Social protection programmes key to poverty reduction

Focus Malaysia

20-06-2025

MALAYSIA has stepped up efforts to reduce poverty in recent years through targeted social protection programmes, particularly those aimed at the B40 income category.
However, the effectiveness and breadth of these programmes are called into question since growing living expenses continue to strain all income levels, including M40.
The B40 in Malaysia's social protection environment
Targeted assistance for the Bottom 40% (B40) income group is the central tenet of Malaysia's approach to reducing poverty.
Programmes like Bantuan Sara Hidup (BSH), Bantuan Prihatin Rakyat (BPR), and the more recent measures unveiled in Budget 2025 aim to help low-income households cope with the rising cost of living.
These initiatives provide needy families short-term financial relief through subsidies, housing assistance and cash help.
The Department of Statistics Malaysia (DOSM) statistics, however, show that although these programmes provide short-term respite, they cannot significantly improve families' long-term economic standing.
A recent report from DOSM states that the average income of B40 has increased by only 1.5% per year, which is not enough to keep up with inflation.
Many people still have limited purchasing power as a result, particularly given the sharp increase in the price of food and housing.
As such, Prime Minister Datuk Seri Anwar Ibrahim has underlined the government's will to address these problems, promising to lower costs and increase accessibility to necessities to ease financial burdens.
Critics contend that monetary distributions could not alleviate underlying economic inequities despite these guarantees.
'Malaysia's B40 will continue to face an uphill struggle against poverty without structural reforms in education, employment, and wage policies,' one economist noted.
Global social protection models: Achievements and insights for Malaysia
Various social protection regimes worldwide have successfully reduced poverty, particularly when multifaceted and sustainable approaches are used.
One programme generally commended for decreasing severe poverty is Brazil's Bolsa Família, which goes beyond cash transfers by requiring families to comply with health and education standards.
This strategy has broken the cycle of inter-generational poverty, which has had a profoundly positive effect.
Another practical example is the Basic Livelihood Security Program (BLSP) in South Korea, which combines financial help with housing assistance, skill development, and job support.
By linking financial aid to social services and job training, the BLSP has decreased poverty rates and enhanced recipients' capacity to find steady work, encouraging long-term independence.
South Korea's strategy emphasises the necessity of a comprehensive social safety net that fosters employment and skill development.
Similarly, the European Union's 'Active Inclusion' approach supports beneficiaries by combining labour market reforms with social protection, offering financial assistance and work placements.
Malaysian approach gaps: Going beyond financial aid
Though Malaysia's B40 initiatives offer much-needed financial assistance, they don't have the same cohesive structure as nations like Brazil and South Korea.
Due to the lack of a multifaceted strategy, B40 beneficiaries' ability to achieve economic independence is restricted.
The main drawback is that Malaysia's social security system primarily uses short-term financial assistance to combat poverty rather than focusing on long-term empowerment initiatives.
On the other hand, effective schemes, such as the BLSP in South Korea, strongly emphasise developing human capital, providing work opportunities and skill training to recipients as part of their social benefits.
Another gap is the availability of affordable housing. Although Malaysian authorities have started projects to provide inexpensive housing, they are frequently focused in metropolitan areas where demand outpaces supply, underserving rural and peri-urban locations.
Future directions for Malaysia: Establishing a Comprehensive social safety system
Motivated by South Kore's BLSP and Brazil's Bolsa Família, Malaysia might benefit from implementing a more all-encompassing strategy that incorporates job assistance and skill development to improve the efficacy of social security.
Working with social services and career development programmes might pave the way for the B40 to become resilient and financially independent.
Furthermore, prioritising accessible education and universal healthcare will guarantee that fundamental necessities are satisfied, lessening the financial burden on low-income households.
These steps would align with international best practices, calling governments to establish safety nets that do more than alleviate acute misery.
Finally, increasing social protection in underprivileged regions might improve living conditions for low-income people in rural and urban areas, addressing regional disparity concerns.
When Malaysia prepares for Budget 2025, adding these components might turn the B40 support system into a cornerstone for long-term, sustainable poverty alleviation.
Using holistic reform to close the gap
A move towards a more integrated strategy might enhance results for the B40 and beyond as Malaysia's social protection programmes continue to develop.
As demonstrated by international examples, providing routes to education, work, and self-sufficiency is necessary to reduce poverty effectively.
If these all-inclusive models are emulated, all Malaysians might gain from the country's progress, which could help Malaysia close the gap in economic inequality. ‒ June 20, 2025
The author is the Director of the Ungku Aziz Centre for Development Studies, Universiti Malaya.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Main image: Bernama