A new Malaysia cannot be built if economic deprivation makes the poor anxious and more susceptible to racial politicking, says Jeyakumar Devaraj.
Pakatan Harapan (PH) leaders are keen on being seen as pragmatic and business-friendly. No doubt, we are part of a globalised economy and, in the medium term, we have to survive in this milieu.
But we need to keep reminding ourselves that being too business-friendly can, without our intending it to be so, further marginalise and impoverish the poorer strata in our society, who are predominantly (around 75%) bumiputera. And we must not forget that in the 2018 general election, only 15 – 25% of the bumiputera population voted for PH.
If PH wishes to avoid being a one-term phenomenon, it has to win over a larger portion of the bumiputera voters before the next general election. One of the ways of doing so is by paying attention to and resolving at least partially some of their economic problems.
This write-up is to suggest some of the steps that the PH administration might want to adopt to tackle the problems of the bottom 20% of Malaysian society (B20).
A. Housing for households
Housing status can help us identify the truly poor so that government aid can be targeted more precisely. The following groups could be targeted:
There still exist villages in our towns where homeowners do not have title deeds (grants) to the land upon which their houses were built. Generally, they are among the poorest in our urban centres – families who can afford better homes will not continue to live in run-down wooden houses which leak in an environment that is poorly maintained and prone to flooding.
These poor families are being forced out by urban development projects, forcing them to move into yet another squatter settlement because they are unable to afford a house with an official title deed. Many of them cannot afford to buy a house even if it was priced at RM60,000.
This category of urban poor can be aided in two ways:
- By giving them the title deed to the land they are currently occupying. We should then improve the surrounding infrastructure such as roads, drainage and rubbish collection.
- By building rent-to-own People’s Housing Project (PPR) homes (with a monthly rental of RM120) for the current residents of these peneroka bandar kampungs (regardless of whether they are owners residing in these houses or tenants).
A solution to their housing problems will help stabilise their financial standing and raise their capacity to better provide for the nutrition and education of their children.
Residents of low-cost flats
The conditions in many low-cost flats, where a significant number of our B20 live, have deteriorated into high-rise slums. The system in place governing the maintenance of flats is the root cause of this problem.
According to existing law, flat owners are required to set up a management corporation to handle maintenance issues. The families from the middle 40% of households are able to afford a monthly fee of RM100 or RM200 enabling their management corporation to engage the services of a building manager to handle their apartments.
But low-cost flat residents are unable to pay high monthly management fees. Even the low fees charged (RM30-RM60) are difficult to collect as many residents don’t have the money to pay. Therefore the management corporation is not in a position to procure the services of a building manager, but have to manage on their own. Invariably the management corporation fails as it is unable to collect sufficient funds to carry out maintenance of the premises and the committee becomes demotivated by the various conflicts that arise from their efforts to maintain the low- cost flats.
The way out is to make the local council take responsibility for the collection of management fees and for the maintenance of low-cost flats under its jurisdiction. The “township” system that is practised in Singapore has several features that can be adopted to handle the maintenance of our flats.
The existing law has created the position of “controller of buildings” within local government. This person has sufficient authority to intervene in the management of any flats which are not being maintained satisfactorily and has the power to delegate the responsibility of maintenance of these flats to the respective municipal or city councils.
The government should set up a fund to finance urgent repair works in these low-cost flats and to finance day care centres for children so that more of the mothers can go out to work and supplement the family income. Efforts could also be made to start tuition classes and activities for youth so as to create a more positive atmosphere for the youths living in these flats.
The government must use the Land Acquisition Act to acquire 20 acres of land in every large estate to establish PPR housing schemes (rent-to-buy) for estate workers whose families have laboured in the plantation sector industry for more than 20 years. Former workers who have moved out of the estate upon retirement but do not yet own a home can also be offered an opportunity in these schemes. Such schemes must be located as close as possible to main roads and the towns.
We apply this term to mothers who head a family with at least one child under 18. Women whose husbands are severely ill and are unable to earn a living can also be included in this group.
According to government statistics, there are 250,000 single mothers in our country and 60% of them have a monthly household income of less than RM2,000.
A few houses in every PPR scheme developed by the government must be set aside to be rented out to low-income single mothers. When several families headed by single mothers are placed in the same housing scheme, aid such as childcare centres and self support groups for the mothers can be implemented.
