- 1 year ago
How will the upcoming RMK-13 bridge Malaysia’s social safety divide and expand protection to the nation’s overlooked workforce from gig riders to daily-wage earners? Professor Niaz Asadullah, Senior Fellow at the Institute for Democracy and Economic Affairs (IDEAS), shares insights on the policy shifts needed to make social protection more inclusive and future-ready.
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00:00Pantau Belanjawan
00:30Pantau Belanjawan
01:00Terima kasih
01:30and this time we're going to be shifting more focus on the social protection.
01:35Maybe you can share with us, how does RMK13 plan to address the protection gap
01:40between the former sector co-workers and those who's informal
01:44and also contractless or gig-based role,
01:47especially as employment structures evolve rapidly?
01:54Thank you for inviting me.
01:56So let me add to your introductions.
01:59So Malaysia still does not do enough to provide broad-based social protection for workers.
02:06If we are thinking in terms of statistics,
02:09the spending is about 4% to 5% of GDP altogether.
02:13So that's roughly the same share as lower-income, lower-middle-income countries.
02:19And as we speak, the 13th Malaysia plan is all about doing better,
02:25providing better coverage for informal workers, self-employed,
02:32and particularly those that are in the gig sector.
02:35So again, the other part of the context is that in the past,
02:40the 12th Malaysia plan hasn't done enough.
02:43We experimented with a few ideas.
02:46We know about targeted pilots schemes, such as ISERN for EPF.
02:54But I think with 13th Malaysia plan, the idea is to look forward, build on that,
03:01because we know that there has been a problem with take-up rates of those pilot schemes.
03:08in one context, we know that only about 19% of Grab riders had active Percaso coverage.
03:16So moving forward, therefore, the 13th Malaysia plan is eyeing on kind of taking the Madhani framework forward,
03:27which is kind of making sure that there is access to social protection scheme for everyone in the country,
03:35so that then with new provisions, we have a resilient and dynamic social protection scheme
03:43where there is contribution-based coverage for every worker, regardless of their contract status.
03:51So you can also, therefore, think of it, there is now conversation, which we will discuss, of course,
03:56that provision for no-fault accident scheme that would extend protection beyond traditional work settings.
04:03All right, I'm going to also touch on the non-occupational accident scheme of SKBBK
04:10that was approved in principle of 2024, but still awaits parliamentary approval.
04:15Help us understand this.
04:17Why is the delay and what are the risks do vulnerable workers face as a result of this delay?
04:23So if you think about it, that, well, the government is moving from a pilot's phase,
04:30which was 12 Malaysia plan, to now have very concrete, well-defined provision.
04:36But, of course, we are talking about money here, right?
04:38This costs government millions.
04:40And one issue, therefore, is also kind of to work out the details.
04:46For example, what should be the right contribution formula?
04:51How much should a worker contribute per year?
04:55And, again, you know, should it be a flat rate for everyone?
04:59You know, we have different vulnerable groups in the Malaysian economy.
05:03So we have got gig platform workers who are lobbying for a different rate.
05:07So, therefore, I think this is where the government is taking time to kind of find a sweet spot
05:11that, you know, should the number be something like ringgit 84 per worker per year,
05:19going all the way up to 100 ringgit.
05:21So, and this is very important because if we look in a regional context,
05:26think of other ASEAN countries, such as Thailand, where they also have something similar,
05:30social security fund article 40, where informal workers also make a voluntary contribution,
05:37but it's a flat contribution, right?
05:38So, and then in return, they receive cash benefits for non-work accidents.
05:44So this is, I think, where the government is thinking through because once it makes a commitment,
05:50it wants to honour that.
05:52But at the same time, I think the government is cautious not to kind of rush into it
05:56so that it causes new controversy.
05:59And, again, we are talking about a very vulnerable group of the society.
06:02So we need to get the number right when it comes to the right amount of contribution.
06:08And, again, here there are two things.
06:10One is that coverage and the other one is adequacy.
06:14So the government wants to use the fund to provide support to as many people,
06:19vulnerable people as possible on a need basis.
06:22But at the same time, they want to also raise funds that would be adequate to provide the coverage.
06:28And also, let's not forget about the legal side of it, that there are maybe other concerns
06:36from private insurance companies.
06:39And those are also important stakeholders which the government have to listen to.
06:46All right.
06:47This is one of the challenges.
06:48But talking about this, as Malaysia expands social protection,
06:52how can the government ensure the contribution model under the SKBBK is inclusive
06:58and does not overburden the gig worker, we can say, or also the individual employees?
