Re-evaluating social protection systems

The COVID-19 pandemic has taught us many important lessons. Not only have we learnt that even countries with the most progressive social protection systems were not prepared for the crisis, but it has also forced us to rethink the very parameters of our social protection systems, to be one that is more responsive and inclusive, where no one is left behind.

For the past two years, the pandemic tested the resiliency of local economies and revealed the gaps in a nation’s fundamentals – whether that be economic, financial, or social.  The unprecedented crises shook many impeding quality of life and access to many of the basic essentials required on a daily, including food, energy, and shelter. Across the world and in Malaysia, we saw many people struggling to make ends meet, while prices of commodities rose sky-high.

The impact on the economy can be seen clearly with the high number of retrenchments resulting in many resorting to informal economic activities, gig economy and set up quick businesses. Indeed, the pandemic set back decades of investment and policy choices made by governments and communities to raise people out of poverty.

Malaysia’s response to the pandemic

The pandemic has also demonstrated the most effective mechanisms for deploying social support. Accelerated by the urgency of the crisis, mobile-first communication was utilised to reach affected communities in many countries, while the adoption of digital platforms enabled more efficient interlinking of government and societal resources for better targeting.

In Malaysia, the government expanded the social protection schemes to ensure non-standard workers and those who are traditionally excluded from Malaysia’s bifurcated social protection system are adequately supported during the crisis. For instance, the Government expanded social protection coverage to e-hailing, taxi drivers, tour guides and tour bus drivers received one-off cash assistance during the pandemic.

Under the Penjanagig, the Government introduced social security schemes dedicated to self-employed workers, where they are able to contribute to social security under a subsidised rate.  Quite recently, the Government announced the I-Lindung to boost the insurance uptake among informal workers using special EPF withdrawal and SIP Gig Programme to incentivise enrolment in the gig economy among vulnerable groups such as the retrenched employee, the disabled or former inmates as well as unemployed persons including housewives.

These efforts are commendable, but gig workers registered with these schemes have remained low and with the increase cost-of-living due to inflation, the current social safety net will not be sufficient to protect more rakyat falling into poverty and this would be even harder to recover as we slowly recuperating from the impact of post-pandemic. 

Integrated approach needed to strengthen system

As the global outlook continues to remain uncertain, Malaysia needs to look beyond stop-gap measures. UNDP believes that an inclusive social protection policy alongside better coordination and improved delivery efficiency can secure long-term improved welfare outcomes, while also delivering human capital and productivity gains.  

Against this background, UNDP Malaysia is collaborating with the Implementation Coordination Unit, Prime Minister’s Department, (ICU, PMD) to review specifically the potential integration of databases, improved inter-operability of systems across different agencies and strengthened institutional capacity of social protection delivery. In line with the Twelfth Malaysia Plan (12MP) Strategy A6 on strengthening social protection for all, the project aims to improve the effectiveness and efficiency of the social protection system.

On August 04, 2022, the Strengthening Malaysia’s Social Protection Project was formally launched by Ms. Kanni Wignaraja, the United Nations Assistant Secretary-General and United Nations Development Programme Regional Director of Bureau for Asia and the Pacific, during her one-week strategic mission to Malaysia.