- 5 months ago
RM2 billion. 22 million Malaysians. 48 hours.
On Merdeka weekend, the government rolled out Bantuan SARA — crediting RM100 directly into MyKad for every adult Malaysian.
In just two days, over 1.7 million people spent RM110 MILLION, sparking queues, system glitches, and this opportunity for national analysis.
Is this the future of digital subsidies — a blueprint for fuel, healthcare, and micro-finance aid — or a one-off relief that exposes cracks in our social safety net?
Join Tehmina Kaoosji with guests Derek Kok (Jeffrey Cheah Institute) and Vyshnavi Charrlotte (SERI) as they unpack the economics, technology, and human stakes behind Malaysia’s most ambitious cash aid rollout yet.
On Merdeka weekend, the government rolled out Bantuan SARA — crediting RM100 directly into MyKad for every adult Malaysian.
In just two days, over 1.7 million people spent RM110 MILLION, sparking queues, system glitches, and this opportunity for national analysis.
Is this the future of digital subsidies — a blueprint for fuel, healthcare, and micro-finance aid — or a one-off relief that exposes cracks in our social safety net?
Join Tehmina Kaoosji with guests Derek Kok (Jeffrey Cheah Institute) and Vyshnavi Charrlotte (SERI) as they unpack the economics, technology, and human stakes behind Malaysia’s most ambitious cash aid rollout yet.
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NewsTranscript
00:00Hello and welcome to Niaga Spotlight with me Tamina Kauci. Niaga Spotlight takes us through
00:12the week in economic analysis and future affairs. Now today on analysis our spotlight falls on the
00:18hundred ringgit SARA rollout and looking at whether it could be a subsidy revolution or
00:23just a stopgap. Now over the Merdeka weekend the government rolled out Bantuan SARA, the
00:29hundred ringgit credited into the mycards of 22 million Malaysians injecting roughly two billion
00:34ringgit into the economy overnight. Now in just the first two days more than 1.7 million people
00:39had already spent 110 million ringgit at stores nationwide but this surge wasn't without strain.
00:46Terminals buckled, queues grew and the government had to boost the mycasse system's capacity by 20%
00:51just to keep up. And yet the bigger story goes beyond glitches. For some Malaysians 100 ringgit
00:57disappears perhaps in a cafe meal, a treat. For others it feeds a family for a week.
01:03That relativity reminds us why design matters. Is this the start of a digital subsidy revolution
01:08that could one day potentially deliver fuel, health care, even microfinance? Or is it a one-off
01:15relief that exposes more flaws than fixes? This morning on Niaga Spotlight we unpack the economics,
01:21the technology and the human reality behind the Bantuan SARA hundred ringgit rollout.
01:26An absolute pleasure to welcome to studios now. Looking at Derek Cox, Senior Research Analyst
01:31with the Geoffrey Chan Institute on Southeast Asia at Sunway University. Joined together with
01:35Vishnavi Charlotte, Program Manager with Social and Economic Research Initiative, Suri.
01:41Very good morning to the both of you. Thank you so much for making time. How are we both doing?
01:45Great. Thank you so much for having us, Divina. Thank you.
01:47Thanks so much for having us on the show.
01:49Fantastic. So Derek, perhaps we can get started off by setting the scene and looking at the digital rails.
01:55Of course, plenty of quite justified criticism has also come out for the hiccups that were faced
02:02with the hundred ringgit rollout. But if we, let's say, move the SARA onto open e-wallets,
02:08such as we've got Do It Now, QR, we've got GrabPay. How do we then balance ease of access with
02:14the risk of leakages or even potential misuse? Thank you for that question. Whenever we speak
02:20about welfare programmes like SARA, the question that we have to grapple with is whether do we want
02:26to prioritise reaching those who deserve it or do we want to exclude the wrong people who don't deserve
02:34the aid? It may seem a very unimportant distinction, but historically all over the world,
02:41we see that a lot of costs and resources are spent on making sure that the wrong people do not get
02:46access to this kind of programmes. So when we talk about widening access and we talk about what do we
02:51want a functional, progressive social protection system, how does that look like? It basically,
03:00we should prioritise access to the most, if possible. So, and when we talk about leakages,
03:07right, you know, you mentioned leakages, you mentioned potential barriers. There's been a lot of
03:12administrative systems that have been built, yeah, to make sure, to ensure that we reach the right
03:19people and we exclude the wrong people. We've seen how in Malaysia, for instance, the petrol subsidy
03:24scheme in 2019 cost about 25 million. So when we speak about leakages, we always assume it's related
03:31to the programme itself, right? What kinds of potential abuse can arise? But we don't talk about how when
03:36the administrative system that has been built to exclude the wrong people ends up being a leakage
03:43in itself, you know, 25 million to set up a software system just to do that, whereas that resource could
03:50have been directed directly towards the right yet. We also need to talk about leakages from restrictive
03:55options itself. You know, for instance, Sarah, you know, you are only allowed to purchase from 14
04:01categories, right? That's right, exactly. Now, I think you've made some really salient points over
04:07there, but at the same time, looking at systems that don't cost us too much, just the point of
04:11reflection, the fact that by the end of 2024, about 2.6 million do-it-now QR merchants had already
04:18gone live everywhere around Malaysia. So that might be an example of showing us that scaling is
04:24immediately possible and you do not necessarily need to invest that much in a closed-loop system.