07:07So, yes.
07:08I mean, here we are essentially talking about two sides.
07:11So definitely there is the monetary side.
07:13That's the financial burden.
07:15But also there is the psychological burden where we are talking about individuals who
07:21have suffered trauma.
07:22They're in very informal work setting, you know, suffering from low level of literacy.
07:27But, you know, so we can turn to that point later in that conversation.
07:32But so, yes.
07:33So, again, the issue is that what is the right amount?
07:37and here one idea is the principle of, you know, progressivity that will, you know,
07:45instead of one flat rate, so thinking of some sort of solidarity sharing.
07:51For example, we have informal workers who are the B40 self-employed.
07:58and at the same time we have got high turnover gig platform workers and one idea would be
08:05to for this later group to share a slight, you know, a bigger part.
08:10And again, you know, so here regional examples can be relevant if we are thinking and looking
08:16within Asia, Japan is one example where self-employed persons play a low flat premium
08:26and which is partially subsidised through cross-subsidy in the main employee's accident
08:32insurance fund.
08:34So this is an idea that Malaysian government can look further into.
08:38All right, we want to talk about the social ecosystem protection from the previous until now,
08:46pre-pandemic COVID-19, during the pandemic and even post-pandemic.
08:51Definitely all the structure challenges is a bit different.
08:54Maybe you can share with us the history and the performance of our social security within the Malaysia.
09:00How has it changed until now, especially post-pandemic?
09:03So during the pandemic time, you know, so we have seen how the population was exposed
09:12to multidimensional vulnerability, that we have seen rapid job cuts, we have seen, you know, disruptions
09:21to the life of self-employed workers who could not run corner shops, mamak shops.
09:29And of course, we have also seen the helplessness of non-Malaysians,
09:38thousands of foreign workers in the country who were also exposed to economic crisis.
09:46And we have seen the collective social vulnerability to that sort of crisis,
09:50that when they're in distress, we have seen outbreak of disease through migrant worker,
09:56residential locations and all that.
09:58So what it means is that, well, you know, there was this realization that business as usual
10:03approach to social protection wasn't good enough.
10:05We needed to realign our social security framework, not just with the global framework as laid out
10:15by ILO, where SDG 1.3 target also insists on social protection for everyone.
10:22At the same time, we have realized that we have also our own internal goals.
10:26As we talked, there is the 2030 goal, the government has set.
10:33And of course, there is the Madhani framework.
10:35On top of that, we have the new industrial master plan 2030.
10:39All of that actually requires a higher labor productivity.
10:42And for that, we need to ensure that workers thrive in a very protective environment
10:47so that collectively everyone is able to supply their labor in various capacities,
10:52as gig workers, as, you know, small traders, SMEs, and also those in the informal sector,
11:02widows, mothers working on online platforms, and so on and so forth.
11:07So, therefore, the government has revamped and re-looked at the various pillars of social protection,
11:14which also includes better access to jobs, active labor market policy, better training.
11:19And on top of that, as we are discussing today, the issue of protection in terms of insurance provision
11:26through SOXO, and at the same time, there is talk about affordable private insurance.
11:33So, we are essentially expanding the choice that citizens have alongside non-citizens
11:40so that everyone feels safe, secure, well-protected, and therefore, in that context,
11:45can provide supply labor to the Malaysian economy.
11:52All right.
11:53That is also helping us understand the whole landscape of how our social protection has progressed
12:01until now, especially post-pandemic.
12:03Definitely, this is a very critical aspect that we have to take a look at
12:07to ensure what kind of the right restructuring or reformation that we'll need to integrate
12:13within the social protection ecosystem.
12:15But I also want to take a look at the criticisms on per case of burdensome claims process.
12:21But Professor Nias, please stay tuned with us as we'll be taking a short break,
12:24and we'll be right back.
12:25All right. Welcome back to Pantablanjawan, and we're going to continue discussing about
12:44social protection ecosystem, and we have our guests still staying with us on the line
12:48is Professor Nias Asadullah, the Southeast Asia Cluster Global Labor Organization.
12:52and I want to say thank you very much for staying tuned with us, Professor.
12:56And definitely, on the first segment, you have shared a lot with us the progress of the
13:01social protections or the social structure within the Malaysian ecosystem.
13:07And now, I'm going to take our discussion.
13:09So, what's the criticism of per case of burdensome claims process,
13:13especially for accident victims dealing with trauma?
13:16Does RMK 13, are we expecting that RMK 13 will outline all of this,
13:23any clear reforms to streamline and even humanize the system?
