#2: Open Up Communal Kitchens 

2020 estimates showed total revenue of RM896 million solely from food delivery services. This was a 46% increase from 2019’s revenue[4]. With more and more people generating side incomes through cooking, baking and selling foods, Raj suggested that the opening of communal kitchens would provide low-income people with a platform to help them market their products. 

These things [communal kitchens] encourage people to learn new skills and restore their dignity because they are able to earn. – James Raj, poverty researcher[2]

Source: Edge Prop

A suggestion is that the use of existing cloud kitchens is properly utilised. Cloud kitchens, otherwise known as ghost kitchens are space shared with multiple food vendors for the sole purpose of cooking[4]. There are no shop fronts or dine-in options for cloud kitchens, just a co-working space that features a shared kitchen equipped for Asian and Western cuisine, baking, food preparation and packing. Orders are cooked, picked up and delivered to the customer’s doorstep. A shared kitchen pass can start as low as RM900 per person, per month and it includes utilities[4]

#3: More Programs to Enable and Empower Entrepreneurship 

When the world was forced into lockdown, everything moved online, kicking all online businesses into an overdrive. Overhead costs such as rental and utilities are now diverted to postage or delivery fees. Thanks to e-commerce platforms such as Lazada and Shopee, many small businesses are still surviving and others have mushroomed – finding a niche in the products put forward[5]

Source: Symbike

The government has also utilised these platforms to distribute various forms of aid amongst consumers and merchants. With everything at the touch of a button, and the entire world as potential customers, migrating one’s business online may be the saving grace many people need[5]

The good news is that the pandemic has opened up opportunities for anyone to be an entrepreneur. With proper financial aid and capital injection in place, those from low-income households now have a chance to create new income streams. Some of the existing programs in place include: 

  • Geran Khas Prihatin (GKP) 3.0: Additional one-off payment worth up to RM1,000 for SMEs and micro-entrepreneurs under the grant.
  • TEKUN Nasional has allocated an additional budget of RM60 million:
    • Informal Funding Scheme: Small-scale businesses and informal sector businesses such as businesses operating from home and night markets are allowed to borrow up to RM5,000.
    • TEKUN Mobilepreneur: Entrepreneurs who require a vehicle for delivery services can apply for financial aid to purchase or repair their motorcycles up to a limit of RM10,000. Additionally, there will be a 100% excise duty exemption starting 1 April – 31 December 2021 for motorcycles 150cc and below.
    • TEKUN POS-preneur: Financial assistance of up to RM30,000 for vehicle repairs and up to RM50,000 for the purchase of vans or lorries to those who earn an income via delivery contracts.
  • Suruhanjaya Syarikat Malaysia (SSM) is now offering all those in the B40 category free business registration if they are interested to open a business under the Skim Pendaftaran Perniagaan Prihatin (SPPP). This fee waiver is aimed especially for youth, students and single mothers looking to start a business.
  • PEMERKASA-NITA Microfinance Scheme together with BSN will provide RM50 million specifically to women who wants to venture into business.
  • BSN Micro PEMERKASA ISTIMEWA is another initiative under the Program Strategik Memperkasa Rakyat dan Ekonomi (PEMERKASA) aimed at helping disabled entrepreneurs. This microcredit scheme allows them to get loads up to RM50,000 at an interest rate of 3%.

Explore Our Sources:

  1. A. M. M. Firouz & H. A. Hamid. (2021). Lebih sejuta isi rumah miskin jika tiada bantuan sepanjang PKP 2.0. Khazanah Research Institute. Link
  2. I. Arif. (2021). Fresh strategies needed to help the new poor. Free Malaysia Today. Link. 
  3. Wiki Impact. (2021). Going Beyond Hangouts: Helping The Underprivileged. Link. 
  4. L. K. Yi. (2020). Growing appetite for food deliveries pushing the rise of cloud kitchens in the Klang Valley. Malay Mail. Link. 
  5. R. Adhikari & D. Tembo. (2020). How poor countries can deal with the economic shock of COVID-19. Trade Development News. Link.

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