Fresh strategies needed to help the new poor
PETALING JAYA: An expert on poverty has called for long-term strategies to help what he calls the “new poor” who have emerged from the devastation caused by the Covid-19 pandemic.
James Raj, a poverty researcher and member of the All Party Parliamentary Group Malaysia on sustainable development goals, said the pandemic had caused many in the B40 income group to slide deeper into poverty and some in the M40 group to move down a tier.
“These people can’t be allowed to stay down,” he told FMT. “They need to be able to rebuild their lives.”
He said they needed to go through reskilling programmes and to be given employment so that they could bounce back.
This approach to poverty alleviation would also help others in poor communities change their circumstances more effectively than with cash aid, he added.
He spoke of cash aid and loan moratoriums as “troubleshooting measures” that would not address long-term problems and would not lift people to higher socio-economic tiers.
He added: “We are addressing present needs, but not actually empowering them to uplift themselves, which is admittedly more difficult.
“People can become reliant on aid and won’t be able to escape the cycle of poverty. If a husband and wife are in poverty and you give them money and food but don’t improve their knowledge and training, their children will end up in poverty too.”
He suggested the development of social enterprises and cooperatives that would encourage entrepreneurship and could support small businesses started by the poor.
“You can start communal kitchens to allow people to make food to sell or you can provide a platform to help them market their handicraft,” he said. “These things encourage people to learn new skills and restore their dignity because they are able to earn.”
Carmelo Ferlito, the CEO of the Center for Market Education, said such a strategy had proven effective in a number of countries.
He said social assistance should always be designed in a framework with an end point at which recipients would no longer need aid.
“In India, they have looked at low-income entrepreneurs who developed, commercialised and scaled their own businesses,” he said. “They found these people were able to both build local networks and use resources in innovative ways.”
He also spoke of clean-energy companies engaging with poor communities in Bangladesh, India and Cambodia and discovering that people were able to effectively integrate their products into existing ecosystems and develop payment systems consistent with the needs of their communities.
“This created micro-entrepreneurship activity, generated employment for locals and improved standards of living.”
Beyond that, he added, the government should partner with the private sector to offer professional training to prepare the new poor for re-entry into the work force. - FMT
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