04:30Exactly, exactly my point, because these systems already exist. And in Malaysia, I think the use
04:35rate for e-wallet system is about 88%, which is really, really high. Even in rural areas, not just
04:41urban hubs, right? Yes, 88%. And in fact, in rural areas, for instance, where, you know, digital access
04:45is a problem, this can perform as a way to incentivize the adoption of more digital tools and again,
04:51become a blueprint for the government to, you know, use this as a welfare redistribution modality.
04:57Absolutely. And we also have regional neighboring examples too. Singapore has its CDC vouchers,
05:02which actually show wide access can actually work. And at the same time, it has real-time
05:08fraud detection built into the system. Very interesting indeed. Vaishnavi, I'd love to go
05:13into Siri's perspective and your work with vulnerable groups. And first of all, let's lay it out for
05:20everyone watching. 100 ringgit stretches very differently depending on the socioeconomic
05:26background of individuals or let's say a rural family in East Malaysia versus an urban renter in
05:32KL. Let's dig deeper. Okay. So I think when you think about how 100 ringgit stretches between the
05:37urban and rural, right, it comes down to living cost. So living costs in Malaysia vary greatly between the
05:42urban and the rural. And according to the Department of Statistics, Malaysia, in 2023, the average monthly
05:48household expenditure for the urban household averages around about 5,040 ringgit. Whereas when it comes
05:55to rural households, it averages around 3,631 ringgit. So when you think about it that way, for urban families
06:02in KL, 100 ringgit can help ease part of the grocery burden for the month, but it does not meaningfully
06:08reduce the overall stress of rising food costs and rising food insecurity in the urban areas. So with nearly 80%
06:16of Malaysians now living in urban areas, food security is less about availability and it comes
06:22down more about affordability. And if you take a look at rural communities, the cost of living appears
06:28lower, mainly because many households rely on locally sourced produce to put food on the table. So this
06:35doesn't necessarily mean that a hundred ringgit stretches significantly further either. So access and
06:40availability remain critical challenges in the rural communities. For families in Sabah and Sarawak,
06:45if you think about it, where poverty rates remain among one of the highest in Malaysia,
06:49rural households are often more vulnerable. So poor roads, limited connectivity, especially reliance
06:55on goods shipped from peninsular Malaysia mean that disruption from either weather or even fuel price
07:01hikes makes food availability unstable and it also drives up costs. So you're adding on those logistics
07:07costs in addition to the fact that it already costs you X amount to get there.
07:12Yes. Yes. So if you think about it, if it already costs you X amount to get there,
07:16shipping these products from peninsular Malaysia to Sabah and Sarawak will also increase the price
07:21there. I remember on my visit to Sarawak once, I saw a loaf of bread cost it close to nine to ten
07:26ringgit. And that generally shocked me. And that's when I realized that a lot of these goods,
07:31the prices are being hiked up to cover the transportation costs. So among that, the approved list of items
07:37under the Sarawak program includes staples like rice, oil, instant noodle, cleaning supplies,
07:42like what Derek mentioned, the 14 categories, right? So these are valuables that, but they only cover
07:47around 10% of an urban family's grocery bills. So leaving out essentials like meat, vegetables and
07:52other raw ingredients that most Malaysian households depend on for food, if you think about it.
07:56So for rural households, the list is useful, but not always practical. So many already grow and source
08:03their own raw produce, making their living costs over there lower. But if you add in the aspect of
08:08these 14 categories, does it really help them in terms of this one-off hundred ringgit cash aid?
