BR1M: Continuous refinements, exit mechanism are key

KUALA LUMPUR: For 1Malaysia People’s Aid (BR1M) to function efficiently, continuous refinements are necessary, said Bank Negara Malaysia (BNM).
At the entry level, the cash transfers should be prioritised for the truly underserved and vulnerable groups and equally important is for BR1M beneficiaries to graduate out of the lower-income bracket over time.
“The sustainability of BR1M would depend on mobilising the lower income groups to break the vicious inter-generational poverty cycle and moving up the income ladder.
“To do so, BR1M could be enhanced by ensuring there is an exit mechanism, by linking it to promotional programmes to enhance human capital and productivity,” BNM said in a written reply to Bernama on whether BR1M was sustainable and if there should be a deadline.
In the long term, any cash assistance programmes should only form one part of a more comprehensive national social security system, it said.
“Critically, the social security system must not engender an over-reliance on state welfare or stigmatise the poor, but rather empower and build the capacity of households,” the central bank pointed out.
Broader fiscal, structural and social policies, including on the labour market and education, are key in shaping the adequate level and coverage of the social protection framework, it said.
BNM said a holistic framework for national social security system would rest on three key pillars: protection, prevention and promotion.