A Study of Poverty and Social Security in Malaysia

Abstract

This paper makes a diagnosis of poverty and social security system in Malaysia. The socioeconomic gap between Malays and non-Malays, between urban dwellers and rural residents, and between Peninsular Malaysia and Sabah or Sarawak remains enormous despite government's aggressive affirmative action policies since the ethnic riot in 1969 along with the rapid economic growth. Malaysia's social security system holds institutional safety measures mainly for old age and industrial accidents, but none for sickness and unemployment. In the country the people covered by the institutional scheme of social security are limited to employed workers. About half of the total employed workers are covered by the Employment Provident Fund or related pension schemes, and those covered by the SOCSO's social insurance scheme stays at two thirds of the total workers. The rest of the populations are still not protected by any social security measures. New social insurance schemes to cope with unemployment and sickness together with a consistent effort to expand the comprehensiveness of existent measures are required for further socioeconomic development.