08:13So that's the kind of things we need to think about. And another important aspect is that hundred
08:18ringgit is universal for all Malaysians above 18 with a MyCard, right? So this means whether you're
08:26a single renter in KL or even if you're a rural parent supporting children, the relief is the same,
08:31but the lived impact is different. So for wealthier households, maybe how many adults also there are
08:36in a home, which in a way also did in a sense contribute to the overflow of individuals who
08:42were there at payment terminals over the long weekend. And I think if you look at it, I think
08:47when you think about a household with maybe two children, two parents, two children above 18,
08:51that's multiple MyCards trying to be used for maybe a single grocery bill purchase. So thinking
08:55about the logistics of that as well should have been taken into consideration before day one
09:00of the rollout of the SARA program. So another thing to consider is for wealthier households,
09:06right? The amount may feel small and symbolic, but many donate their aid to others in need,
09:11which is a great thing to see. And it shows Malaysian support for solidarity, but for lower income
09:16households, it is helpful, but still insufficient to address the deeper challenges of affordability.
09:21Yeah, absolutely. And it's very interesting because preliminary qualitative questions that have
09:28been posed to store owners such as Maiden, etc. that saw a huge volume of SARA uptake,
09:34they've already clearly stated we are seeing rice, eggs and bread and big bags, 10 kgs of rice,
09:40you know, as well as trays and trays of eggs and even loaves and loaves of bread being top on the
09:46list of what Malaysians are redeeming with their 100 ringgit. Derek, so to dig deeper into the
09:52categorisation of this specific 100 ringgit MyCard rollout, tell us more about what are some of the
10:01risks of, in that sense, dictating what can and cannot be purchased and perhaps looking beyond that
10:08paradigm too. Yeah, I think ultimately find that individuals know your finances best, right?
10:14Sure. Financial needs change every month, every week, every day, right? And a lot of times those
10:21financial needs don't just revolve around how basic household items, which is what these 14 categories
10:28revolve on. But the interesting thing as well, that aside from these 14 categories, you're actually
10:33not allowed to purchase fresh fruits, fresh poultry, those are excluded. So what is the rationale
10:38behind there, right? That's the rationale of, I think, essentials versus also all the items you
10:44need, nutrition value. Yeah, and of course, you know, and these are products with nutrition value,
10:50which in Malaysia, we actually have issues of affordability when it comes to more nutritious
10:54items. And the interesting thing is that usually we will impose this kind of restrictions for
10:59programs to avoid the use of temptation goods, for instance, alcohol and cigarettes. Although
11:05something to share, evidence actually shows that in many countries, you know, cash transfers and
11:11welfare aid like this don't actually increase the use and purchase of tobacco and alcohol. And in
11:16fact, if the government's rationale of having these 14 categories was to prevent the use of this
11:22purchase of this kind of temptation goods, instead of 14 approved categories, the government could just
11:27have one restricted category, you know. And it still doesn't answer the question as to why
11:33essential items which are nutritious, such as fresh goods are not included.
11:38Absolutely. I think you've raised some very interesting points there, including the fact that this is
11:43actually supported by World Bank global data, which shows less than a 3% incidence of misuse when it
11:49comes to rolling out without restrictions as well. Neighboring Indonesia, they also quite recently updated
11:57their food delivery program, the program Sembako, to actually widen the scope of what items are covered.
12:03So it's clearly showing that there are regional examples. But what would it take to perhaps move away from
12:11the idea around having to dictate in a rather paternalistic manner, what those who are particularly from the B40
12:21vulnerable groups can and cannot purchase?
12:25I mean, it's sad because the assumption when it comes to this kind of policy making is that the B40 lack
12:31financial literacy or, you know, a certain savviness when it's when it comes to purchases that, you know,
12:38again, it's the state paternalism that it knows best and the poor and the B40 don't know any better.
12:43But research and data and evidence doesn't, you know, support that. In fact, we find that it is the
12:50excess, the issue of excess and affordability, that is the main hurdle over here. So using, for instance,
12:59like, you know, if we widen up accessibility to this, to SARA, what we can do is actually empowering,
13:06you know, individuals to make informed decisions when it comes to their financial situations. Because ultimately,
13:12like I mentioned earlier, if you are a parent with a child, your financial needs change all the time.
13:18It could be the fact that tomorrow, you know, my child is sick and I need expensive antibiotics.
13:23Next week, my motorbike breaks down and I need that for my job, you know, in an informal market.
13:29That's right.
13:29All that affects income as well. And when we restrict, although, you know, it's well-intentioned,
13:36when we restrict the spending of recipients, what we're actually doing is creating
13:42perverse incentives for people to try and beat the system because the reality is that they're
13:46not getting the aid that they need. Just to quote an example. A few years ago, we had the program,
13:52book voucher program that was given out to students. I'm not sure if any of you remember that.
