“We cannot overcome poverty by giving the poor money. This will not make them rich. On the contrary, for as long as they receive aid, they will remain poor…”Tun Dr. Mahathir Mohamad, Former Prime Minister
In the battle to eradicate poverty from the country, there are constant debates on the “correct” method of doing so. Is it better to give the people “handouts” or “hand-ups”?
As the concept of poverty is so complex and cannot be traced back to just one root cause, the solution cannot be boiled down to just one easy answer. Different forms of poverty require different interventions to bring about short term and long term changes.
A Quick Fix: Handouts
A sudden change in one’s financial stability will eventually lead to vulnerability. Anything from being fired from work; the death of the head of household; the occurrence of natural disasters or even a national lockdown can lead to a hiccup in a family’s finances.
More often than not, these situations are unavoidable and out of the person’s control. Thankfully, despite the initial shock and need to temporarily adjust one’s spending, most of these scenarios are temporary or should be stopgap measures.
During these desperate times, communities in need require immediate help and this where the local government, NGOs and charities take it upon themselves to aid the struggling community. Handouts to the community can be in the form of cash, food, clothes and basic provisions. They come without condition and are mostly a one off, or for a short duration of time.
For example, when the Movement Control Order was in place in March 2020, the government announced a one-off cash payout for the B40 and M40 groups, to ease the financial strain of the lockdown.
The payout, based on income level, was listed below:
This payout alone came to a total of RM10 billion . At the same time, other NGOs took it upon themselves to feed the needy, donate clothes, assist with online learning, and provide aid to whoever needed it. This is not a bad thing! Many of us applaud charitable actions like donating to the poor, cooking for the homeless and Malaysians have always loved a cash give-a-way from the government.
Although it was deemed as a great helping hand, however, the handouts were not aimed to pull everyone through in the long run. Extreme cases can even lead to feelings of entitlement amongst regular receivers.
Take the current pandemic for example. Many are still left jobless. Many whose jobs have been retained have to face major pay cuts. Businesses are still closing down. A one-off payout of less than RM2,000 per household is not going to fix the problem unless it was paid frequently, which is funding that the government doesn’t have.
“For too long, the fundamental flaw has been rooted in the belief that charity will help resolve the issue of poverty,”Josie Fernandez, special representative for the Society for Rights of Indigenous People of Sarawak (SCRIPS) 
At the end of the day, the short term solution of handouts is similar to putting a plaster on the poverty wound. Better, long term aid is necessary to heal it.
Long Term Treatment: Hand Ups
Whilst handouts are great for:
- Temporarily easing the economic difficulties faced by low-income households,
- Gaining people’s support
- Helping to stabilise the newly established governments.
The poverty problem still exists. Over time, less emphasis has to be placed on welfare handouts as a means of dealing with poverty except for segments of the hardcore poor who are unable to find gainful employment, such as the aged and disabled.
As short term solutions, they are necessary to help the public survive in the meantime. However, as they are only made to last a short while, as most stable, long term solutions need to be quickly implemented, or the public will suffer.
In order to fully eradicate poverty in the long run, various strategies need to be taken into consideration on all levels of society. Accessibility to education, food security, safe shelter, uplifting job opportunities and increased minimum wage are all important factors that need to be considered. Most of which is the government’s responsibility.
However, people have to be willing to learn and do their part.
Unlike the handouts that came without terms and conditions, it takes a little more effort on the receiver’s part for a hand up. Even if many new businesses are created and thousands of white-collar jobs are put into place, there is no use if the current “poor” demographic does not qualify to have them.
Based on a study by Randstad, 89% of Malaysian respondents agreed that they would need new skills to work in a digital environment. The new world of employment needs these skills to be catered for before the promise of job stability.
According to the World Bank, “low skills perpetuate poverty and inequality. Skills development can reduce unemployment, raise incomes, and improve standards of living. Helping young people develop skills makes economic sense” .
Those in poverty need to have the drive to escape it, or at least not pass it on. Parents from low-income families need to stress the importance of basic education and soft skills for their children. In 2018, Malaysia’s dropout rates for primary and secondary schools is 0.15% and 1.21%. Although this number is slowly decreasing over the years, about 85% of school dropouts come from low-income families in less developed states in Malaysia. There is an undeniable need to increase awareness levels among low-income families on the importance of education and the opportunities it holds thereafter for a better life and future.
Enrolling into schools is a must in this day and age, as a matter of fact, Malaysians are legally obligated to send their children to school for primary 1 – 6. For those that cannot afford to further their studies, there are always upskilling programs that the government has funded as well as those online.
A crucial point in “hand up” interventions is the acknowledgement that all humans have a right to choose what kind of future they want, they are also of value, worth and have dignity. They should be given equal opportunity to succeed or fail.
The saying goes
“Give a man a fish, and you’ll feed him for a day. Teach a man to fish, and you’ve fed him for a lifetime”
At the end of the day, both handouts and hand-ups are necessary in helping to alleviate and eradicate poverty. Whilst waiting for the fruit of long term “hand-ups” those experiencing poverty in the present need means to get by. Hence, handouts are still needed.
*Special note: Hand up (empowerment) interventions for low income families are far and wide. We hope to explore and feature more of them in the future. We understand that poverty is a complex issue and there is no one-size-fits-all solution. The portfolio of poverty alleviation tools and programs must be multi-faceted, sustainable and consistent in support for those living in the cycle of poverty.
Explore Our Sources:
- A. Aziz. (2020). Covid-19 stimulus package: One-off cash payout totalling RM10b for M40 and B40. The Edge Market Link.
- L. C. Ying. (2014). Poverty: Hope Beyond Handouts. The Star. Link.
- B. K. K. Kwong. (2013). A Comparative Analysis of the Cash Handout Policy of Hong Kong and Macau, in Journal of Current Chinese Affairs. Link.
- UNDP. (2005). Strengthening Capacity in Policy Formulation Monitoring and Evaluation for Poverty Eradication. Malaysia. Link.
- Kam, P. (2021). Adapting to the new job market with training and development in Malaysia. Learn Tech Asia. Link.
- World Bank. (2017). Skills Development. Link.
- Ministry of Education Malaysia. (2018). Malaysia Education Blueprint 2013-2025. Link.
- Millennium Development Goals for Malaysia. Link.