B. Poverty of rural communities
Lack of employment opportunities
Under-employment is a big problem in rural areas. Many people here work part-time only – a rubber tapper only needs to tap every other day, and those doing odd jobs work only two or three days a week. Hence, members of this community need more employment opportunities but they are unable to find work for two main reasons:
- The presence of millions of undocumented foreign workers in this country who are willing to work for extremely low wages. There are about three million undocumented foreign workers (whom the government terms as Pendatang Asing Tanpa Izin or Pati) at this point. This is a huge number considering that there are only 6.5 million active Employees Provident Fund (EPF) members at this point. Contract work in smallholder farms, poultry farms, fish farms etc. are swept up by these undocumented workers who are forced accept any terms set by the bosses.
- The tendency of employers running factories and large companies to employ foreign workers (legal) rather than local workers. The reason is that foreign workers are willing to work 12-hour shifts daily and will not apply for leave due to marriage, deaths in the family or illness faced by their children. Foreign workers are also cheaper to employ because employers are not subject to the contribution of 13% of salaries to the EPF. Foreign workers are also easier to control: if they object to the terms of their service, employers only have to identify two leaders among them, cancel their work permits and send them back to their respective countries. Problem solved. The rest will be intimidated into silence! Factories are required to advertise for local workers before they are allowed to bring foreign workers in. So employers dutifully put up banners regarding vacancies, but send away the locals who turn up to register. Then they report to the Immigration Department that locals are not interested to work for them.
Steps to manage the Pati problem:
- The recruitment of foreign workers must be implemented through a government-to-government mechanism without the intervention of commercial interests. At the moment, the labour recruitment agency earns RM10,000-RM14,000 for every foreign worker brought into the country.
- The right to redress for work place issues must be reinforced. If a worker has issues with the employer and is subsequently terminated because of this, the worker should be given a work permit to seek employment in another company if he or she has filed a case against the previous employer. The Legal Aid Foundation (Yayasan Bantuan Guaman) should be mandated (with payments from the government from the levies collected from foreign workers) to represent foreign workers in the labour courts.
- Employers who employ undocumented foreign workers should be liable to imprisonment. This law does exist now but is rarely applied on employers. (But sentencing errant employers to be whipped, which is also provided for in the law, is too harsh and should not be applied. A prison sentence of one or two months should suffice.)
- An amnesty programme for “illegal” foreign workers should be implemented. This programme:
- must be implemented by the government and not outsourced to a company because there are many irregularities when this responsibility is delegated to companies looking to profit.
- must be realistic. Just register the foreign workers with their current employers without restrictions based on economic sectors. The aim of the amnesty proggramme is to register all foreign workers so that the Pati issue can be overcome.
- must not impose fines or levy payments that are too high.
Steps to create job opportunities in factories:
- The Labour Office should take a proactive role in registering villagers who are interested in working in factories. A mobile registration unit should visit the pasar malams (night markets) to register villagers.
- Factories looking to employ new foreign workers must be required to advertising the vacancies on banners to inform locals. Only when there is no response from locals to their vacancy advertisement, can the factory apply to the Immigration Department to import foreign labour. Two additional conditions must apply:
- A factory must inform the nearest Labour Office of its recruitment drive to allow the Labour Office to disseminate information of the job vacancies to locals looking for factory-related employment. The Labour Office should monitor if locals apply for the jobs and the response from the factories.
- Confirmation from the Labour Office – that vacancies advertised did not receive local response – should be made compulsory requirement for any factory applying to the Immigration Department for permission to import new foreign labour.
- Public transport connecting village settlements to factories should be made available to enable villagers to travel to work with ease.
- Put an end to forced overtime work. Local workers who want to work for eight hours a day should be allowed to do so.
Low commodity prices
Two main factors cause this phenomenon:
- Supply exceeding demand – There are hundreds of thousands of smallholder farmers in Asia, Africa and Latin America which struggle to produce agricultural commodity because they are poor and they need bigger revenues.
- The oligopoly in the agriculture industry makes it possible for extremely wealthy buyers to control the value of commodity stocks and suppress it to a low level. These two factors arise from an international economic structure which makes it hard for a country like Malaysia to campaign for better pricing for rubber and palm oil in the international market.
Ways to tackle this problem:
- Paddy/rubber/oil palm production incentives should be continued to augment the income of smallholder farmers. The incentives for paddy should be maintained over a long period as rice is crucial to national food security. We need to try and improve our level of self sufficiency in rice production from our current 70% to 100%.
- But we need to try and diversify away from rubber and oil palm cultivation. Currently, Malaysia’s self sufficiency in the following food items is more or less beef 20%, mutton 15%, dairy 15% and vegetables 70%.
- We also need more freshwater fish and livestock feed. The agriculture ministry has to find a way to improve our farmers’ capacity to produce food which our people need.
- Product-dumping during the fruit seasons needs to be addressed effectively. Among the steps that can be taken :
- Federal Agricultural Marketing Authority (Fama) has to formulate ways to can local fruits, dry them, juice them and freeze them etc so they can be kept for off-season sales or even for export purposes.