13:56That's right.
13:57What we saw was that people were actually taking those book vouchers to bookstores and trying to
14:02sell them for a lower value. Now, that's an example of a leakage in government spending,
14:07because let's say the government gives you 200 ringgit, you only get a hundred ringgit because
14:11the other hundred ringgit goes to the shop that you sold those vouchers to. Why does this happen?
14:16It's because the aid that you're getting, the need that you have is not being met.
14:22It's a mismatch, clearly, in design. Yeah. So I think perhaps what needs to be done at this point
14:30in time, because we also have till the 31st of December for the rollout to be complete in this
14:36cycle, we can actually put in place mechanisms that hopefully help to address this, right?
14:42Now, Vishnavi, then going deeper into looking at trust under strain when such systems are rolled out,
14:48right? So when people are queuing, transactions are failing, of course, it does damage a certain
14:54amount of confidence in government aid. So how can this be constructively addressed now that,
15:00of course, it has clearly come out as a potential issue? Thank you, Tamina. So if you think about
15:05it, right, one of the SARA program's greatest strength is its simple redemption system via the
15:11MyCard. So this ease of access makes it user-friendly for millions of Malaysians. But as Suri has
15:17highlighted in our recent statement, when systems encourage glitches and experience of receiving
15:23aid matters just as much as the aid itself. So how people get that aid and how they get to redeem
15:29that aid matters so much more than receiving that aid itself, because that is what increases people's
15:35trust in the government, right? So if system fails and the queues are long and people have to pay in
15:40cash when their credit doesn't come through, these are things that reinforce the distrust that we have
15:46in the government. So on 31st of August, we saw how transaction failures and long queues created
15:51real frustration. A lot of recipients faced both practical and psychological harm because of this.
15:56So some even paid cash despite having the SARA credit. So these incidents can shake public trust.
16:02When promise aid does not drive smoothly and households start doubting whether systems are reliable,
16:09this brings up a whole different myriad of problems. So even if the problem is temporary,
16:14the memory of failure, it lingers. So confidence is especially fragile for vulnerable groups if you
16:20think about it. If some succeed in redeeming the cash aid but others are turned away due to like
16:25technical errors, it creates a source of unfairness and it also breeds resentment. So elderly people,
16:31the rural, the poor, even undocumented individuals when it may even stop trying believing that the
16:37system is stacked up against them. So the broader implication is that the SARA program and similar
16:43programs are highly visible symbols of government care. But if the system fails, it doesn't just
16:50damage the program, it risks undermining faith in Malaysia's transition to a digital public service
16:56more generally. So in order to prevent this, some recommendations and some practical measures that
17:02we have included is basically staggered go live. So making sure that when cash aids are dispersed,
17:08we have a staggered release so that there's no overload in the system. So I think with the SARA program,
17:13when close to millions of Malaysians were going and redeeming everything on 31st of August,
17:17systems shut down, people were frustrated. So I mean, it's a very symbolic day, but it's also a
17:22national public holiday. Yes, exactly. So we need to think about the feasibility of that. So
17:28thinking about how we can stagger the rollouts. Another thing that we can do is also like real-time
17:33status dashboards. So making sure that the system is monitored, you know, whatever complaints that
17:39come in, appeals that come in are addressed live in live. And so the people can see transparency that
17:45the government is collaborating with them to fix these issues. So to build more trust within the
17:51people and the government. And then also another thing is, for example, when people had to use their
17:56own cash when the credits didn't approve, making sure there's some kind of fallback. So either
18:02secure e-vouchers or even some sort of claim later reimbursements for families who've had to use cash,
18:07but later on can claim back from their SARA credit. So these are all things that we need to think about
18:13when rolling out such a big program, especially on such a symbolic day. So the key message here is
18:20relief must be reliable. Malaysians have shown that they are ready for digital social protection
18:26and the task now is ensuring that every single transaction builds rather than erodes confidence
18:32in the government. Absolutely. And I think you've raised a couple of key areas there for reflection
18:37and also improvement. In particular, of course, tempers ran high because some families had to actually
18:45pay a little more than what was anticipated because they were not able to redeem the 100 ringgit per
18:51individual. So that points to the fact that perhaps you need to have those immediate vouchers on standby
18:57for, let's say, a certain proportion, maybe 20 percent of transactions instead of, yes, it was admirable
19:03how the MyCase system was able to be boosted in capacity by 20 percent quite immediately. But the moment
19:10peak hour came the next day on the 1st of September, once again, the surges caused systems to crash.
