Covid-19 paving the way for a welfare state?

The numerous support plans rolled out by the government to cushion the impact of Covid-19 on the people, while perhaps necessary, have paved the way for the country to become a welfare state, a political sociologist says as Malaysians look to close the book on a year of crisis which has left many mired in financial uncertainty due to job losses, pay cuts and the closure of companies.

Initiatives to help the hardcore poor have been in place for decades, but this year saw an unprecedented number of schemes and economic stimulus packages unveiled in the wake of the initial movement control order, which saw all sectors except for essential services shut down in a bid to curb the spread of infection.

One by one, measures such as the moratorium on loan repayments, Bantuan Prihatin Nasional payments and EPF withdrawals were implemented as the pandemic continued to wreak havoc on an already shaky economy.

Sivamurugan Pandian, a professor at Universiti Sains Malaysia, told MalaysiaNow that such assistance, especially given to people in dire need, had made the country a welfare state “in fact”.

“During a crisis, people normally look for assistance and want the government to address their problems. They want the government to understand their needs, demands and mindset,” he said.

But he warned that government efforts to this effect would soon engender a financial burden as the people’s dependency for money increased, forcing the government to provide continuous aid.

In addition to the expenses involved in its Covid-19 rescue plans, the government is juggling a national debt of RM874.27 billion. It has also been urged to do more for the people as the pandemic maintains its momentum, both in the country and around the globe.

“During a crisis, people normally look for assistance and want the government to address their problems.”

Experts including the World Health Organization have cautioned that the pandemic will not disappear any time soon, even with the vaccination programmes unfolding across the world, including in neighbouring Singapore.

The people likely to be most affected by a prolonged state of economic uncertainty brought on by public health concerns are those in the M40 and B40 groups.

Sivamurugan said efforts to provide financial support for those in need would probably continue. However, he said people should also take the initiative and look for other ways to stablise their finances.

“Intervention given should be seen as a temporary measure rather than permanent,” he told MalaysiaNow.

But economist Lee Hwok Aun, a senior fellow at Singapore’s ISEAS-Yusof Ishak Institute, said there is presently nothing to worry about with regards to the government’s financial aid.

He said the assistance is a matter of survival and preserving the basic livelihoods of the people.

Speaking to MalaysiaNow, he said the government must increasingly take responsibility for safeguarding the welfare of its citizens and residents as part of global social protection.

He added that wage growth has not risen in tandem with the cost of living, while change in the industry and job market makes workers more vulnerable.

“In some respects, Malaysia still under-provides social welfare,” he said.

“The pandemic has exposed the vulnerability of many households to this type of shock, and the lack of private resources to cope. It is in the national interest, not to mention a moral obligation, for society to protect the vulnerable.”

However, he added that social assistance should be well-designed, suitably targeted and effectively implemented.

Sivamurugan agreed on the need to protect the underprivileged during a crisis such as the one brought on by Covid-19, as long as the delivery system for financial aid can help reach them.