- Fama has to spearhead the “forward contract” method under which it can enter into an agreement with fruit orchard farmers to buy a certain amount of their harvest at an agreed price. This will give smallholders a guaranteed sale of a portion of their produce.
C. Stateless children
Three categories of children are stateless:
- Children whose mothers are not Malaysian citizens and who, at the time of the birth of the child, had not yet registered their marriage to the child’s father. Thousands of children areborn to women who are foreign workers (from Indonesia, Thailand, Myanmar, Vietnam and India) “married” to Malaysian men.
- Children born to Malaysian-born mothers whose citizenship status is uncertain.
- Abandoned children who are raised in orphanages. Hundreds of children were abandoned by their mothers at a very young age and raised in orphanage hostels. The orphanage usually registers the child at the National Registration Department and a birth certificate is issued. But because the name of the mother and her citizenship isn’t known, the child’s status will be recorded as “non-citizen”.
Children from the three categories above are from the poorest strata of society. Failure to get citizenship further marginalises these children because they will find it difficult to enrol in school or qualify for free medical treatment at hospitals.
When they turn 21, they will find it difficult to gain employment because without an identity card, they cannot be registered with EPF or Socso. As such, they can only be hired as informal workers who are usually hired on a contract basis with very low pay. They will not be able to open a bank account or obtain a driving licence.
When they get married, they will not be able to register their marriage because the National Registration Department requires an identity card or passport for them to do so. So their children will be recorded as being born out of wedlock. (And if the mother is stateless, the children will also be stateless.) The transmission of poverty from generation to generation thus continues!
Source of the problem – Schedule Two, Part II, (1) (a) of the Federal Constitution states: “Every person born within the Federation after Malaysia Day is a citizen by operation of law if one of his/her parents was, at the time of his/her birth, a citizen of Malaysia.”
But then Section 17, Part III, Schedule Two of the Federal Constitution nullifies this provision for children in the first two categories above. It states that “references to a person’s parents, or one of his parents, are in relation to a person who is illegitimate, to be constructed as reference to his mother”.
So even if the father’s name appears on the birth certificate and both parents confirm they are parents of the child, the child is considered “illegitimate”. Thus the child’s citizenship status is only based on the citizenship status of his or her mother (who, in the first two categories above is a foreigner).
A resolution to the problems faced by children in the three categories described above does not require any amendment to the Federal Constitution.
Clause 15(A) of the Constitution reads: “The Federal Government may, in such special circumstances as it thinks fit, cause any person under the age of 21 years to be registered as a citizen.” This gives sufficient authority to the home minister to solve the citizenship issue faced by children described in the three categories above.
Clause 15 (A) can be used to draft a new standard operating procedure to enable the approval of citizenship of all children born in Malaysia whose fathers are Malaysians, if their father can be identified in the birth certificate record or through a DNA test. Such applications can be approved at the National Registration Department level without needing a special decision by the home minister because that only delays the process.
The department also needs a new standard procedure to approve Malaysian citizenship applications for all orphans raised in orphanages from a very young age, even though their parents cannot be identified. The cabinet can use powers conferred under Clause 15 (A) or Clause 19(2) of the Constitution to draft such as procedure for the department. Again the authority to do so should be devolved to the department such that it becomes an administrative decision.
D. Old-age pensions
We can assume that the top 20% of the population will have saved sufficient funds to care for themselves till the end of their lives. We also know that close to 15% of families in Malaysia are secure with government pensions or benefits from Socso.
This means 65% of Malaysians above 70 do not have savings to help them through their old age. The situation is worse for those in bottom 40% because their children too will be facing financial constraints and living in compact terrace houses or flats. It is even more difficult for families in the bottom 40% to care for their elderly parents.
Our recommendation: Implement pensions for all senior citizens 70 and above if they are not recipients of any other pensions. If each person in this category is paid a monthly pension of RM300, it will cost the government: one million people x RM300 x 12 months = RM3.6bn per year. It will not be enough for that person to live independently, but it will be a great help to them.
These recommendations are some of the ways we can immediately start addressing the economic plight of the bottom 20% in our midst. And we should!
A new more harmonious Malaysia cannot be built if economic deprivation makes people in the lowest rungs of society apprehensive and thus more susceptible to racial politicking and scaremongering that some parties are very good at.
The very survival of the PH government and the reform process that it is trying to implement beyond the next general election will hinge on how successfully the economic anxieties of the bottom 40% are allayed over the next four years.
Everyone who wants to see a better Malaysia should keep reminding the PH leaders of this reality.