19:17Yeah. Anything that you're observing overall from this areas? I mean, the other thing is that it's not
19:22only the fact that some families had to pay cash, but many families had to abandon their trolleys
19:27at these places and walk away. Now, of course, social media says that it's because, you know,
19:31they couldn't get a bargain. But at the end of the day, these aren't luxury items.
19:35These are absolutely essential items like eggs, rice and bread. And families are literally walking
19:40away, you know, from a cash point because they don't have the 100 ringgit that they were supposed
19:46to be able to use. And I think that it shows us how dire the situation is when it comes to,
19:52you know, cost of living. Although many are saying, oh, yes, this is just, you know,
19:56an attempt of Malaysian citizens trying to get a good bargain.
20:00Yes. But again, like I mentioned, they're not luxury items. They're absolute essentials.
20:06Thank you. Thanks, Derek. Thanks, Vishnavi. We do take a short break.
20:09And we'll be right back after to continue the discussion. Don't go anywhere.
20:30Welcome back to Niagara Spotlight. Still with me, Tamina Kastri. And today we're discussing the
20:35100 ringgit SARA rollout and whether we're looking at more of a subsidy revolution
20:39or perhaps a stopgap measure. Derek, continuing with the conversation and looking in particular
20:45at income thresholds. Now, many Malaysians, of course, they earn uneven wages. So in the case of
20:53such a rollout and also future potential rollouts, how do we actually look at families
20:58who may then risk being cut off once they move up perhaps even just a few tens of ringgits
21:05into a different income category, but then that does not really decrease their vulnerability overall?
21:11Yeah. Thanks, Tamina. I think what you just described there is a textbook case. In social policy,
21:16we call it the cliff effect. And literally what happens is that when the income increases even
21:22a little, the cliff effect is such that they may even lose more in terms of the subsidies and aid
21:28that they get simply because the income went up just a little. And this is an inevitable and direct
21:34result of targeting mechanisms. So when you deliver aid strictly based on income and poverty targeting
21:42mechanisms, this is a direct effect. So how do we move forward here, right? And how do we avoid that
21:48happening? The answer is basically moving towards progressive universalization. That was quite a
21:56mouthful. And really, we see that actually in SARA. So although, you know, critics have been pointing
22:03out that the 100 ringgit may not be enough. But what I see SARA as is that it's a potential game
22:10changer because in Malaysia, and actually in the social policy world, a lot of focus is on poverty
22:16targeting. Let's look at the B40. But the reality here is that in Malaysia, the vulnerability of many
22:24working individuals in Malaysia is such that they are just one sudden financial shock or emergency away.
22:30So instead of the B40, we're looking at data that perhaps shows us that it's not B40, but B80,
22:36simply by how vulnerable large segments of the population is, which tells us that a large segment
22:43of the population require aid and help from the government. So what, how do we move forward,
22:48right? And I mentioned SARA because it is the first time that something has been given universally
22:55without looking at income. And that is a potential window for us to basically normalize and sensitize
23:02the idea of more universal welfare programs. Of course, that requires costs, that requires money,
23:08a lot of resources. But how do we do it? We need to move towards income or poverty targeting,
23:14towards a life cycle approach, which looks at specific vulnerabilities at each life cycle of a
23:20person. And some of the specific vulnerabilities are, for instance, at childhood. One of my policy
23:26recommendations for many years now has been to push for a universal child grant, because that is an
23:31incredibly sensitive period, but also it is actually the lowest and cheapest investment with the highest
23:38ROI. Exactly, because that's where you actually are able to intervene on a national policy level,
23:45if you want to be able to address childhood stunting, malnutrition, and the entire dimension
23:51of adulthood issues that comes along with. It's also very interesting to note that of our
23:56e-invoicing rollout will be able to reflect real-time income. But cliff edges, once again,
24:03they risk hurting families when they move perhaps just even a couple of ringgit amongst income classes.
24:09So there's much to be pondered over here. And also the action does need to be taken, perhaps a modeling
24:15from OECD countries where they actually have a grace period for cutoffs from targeted
24:21subsidies so that there is enough time to actually measure qualitatively and quantitatively whether
24:29or not a family ought to be definitively moved into a different income class. Yeah, lots to say over
24:34there. But Vaishnavi, going into looking a little broader and casting the net with an eye towards what
24:41will be rolling out later this month in September, we've also got the RON95 targeting due later. And what
24:47lessons from SARA's 100 ringgit MyCard rollout could be perhaps baked into fuel subsidies before the time
24:55actually comes? Thank you, Damina. So if you think about it, the SARA rollout is already showing us a
25:01lot of valuable lessons. Even though well-attentioned, there's always areas for improvement, right? So the
25:06most important is that single channel systems are quite fragile and they don't necessarily work. So when
25:13demand surged on day one for the SARA program, terminals struggled and the trust was affected.
