Enabling factors for better social protection for all

Inclusive growth and decent work are integral to a socially sustainable and socially just working environment that would further human well-being. Attempts towards protecting informal

workers against exploitation and inequity should therefore have a systemic view of institutional and structural enabling factors; efforts would be piecemeal and lack effectiveness otherwise. A comprehensive look at enabling factors would cover macro-economic and sectoral policies, labor policies and standards, infrastructural support, regulatory controls and institutional frameworks…

a diverse range of topics that would stretch beyond the scope and space of this paper. This paper will therefore only look at some main enabling factors, without claiming the list to be exhaustive.

A vision beyond GDP

The New Economic Model (2010) is a key document by the Malaysian government outlining a framework that guides the nation’s transformation into an advanced nation by 2020.

The main goals outlined are high income, inclusiveness and sustainability, which embodies the three pillars of sustainable development: economic, social and environmental sustainability.

However, five years after the launch of the New Economic Model, policy attention is disproportionately focused on high income attainment. A national vision that has a key focus on GDP growth runs the risk of overemphasizing the quantity of growth and neglecting the quality of growth. The indicator of GDP per capita does not include the narrative of inclusiveness and equity by default; the economic benefits from growth can be disproportionately concentrated on a select few, yet the income of the economy as a whole does appear to have risen.

The need to increase GDP manifests in policy decisions that put profit before people, such as the government’s backtracking on the unemployment insurance because of heavy pressure from the industry, and also the government’s soft recognition of contractors of labor. The informal economy exists because of the market’s failure or refusal to absorb labor costs, and the state’s failure to encourage and regulate formal employment. A shift in worldview to developmental indicators beyond GDP will remove a paradigmatic obstacle to businesses internalizing social costs, including costs for social protection, and increase the quality of work in general.

Better governance

A certain “trust deficit” is often mentioned in the context of the governance of the country and its institutions. This comes from a political system that is generally biased towards the incumbent; legislative and judiciary powers are also heavily influenced by the executive, and mechanisms for checks and balances are not independent from the ruling government. Distrust towards the state is evident through the increasing number of rallygoers for the Bersih demonstrations (held in 2007, 2011, 2012 and 2015) where hundreds of thousands of Malaysians took to the streets to demand for free and fair elections. A survey (N=1008) conducted by the independent opinion research firm Merdeka Centre in early 2015 indicates that only 39% of those surveyed believe that the country is going towards a right direction; versus 47% who believe that the country is going towards a wrong direction (13% of the respondents were unsure and 1%

refused to answer the question). Figure 4 shows the longitudinal opinion trends from 2008 to 2015 amidst the context of key issues of the time.

Figure 4. Public opinion of the country’s direction, from 2008-2015 (Source: Merdeka Centre, 2015)

Controversies regarding corruption are rife, more so in the recent years on allegations regarding the 1Malaysia Development Bhd (1MDB) that is under investigations in at least five different countries. Related allegations of misappropriation of funds of up to RM2.6 billion (or USD700 million) connected to the Prime Minister do not help in assuaging the people’s distrust.

The 1MDB case is relevant to discussions on social security especially when the EPF and Retirement Fund Inc. (KWAP) have invested over RM3 billion in 1MDB and its subsidiaries (The Star Online, 19 May 2015). Contributions on social security are affected by trust towards the state, especially when the contributions are voluntary by the informal sector. Leakage of public funds also means less funding for state-sponsored social protections and maintenance of the commons.

Education and human capital development

It was recognized in the National Education Blueprint (2013-2025) that Malaysia has performed poorly in international educational benchmarks such as TIMSS and PISA in recent years, and the performance of its students does not reflect the amount of national budget spent on education. Command of the English language at a national level has also deteriorated over the years, affecting the competitiveness of Malaysians in the job market, locally and internationally.

Stronger academic capabilities bring forth better chances of finding quality jobs in the formal economy, as many within the informal economy in Malaysia have secondary school level education and below. However, possibly a more important point is that those who are better educated have a better grasp of worker rights and the importance of social security, and are in a better position to negotiate for fair treatment and decent work. The people’s empowerment that comes with knowledgeable citizens raises the bar for social security standards within the economy.

Civil freedoms and human rights

Civil freedoms is an enabling factor to strengthen social security provision because they allow civil society to act as watchdogs against worker exploitation and violations of human rights in general. The Human Rights Watch World Report 2015 reports a fairly restrictive space on civil freedoms of expression, association and assembly in Malaysia. Numerous laws have a chilling effect on free speech, such as Sedition Act 1948 which criminalizes the discussion of politically sensitive issues, and the Printing Press and Publications Act 1984 which enables the government to seize or revoke a printing press or publication license at wide discretion. Freedom of association and assembly are similarly limited. Organizations with more than seven members are required to register with the Registrar of Societies, which has absolute discretion on declaring any organization illegal; and while street protests have become more and more common with the Peaceful Assembly Act (2012), there have been cases of police assaults against protesters.

Restrictions on freedom of assembly, for instance on trade unions, have been criticized to have favored corporate and governmental interests to the detriment of workers.

In general, Malaysia does not have a strong record of protecting human rights. Within the same report of Human Rights Watch, it is noted that there is a pattern of police impunity and lack of accountability, leading to cases of police abuse and suspicious deaths in custody. There is no independent body to oversee these cases that has sufficient teeth to investigate and sanction abuses.

The Internal Security Act and the Emergency (Public Order and Prevention of Crime) Ordinance allow for detention without trial. These ensure that status quo within the system is maintained, and any political instability, even for championing human rights causes, will be quickly silenced.

Malaysia’s laws also do not recognize asylum seekers or refugees, and these populations do not have legal permission to work, hence forcing them underground.