13:30Well, yes, that's the public expectation that, as we speak, it's very burdensome,
13:37and particularly when we are talking about the stakeholder group in discussion,
13:42that informal workers, gig workers, women, widows, so they lack not just financial literacy,
13:50they also lack the usual traditional literacy, numeracy, and all that.
13:55And if we are to imagine the process that they have to go through,
13:59it is extremely challenging and demanding in terms of paperwork.
14:02So, to begin with, someone, you know, for a benefit claim to be made,
14:09they have to complete the PS2 form and then go to the nearest SOXO office.
14:13But that's just the beginning because, you know, it also has to go with the necessary police
14:18and medical reports, and for which they have to appear in person.
14:22And oftentimes, the number of visits can be more than one,
14:27and there may be additional documents involved.
14:29And it means that the time that it takes to complete claim submission
14:37can stretch all the way up to 90 days, which is well beyond Presco's 21 target day.
14:44And, of course, you know, when we are talking about those that are submitting claim,
14:50they have already gone through enough physical trauma,
14:53and they have also very irregular work schedules.
14:56All of that adds to their stress.
14:58Now, therefore, the expectation is for the government to streamline it
15:04and to kind of reduce this to a single submission process
15:10where there can be also provision for auto reimbursement, if you like.
15:15And that can be set to a lower figure, for example,
15:18for submissions below Ringgit 500,
15:23there can be a provision for auto reimbursement.
15:27And this can be ensured if the government invests in digital technology,
15:33for example, to create provision for claims data interoperability.
15:38What does it mean?
15:39Well, it means that for a particular claimant,
15:42as long as the data, personal data is available within the government in any department,
15:47and the insurance company, as well as Soxo, Perkeso,
15:51they all will have access to the same record so that the claimant doesn't have to
15:57provide the same information twice to the government.
16:01And this can be done also, therefore, you know,
16:05in combination with a robust data integration process by, you know,
16:10through digital evidence platform, e-medical services,
16:16think of also e-police reports and so on.
16:18On top of that, there can be added service provided such as trauma navigator service
16:27staffed by medical social workers.
16:30That's another proposal to consider,
16:31particularly for those claimants that are severely injured.
16:36So this is, again, the human side of the current setup that everyone expects,
16:42the kind of setup, the kind of modernization provision
16:45that were absent from 12th Malaysia plan
16:50and the kind of gaps that have been repeatedly highlighted by NGO workers
16:55working with vulnerable groups.
17:00And then probably talking about this reforming the claim process,
17:05what are some of the metrics that we can use or utilize
17:09to measure improvement in the process, claiming process,
17:12and even the user satisfaction?
17:15So, can you please repeat that question again?
17:20Maybe you can help share with us what some of the best metrics
17:25or approach that we can use or introduce within the RMK 13
17:31to improve measurement or we can say improvement in claims processing time
17:37and even user satisfaction?
17:39So, yeah, so one issue that keeps coming up is that of data that will, you know,
17:48so we know that there was an attempt to create a universal database for all citizens in Malaysia
17:56so that we know who they are, their kind of vulnerability, their capacity to contribute and all that.
18:02So, that is one aspect where, you know, so this, you know, challenge.
18:08Every time the government wants to expand the social protection system,
18:12there is this data gap that makes it harder for the government,
18:16A, to figure out how much fund to raise to provide coverage
18:20and B, to figure out what is the right amount of contribution
18:23and for which social group.
18:27So, this is one aspect where the, you know, there is a lack of progress
18:32and where we need to do, what the government needs to do more.
18:36Now, beyond that, of course, you know, so we can also think of other subgroups
18:47within the vulnerable groups.
18:49So, for instance, we have micro enterprises and then we have gig intermediaries.
18:56So, therefore, here we can segregate the system.
19:00So, for example, have a contribution rebates for micro enterprises
19:06with a certain sales figure cutoff.
19:12And then, of course, also introduce some kind of provision for matching grant
19:17for employers during the first couple of years in operation.
19:26The other idea is to sort of think of integrating e-invoicing, for instance,
19:33and talking about gig intermediaries, there can be also provision
19:39for platform-based auto-enrollment.
19:42So, these are some measures that, again, can offer many choice
19:48for the prospective groups that we wish to bring under this social protection
19:57for all framework as we wish to envision under 13 Malaysia Plan.
20:03And also talking about stakeholders, one of the most important stakeholders
20:07in ensuring not only that everyone is our salary is banked in within our bank,
20:13but also to ensure their safety and protection
20:16in delivering all of their jobs and commitment and responsibility.