25:18So these are exactly the kinds of frustrations we want to move away from at petrol stations when the
25:24RON95 subsidies do come in at the end of the month. So where volumes are going to be far higher,
25:29people coming to petrol stations and also where emotions might run a little bit harder, right? So
25:34some lessons that can be directly applied to the RON95 rollout from the SARA program is, let me take you in
25:40phases. So before the rollout, like the SARA program, one thing that we can gain from that
25:45is that we should ensure that MyCard holders can check their, if they are using the MyCard to check
25:51for eligibility, we should make sure that people can check the eligibility in advance, like how they did
25:55for the SARA program on the MyCardSea app or another official channel. Another thing is to publish clear
26:02eligibility criterias and maybe also a fact sheet well before the launch date. So answering questions like
26:09who is eligible? How do these quotas work? What if the pump time's out? How do I redeem this? So
26:15these kind of questions that people will be asking before the day one, there should be a fact sheet
26:21that people can preempt it in a sense. Yes, so kind of make sure we answer these questions before people
26:25even have them. This will show preparedness on the government's end as well, which increases public
26:31trust, right? So clear messaging prevents resentment and also confusion. And finally, we could also
26:37conduct load tests and simulations for the first day surges. So weaknesses can be addressed ahead
26:42of time so that we can identify the gaps and give solutions based on whatever gaps there are.
26:48And then if you let me take you during the rollout. So during the rollout, we can consider
26:52a staggered launch similarly to a thing that we could have done for the SARA program, right? Making sure
26:57we staggered the launch in terms of region or even ID number to reduce pressure on the system like we did see
27:03for the SARA program. It's interesting because if you want to be staggering it according to IC numbers,
27:08you could very easily ensure that those who are elderly, for example, would be the ones to be able
27:14to get first in line. Yes, correct. So and then another actually one of the most important thing
27:20that I think is important is to train frontline petrol staff, which they could have done for the SARA
27:25program to train cash registers, a mighty, a mighty employees, all these essential workers so that
27:32they know how to respond when people encounter problems. And I think when they see the preparedness
27:38that these staff members have, they will naturally have the trust in the government and trust in the
27:44system. So the way frontline workers handle these issues can make the difference between public
27:49frustration and confidence. And then finally, after the rollout, we can provide clear entitlements at
27:55the nozzle. So for example, showing how many leaders or how many ringgit is left in your benefits,
28:01maybe set in the receipt that you get at the nozzle or even an SMS that can be sent to an automated
28:07system. Yeah, so that kind of shows them how much they have left and also it encourages transparency
28:13and trusts and helps people self-manage and self-ration. So the principle is that engineer
28:18trust by design. So with strong systems, transparent communication and also prepared front-light support,
28:25Malaysia can avoid the frustration seen during SARA's first days and instead demonstrate competence
28:30and care. Exactly. So there's much to be learnt about it. But at the same time, I think what's really
28:35important is having it inbaked into the system to have offline backup, because potentially speaking,
28:42it's going to be a very different scenario unfolding at petrol pumps versus at supermarket or store
28:48checkout registers. Derek, let's go deeper from cash to outcomes. Let's say if a rollout such as
28:55SARA, either 100 ringgit or otherwise, becomes a quarterly disbursement. So what real difference could
29:03it actually make over time and actually even very quickly in the short term to child nutrition or stunting
29:10rates? Because this is, of course, an issue that you have long worked on. Yeah, thank you for that,
29:14Tamina. I think the value of SARA isn't exactly its function as a welfare aid. Again, RM100 is a small
29:23amount and now it's a one-off. The value is it's an experiment for how we can launch these kind of
29:31welfare aid programs in the future. And of course, one of it, like I mentioned, is pushing for a universal
29:36child grant, right? It's giving us a lot of valuable lessons in how we can roll out the mechanisms and
29:43especially looking at program delivery and design. And my opinion is that the current system is actually
29:49too complicated. You know, if we want to really impact outcomes such as child nutrition, child stunting,
29:56of which in Malaysia, we have one in five children under the age two who are stunted, a number that is
30:03higher than some African countries even, right? We need to move from one-off aid that targets just the
30:11poor to something more universal, as I've always, as I've been mentioning. So to just move to quarterly
30:17you wouldn't really move the needle. And because, for instance, child stunting happens in the first
30:23thousand days. That is the most critical, crucial window of a child's life. But instead of making,
30:30you know, SARA a quarterly thing, we can actually use SARA's mechanism of universal payments and use it to
30:37implement a universal child grant that, but we need to increase the frequency, right? So what we are doing
30:43with SARA isn't actually about the 100 ringgit itself, but it's about mainstreaming the idea that
30:49we should give universally. And for me, that can start with giving to children. Give it to children
30:55who are zero to two years of age, which is the most sensitive time in a child's period of growth.
