Tuesday, January 20, 2009

The Missing Social Safety Net

Picked this up from Pure Shiite (http://satdthinks.blogspot.com/)

I think he has a powerful and salient point. And it's another indictment of our current ruling government's atrocious policies and mismanagement of our nation. Below his piece is the comment I left on his blog.


Unemployment Insurance, the missing social safety net

1,000,000 people could lose their job THIS YEAR

How many is expected to lose their job next year?

How many fresh graduates are entering the job market this year, and the next, and the next? What in the world are they studying now? Would that little piece of paper bring any value to them? Or should they start learning new skills to prepare them for survival in the years to come?

What sector runs the highest risk of unemployment in Malaysia? What are the drivers of unemployment in these sectors?

All these questions bring about some memories in 1999, I was in Europe designing a product for one the largest global bank operating there, they wanted to hedge the risk of potential defaults by borrowers should they become unemployed...we studied detail unemployment data of various region in Europe and came up with an insurance product tied to the loan exposure. In the event that the borrower is retrenched then the insurance policy takes over to cover his installments for 6 or 12 months depending of policy terms and condition.

In 2000, Malaysia claims that we do not need Unemployment Insurance because we have "full employment" - Ni betul2 Luncai mentality....social infrastructure requires proper planning pakcik, it about preparing for a potential risk and providing the right safety net for your rakyat.

What if, after 1997-98 crisis, we had put in another component of Social Infrastructure whereby the Employers Contribute to a Pooled Fund, with a small element of Employee contribution. And all insurance company can participate into this fund to offer protection to the workforce. Would we be better prepared to handle what is coming?

Risk if well managed can be a good thing, and risks requires redistribution to reduce its impact to the overall economy.....right now this risk is with the Man on the Street with No tools to Hedge against the incoming tide of bad news..........(i met someone during my KL trip last Dec, he was from KT, came to KL to work for a LCD factory, lost his job 2 months ago, cant go back to KT, now doing odd job in KL......and guess what....he's Malay! How many more are out there? )

It is the Malay who will first suffer should the economy contracts further you IDIOT..yes you the GOVERNMENT who champions affirmative action-stop bickering and start coming out with a Nationwide solution covering the whole demographics, and while you're at it don't forget the foreign workers as well, make sure they get their gaji if they get fired

Retraining assistance when someone is struggling to pay his bills, installments, children food does not mean much..........if we do not have such tools to help them on a day to day basis while they find work then expect rising social issues to deal with....

What do you think? Would you like to have one?



Some kind of social safety net has long been overdue in Malaysia. Pity the people who saw their purchasing power shrink by 30-40% over the last 10 years. Has our per capita income increased by any rate even close to matching our shrinking wallets? I think not!!

However, the disadvantaged citizens of Malaysia have very few places they can turn to for help in such crucial times as these. The Welfare Department hands out money (and not much of that, even!) but there is little by way of helping them back on their feet and get them up and running again.

I first brought up the issue of a social safety net in a cyberspace forum after the BN govt suddenly raised fuel prices prices to RM2.70. I was not against removal of subsidies, rather my point was that key sections of the economy should have been restructured first and a well-planned social safety net prepared before removing the subsidies, so as to minimise the shock to the system.

A BN apologist promptly jumped on me. His repeated assertion was that subsidies needed to be removed. I repeatedly AGREED with him, but emphasised that I was against the WAY it was done. So the usual personal attacks on my brain capacity, level of education, society status, etc ensued.

The other key issues afflicting our economy - zero-value artificial quotas, massive corruption, loss of confidence in our law-enforcement agencies and judiciary, frustration with govt agencies - were completely ignored in the debate. Instead, of prime importance to the BN apologist was running down my Economics credentials!

If the BN deems to "convince" the rakyat (through their cybertroopers) about the rightness of their short-sighted, hare-brained, knee-jerk policies in this way, what hope is there that the BN govt will listen to intelligent opinions of stakeholders and do the right thing? They are simply incapable of listening to voices of reason. And in the 10 months since March08, despite repeated assurances that the BN will start to listen to the people, they have proven the opposite time and again.

The BN is incapable of reforming itself. The greed factor is too strongly ingrained in its culture. It's the same kind of greed that drives companies to ignore the destruction of our planet's environment in pursuit of the almighty dollar. It's the same greed that destroyed Wall Street and is slowly but surely on the way to destroying the rest of the world markets. In our Malaysian context, this greed among the ruling political elite will destroy our country.

As a loyal citizen, I cannot allow our beloved country to continue on its path to destruction without doing anything. That's why I advocate government change. If a person is no longer fit to occupy the position he is in, and in fact is posing a danger to others, of course he must be removed!

There is no other way!

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