Can food stamps alleviate poverty better than BR1M?

Street people in the Kechara soup kitchen, June 24, 2014. — Picture by Choo Choy May
Street people in the Kechara soup kitchen, June 24, 2014. — Picture by Choo Choy May

KUALA LUMPUR, Oct 19 — Putrajaya must tighten the recipient criteria for its 1 Malaysia People’s Aid (BR1M) initiative or look into establishing better ways to empower the poor, several civil society groups said, following reports of a proposal to convert BR1M into a food stamp system by 2016.

Center for Policy Initiatives (CPI) director Dr Lim Teck Ghee warned that a food stamp system may leave the federal government with a welfare burden it can ill afford, as it could potentially end up becoming a hotbed for abuse and corruption.

The system, he pointed out, could very easily unravel into a hot mess where middlemen take advantage of poor households looking to make a quick buck off the stamps, even if it means selling at a lower rate.

“If provided with food stamps, such households can be expected to sell or transfer their stamps for a lower value to middlemen or others thereby reducing the impact and efficiency of the stamps,” he told Malay Mail Online in an email interview.

“A mass market may emerge in buying and selling of food stamps which will add enormously to the administrative costs and may be beyond the control of the government,” he added.

Earlier this week, Putrajaya said it was thinking of converting the annual BR1M direct cash payout scheme to that of a food stamp system by 2016.

Finance Ministry secretary-general Tan Sri Dr Mohd Serigar Abdullah said the new system was mooted to make sure the aid is used by the poor to only purchase daily essentials such as rice, sugar and basic foods, and not on other items such as handphones.

Lim argued that there is nothing wrong with BR1M recipients spending the money on handphones or cheap computers, which have now become necessities, and especially if the recipients are not faced with food supply issues.

He said targeted cash payouts like BR1M are the simplest and most efficient way to get aid in the hands of those who need it, but stressed that it needs reform with a stricter and higher income threshold that will cut out non-poverty households among the recipients.

“I do not think the BR1M system is missing out hardcore and deserving poor. The major problem is that it has been designed with political factors in mind and has not been rigorous in its identification of beneficiaries,” Lim said.

Empower’s executive director Maria Chin Abdullah, however, said what Putrajaya really needs to do is establish a social safety net and a whole list of other measures to promote social mobility for the poor, instead of making them continuously reliant on the BR1M “political programme”.

“The money should be in (skills) training, programmes that look into poverty reduction, look at the transport system, look at housing, look at job placement and household bills.

“It is the social safety net that we need to provide. Also minimum wage needs to be implemented.

“They did pass an Act but it has not been implemented... that would help alleviate low income issues, because then you’d have to fix wages according to the rising cost of living,” she said.

Despite the myriad solutions to poverty put forward, Pertiwi Soup Kitchen vice-president Munirah Hamid stressed that it simply won’t work if it’s done in a top-down approach.

She explained that just like any other person, the poor have their pride and that subjecting them to institutionalised aid — which may not necessarily deal with their problems — is as good as emasculating them.

Munirah acknowledged that it is necessary to maintain some form of aid system for those who fall through the cracks, but noted that it shouldn’t be unilaterally decided on by those in power.

“We must admit that we don’t know (the answers), and let us sit together and discuss it. If we come out with a know-all attitude, it won’t solve the problem.

“They (government) need to go down and talk to the poor. Don’t come with your ties and office wear, be informal, because you want them to open up and share things with you.

“When we do it like that, then we can understand from their perspective why they are like that... we’re all learning, and we need to deal with this with compassion,” she said.

The BR1M was first introduced in 2012, ostensibly as a one-off aid payout to help low-income households cope with the rising cost of living.

But the cash handout was later institutionalised, expanded and increase to RM950 next year.

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