31:02Give it monthly, give it 100 ringgit, or I would say higher, but otherwise give it monthly
31:09without restrictions, and you can give it to mothers, right? And what you can do then is you
31:14can really see effects that really impact the growth of a child, but also the productivity of
31:20a nation in the future. Exactly. And it's all about measurable outcomes as well. So perhaps mechanisms
31:26that may encourage more consistent universal rollout and allocations for children, Derek,
31:32what might you recommend? Perhaps maybe a pilot study that tracks maybe dietary diversity
31:39and actually shows us, you know, perhaps month on month and quarter on quarter,
31:44how this target group of children are actually faring better. I think in the ideal, right, systems
31:50like that are great. But like I said, they're really complicated, complex, and highly expensive.
31:55Instead, I think we need to trust parents to make the right decisions. And data from all over the world,
31:59where there have been universal child grants show that when given an amount of money, even when
32:05there are no conditions attached to it, that you have to spend it a certain way, parents actually
32:09spend it on their children, right? And what we're doing here for a welfare system, like I mentioned,
32:15is to meet the people at their place of need. And raising a child has many different pain points.
32:21It's not just nutrition, right? Sometimes it's education. Sometimes it's having toys in the house.
32:26And there's been studies that looked at how stunting rates will actually improve if they are simple,
32:31simply the fact that toys exist in the house. Whereas if you talk to someone else, they may say that
32:37you can't use SARA to buy toys, because that's not essential. Very true. It's actually about looking
32:42at development as a holistic arc, rather than just looking at it. All right, food on the table, but is it just
32:49rice, bread, etc. Very well said indeed. Vishnavi, let's dig deeper into looking at privacy as well
32:56as, of course, dignity of those involved and whose data has been collated. So how do Target help, perhaps
33:02more precisely, without turning low-income Malaysians into data points who are just tracked across
33:09agencies? Because, of course, what Derek has just told us about, that would be the ideal big picture
33:15to be moving towards. But let's focus on where we're at right now. I think this is a very crucial question
33:21to ask, right, as Malaysia moves towards a more digital safety net. So SARA has shown how targeted
33:28support can be delivered at a large scale. But the challenge is balancing precision with, like you said,
33:33dignity, privacy and trust. So the risk is over centralized databases, is that people feel reduced to just
33:41mere statistics. And we're much more than that. We're human. So a single outdated entry, like maybe a car
33:47ownership or even an old address, all of this could wrongly disqualify a household. And these are instances
33:53we want to move away from. So communities may also feel like they are under a lot of constant surveillance,
33:59reinforcing a stigma that they are, that older recipients and rural families may not have the literacy
34:05to access or challenge their records if mistakes occur. So instead, what we can think about, we
34:12recommend a less intrusive and more practical approach. So we could collect only the minimum
34:18necessary data. So like household income band or even household income size, avoiding overreach.