20:21And maybe this part is for the employee part.
20:23What are some of the incentives or suitable frameworks
20:26that RMK30 will introduce to encourage greater employer participations
20:32in social security, particularly the micro enterprise
20:36and even the employer who's employing informal workers?
20:39So, for micro enterprise, so one idea that I've already talked about
20:47is that of rebate, right?
20:50That will, you know, so micro enterprise with annual sales, for example,
20:54under 300,000 Malaysian ringgit can receive 50% matching grant
21:02on the employer share of percaso contributions during the first couple of years.
21:09But I think the other issue is, of course, that of low wages in general,
21:13that this has been an issue that will, you know, so one idea is to kind of create
21:19more provisions for groups in low income bracket.
21:24But the other idea is also to sort of do more so that there is wage growth,
21:29that, well, they don't have to count on social protection,
21:33that, well, the active labour market policy is revamped.
21:38There is more investment so that, well, we provide better trainings for them
21:42so that they can also kind of upskill, move on to better jobs,
21:47well-protected jobs where employers also have better provisions.
21:51Because, you know, this has been the reality for vast majority of Malaysians
21:55that they are stuck in the low-skill segment of the labour market
22:01where not just pay is low, but the protection from employers
22:05without nudging from the government is also low,
22:08where, therefore, ensuring better job mobility would be kind of a win-win story
22:15where the employer has built-in incentive and jobs with better pay are also those
22:20that have better provisions for child care at workplace,
22:26also better paternity leaves, and, of course, you know,
22:30better provision for work-life balance and so on.
22:32So I think this dual-track strategy is very important
22:35that while we are talking about Perciso considering new provisions
22:40where we have also support for non-work-related accidents,
22:46at the same time, we need to kind of push equally hard
22:48in terms of creating better jobs, better paid jobs
22:54for a broad cross-section of Malaysians.
22:58Probably my last question, Professor Nias,
23:00we know that RMK Tertini is a five-year document.
23:04It's considered as the medium- and long-term planning and development.
23:08In your view, what's the single most urgent reform Malaysia
23:12must prioritize to make our social protection system truly future-ready?
23:17I'm sorry, Professor Nias, you only have a balance of two minutes.
23:20Maybe you can simplify.
23:24So, yeah, I mean, I would like to go back to the, you know,
23:27new industrial must-have plan that, you know,
23:29so we are at a time talking about, you know, industrialization 2.0.
23:35and how we are repositioning ourselves as a regional hub
23:39for futuristic investment.
23:44Semiconductors, we are also emphasizing on TVED
23:47to prepare Malaysian youths for precision farming,
23:53you know, intensive agriculture and so on.
23:57So, therefore, the focus is very clear
23:58that it's about skilling up.
24:01But at the same time, we want to ensure that, well,
24:04those that wish to skill up have equal access to opportunities.
24:09And that's where I think the challenge is
24:12that, well, we want to ensure equal opportunity
24:16by presenting as a very inclusive and resilient social protection system
24:21so that those from underprivileged background
24:23can also be part of this Malaysian dream
24:26that by 2030, we want to become a high-income Malaysia,
24:31you know, specializing in production of complex activities.
24:35And as part of that dream, any citizen in Malaysia,
24:39regardless of their current position,
24:41be that they are a gig worker, a small enterprise,
24:45a widow, single mother,
24:47where they all have access to this ladder of social mobility
24:52where any short-term shock,
24:55be that an accident at workplace or outside workplace,
24:59does not sit back, their life does not hold them back.
25:03As a nation, we aspire to graduate to a new identity,
25:08which is high-income Malaysia, hyper-active in Malaysia for everyone.
25:12All right. Again, I'm so sorry, Professor Nias.
25:15Unfortunately, we're at the end of the session.
25:17Definitely, I want to say thank you very much
25:18from all you've just shared with us
25:20in the face of rapidly evolving labour market.
25:23With what you have shared with us
25:24and what we have discussed,
25:26some of the aspect or approach
25:28that how Malaysia can future-proof
25:30the social security framework moving forward.
25:32Again, I want to say thank you very much
25:33to Professor Nias Asadullah,
25:35Southeast Asia Classer Lead,
25:36Global Labour Organization.
25:37Definitely, all of our discussion here
25:39will be featured in astronomy.com
25:41and across all social media platform.
25:43And that's it.
25:43Discussion in Pantah Belanjawan.
25:45I'm Nina Roswan. See you next time.
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