Should Putrajaya plan an exit policy from BR1M cash aid?

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Putrajaya Should Develop an Exit Strategy from BR1M Cash Aid

An academic from Universiti Malaya's Centre for Poverty and Development Study (CPDS) has recommended that Putrajaya formulate a policy to eventually replace direct financial aid, such as BR1M. Associate Prof Dr Fatimah Kari suggested that an exit policy from BR1M is necessary because the cash handouts are not significantly impacting households or contributing to long-term poverty reduction. Instead, she advocates for a comprehensive social security protection system that includes access to public health, education, and job creation initiatives.
Limitations of Direct Financial Aid

Dr Fatimah Kari expressed a personal disbelief in the effectiveness of BR1M, the government's cash handout program for low-wage Malaysians. She argued that these payouts have a limited impact on household welfare and do not contribute to sustained poverty reduction efforts. Her stance is based on the findings of a CPDS study examining the effects of subsidy cuts on the Malaysian economy and poor households.
Proposed Alternative: Comprehensive Social Security Protection

As an alternative to direct cash transfers, Dr Fatimah Kari proposed the development of a robust social security protection system. This system would aim to provide a more sustainable framework for supporting vulnerable populations by ensuring access to essential public services. Key components of this proposed system include improved public health services, enhanced educational opportunities, and targeted job creation programs designed to foster self-sufficiency.
Addressing Urban Poverty and Economic Realities

The CPDS study, led by Dr Fatimah Kari, highlighted that subsidy reforms have disproportionately affected the rural and urban poor, with the potential to increase poverty, particularly among the urban population. The study recommended that Putrajaya update its urban poverty profile to reflect the evolving Malaysian economy over the past five years. It noted that urban poor face increased competition for low-paying jobs alongside a rising cost of living, suggesting the need for community-focused programs tailored to these specific challenges.

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Should Putrajaya plan an exit policy from BR1M cash aid?

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