34:23A better thing to do is also to use proxy indicators. So like Derek mentioned earlier, using maybe data like
34:30electricity usage or even school aid enrollment and health clinic records, using these kind of data
34:37to see which households need this kind of aid without having to cross-check every single data point or
34:45across every single ministry. And also empowering community level validation, right? Talking to village
34:51heads, penghulus, resident committees, all of this to confirm eligibility, building transparency and also
34:58shared ownership among government and the public. At the end of the day, I think when you increase a
35:04public-private partnership and also collaboration, this will only build trust among government and
35:08the people. And that is what we want at the end of the day. So also designing systems where eligibility
35:14data expires automatically and there is a need to re-verify annually. So this ensures that we reduce
35:21the sense of long-term surveillance for people. And at the same time, we should also recognize that cash
35:27aid is never really a bad thing. It gives households the flexibility and respects the ability to make
35:33choices for themselves and for their families. Because at the end of the day, like Derek mentioned,
35:37families know best about their own financial situations and their own bills. So with the budget
35:42coming up, right, this is also an opportunity to explore expansion of cash-based assistance,
35:49either by increasing the amount or even widening the categories to include other essential items like raw
35:55food, vegetables, meats, fruits, to ensure aid remains relevant and responsive. The aim is to be precise and
36:03fair while making people feel supported but not surveilled. Understanding that relative perishability of
36:10foods also quite often leads into those being the more nutritious ones on the plate, right? So moving into
36:17closing out the discussion though, Derek, let's look at safeguards before scaling. So let's say before
36:22this similar system or an improved one is used for fuel or even healthcare subsidies, what basic checks
36:28and balances need to already be in place for the policy makers to definitely have in mind? I think
36:34instead of checks and balances, I am all for actually simplifying it. So currently we have 14 approved
36:40categories, like I said. Abolish them, you know, and let people make the decision as to what they want to
36:46purchase. If the government is concerned about temptation goods, cigarettes, alcohol, vape, have
36:52one single restricted category and then that's it. Simplify it, absolutely. Simplify it. And yes, be
36:57cognizant that that is an area that you want to ensure does not. And the other recommendation I would
37:02make is that instead of the current credit system, we should actually use actual cash transfers and of
37:09course that can be leveraged using existing e-wallet platforms or just a simple do it now or using
37:15digital bank transfers. Let the cash be given out directly and that also avoids system crashes
37:23because when you have cash, it's up to the individual how they want to spend it, where they
37:28want to spend it. And here's the thing about cash, it has a really powerful multiplier effect that could
37:32really uplift SMEs, you know, small businesses, not just chain businesses that are providers that are
37:38registered under the SARA program. So I think instead of looking at restricting the program even more,
37:44we should actually look at loosening it because that also avoids a lot of the problems that have
37:51that we've been seeing with SARA. One of the things that people point out is that they don't know what
37:56items are included in the 14 categories. They go into the shops, they ask the shopkeeper and sometimes
38:02it even has the MyKase or SARA logo, but that's not listed in the barcode. In fact, there is an app that
38:08exists for you to scan the barcode to see whether that item is included or not. Why all these hurdles,
38:15right? Simplify it, make it easy, empower the rakyat to make the decisions that are best for them.
38:21And in fact, when you decentralise this decision making, it actually costs less than building this
38:26kind of expensive system. Because centralisation clearly has deep fragilities that have already
38:32been exposed. So let's widen that net and also the coverage. Vishnavi, stopping out from stopgap to
38:39safety net. So if the SARA is to outlive its hundred ringgit headline, what roadmap, in brief,
38:45would you propose to make it lasting as a safety net and one which we can build on?
38:51Yeah, so SARA has already shown its potential by expanding beyond a one-off 100 ringgit gesture to
38:57target monthly assistance up to 2,100 ringgit annually for poor and hardcore poor households
39:05by broadening access to Sabah and Sarawak. So the next step is ensuring that this evolves into a
39:11permanent trusted safety net. So in terms of like, in immediate terms, in terms of stabilisation and
39:17restoring trust in the system, we should guarantee that reliability by fixing transaction glitches and
39:24preventing these long queues either in petrol fuel pumps or even in grocery stores, ensuring that
39:30the ease of accessibility is there. And also publishing real-time dashboards. So like I mentioned,
39:36showing uptake success rates and also incident resolutions to gain back public trust in the
39:41system. And adjusting the benefits to reflect inflation baskets of food and fuel so that the
39:47value of the cash rate is not eroded. And providing easy appeal channels for households to update their
39:54eligibility or even correct the eligibility if they are not eligible but feel as if they need to. And then
40:00in the medium term, broadening and deepening support, we can diversify the benefits into food vouchers,
40:06school supply credits, utility rebates and not just cash. So like what Derek mentioned, instead of
40:12putting more restrictions, let's widen it, let's make it more inclusive to all these other areas where
40:19people have a lot more financial needs above just groceries and fuels because that's not just what we need
40:24in our lives, right? And then linking SARA to skills training, micro enterprise support, child care
40:30subsidies, so it becomes a bridge and not just a transfer. And perhaps even areas for exploring
40:36microfinance in the future. Derek, Vishnavi, thank you very much for the very rich discussion.
40:41Well, if Malaysia gets this right, we won't just be talking about one-off handouts but about a
40:44permanent digital infrastructure that can potentially deliver fuel, healthcare, even nutrition support.
40:50A dignified safety net with precision and trust. The question we leave you with, is SARA the first
40:55step in a subsidy revolution or will it be remembered as a one-hit wonder? That's all we have time for
41:00today. See you again next week with more economic analysis and insights. I'm Tamina Kowstri,
41:04signing off for now. Here's to a productive week ahead.
41:20I'm Salem.
41:39Let's pray.
41:46Let's pray.
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