KUALA LUMPUR – As Malaysia tries to recover from the Covid-19 pandemic and the floods, the government has a chance to adopt effective policies to improve living standards in vulnerable communities, said Permatang Pauh MP Nurul Izzah Anwar.
Acknowledging that the government had said in October that it would continue to improve poverty measurement methods by revamping the national Multidimensional Poverty Index (MPI) methodology, Nurul Izzah said a more realistic MPI is imperative.
She said it is to enable the government to grasp in detail the main challenges facing the poorest Malaysians.
“The development of a realistic MPI is a necessary first step, because it would enable the government to comprehend in detail the main challenges – from lack of sanitation and access to clean water to internet coverage for online education – confronting the poorest Malaysians,” she said in an opinion piece published by CNA yesterday.
The PKR lawmaker added that well-designed MPI studies can bring important facets of the people’s lives to policymakers’ attention, in addition to measuring the overall gap between the richest and poorest.
In addition, she quoted 2019 Oscar-winning film Parasite, where she said the South Korean black comedy thriller film’s depiction of a low-income household’s acute sense of alienation struck a chord with the masses, as similar sentiments are palpable in many countries.
“And the gap between the haves and have-nots is growing, thanks to the dual challenges of Covid-19 and climate change.
“Equipped with this knowledge (of the gap between rich and poor), governments, including Malaysia’s, can begin to mitigate the social tensions so brilliantly rendered in Parasite.”
Quick fix schemes: a formula for disaster?
Meanwhile, she lambasted the government for turning to quick fix schemes to stave off the economic impact of the pandemic, with profound consequences for the entire budget.
She made reference to the three rounds of allowing members of the Employees Provident Fund (EPF) to withdraw from their retirement fund under the i-Lestari, i-Sinar and i-Citra, where over six million members now have less than RM10,000 in their EPF accounts.
“It has been reported that a total of RM101 billion has been withdrawn from the EPF. Over six million members now have less than RM10,000 in their EPF accounts, and more than half of these have less than RM1,000.”
In fact, she said, some 22% of the government’s total pandemic economic stimulus consisted of withdrawals by Malaysians from their own retirement funds.
However, with more than 15% of Malaysia’s population expected to be 60 years or above by 2030, she added that the scheme is a formula for disaster.
“Its loudest proponents include the disgraced former prime minister Datuk Seri Najib Razak, whose conviction for corruption last year has not deterred him from brazen Facebook posts that encourage cash-strapped retirees to deplete their savings further.”
Last September 15, Najib suggested that the government should increase the i-Citra maximum withdrawal limit from RM5,000 to RM10,000, provided that the government undertakes serious efforts to boost EPF’s assets by giving more business opportunities to EPF-owned companies.
During the debate session on the motion of thanks on the royal address by the Yang di-Pertuan Agong in Parliament, the Pekan MP also proposed the introduction of the i-Survive soft loan scheme for B40 and M40 borrowers, with a three-year repayment period and a low maximum interest rate of 3%.
Last November 1, the former Umno president had once again urged the government to increase the maximum withdrawal of the i-Citra fund to RM10,000.
In making the call, he said the proposal is not a populist move, but stemmed from the urgent need of the people post-pandemic.
On December 14, Umno president Datuk Seri Ahmad Zahid Hamidi echoed Najib’s calls for the government to allow further withdrawals from EPF in order to help those still suffering from the economic effects of Covid-19.
Further withdrawals could erode EPF’s standing as trustee of members’ retirement future
In response, EPF issued a statement on December 28, 2021 to warn that any erosion of trust towards the agency might cause a massive withdrawal that will negatively impact capital markets in the country.
This was after noting that more than RM270 billion in savings can be withdrawn at any time by its members who have reached above the age 55 or 60, or those who have more than RM1 million in their account.
The retirement fund expressed concern that further withdrawals from the fund to help soften the impact of Covid-19 and recent natural disasters would “erode its position as a provident fund and trustee of its members’ retirement future”.
EPF said “such erosion of trust towards the agency might force these members to withdraw en masse, thus causing negative impact to the country’s markets, as the EPF is a major pillar in the holding of capital market and financial investment assets in the country.”
“The unprecedented scale and impact of the Covid-19 pandemic and recent natural disasters have pushed the country’s current social protection to its limits. The approach of using EPF savings for emergency needs will certainly cause a severe impact, as members will face very low savings in their retirement years, compounded by other uncertainties such as rising healthcare costs,” it said in a statement. – The Vibes, February 18, 2022
