RM64 billion allocation for subsidies, aids and incentives in the 2023 budget is meant to support the vulnerable groups, particularly those who live in poverty.
Key to ensure effective delivery of these programmes is to adopt an evidence-based approach where outcomes are clearly identified at the onset and measured accordingly, before and after any programme or intervention is implemented.
A gold standard for evidence-based approach is randomised evaluation where the target group is divided into control and treatment groups.
Control group receives no treatment or status quo treatment whereas the treatment group receives a different form of treatment, for example, behavioral intervention.
Outcomes for each group are measured before and after an intervention is introduced, and compared. This way, the effectiveness of a programme is measured and an intervention that yields a better outcome can be identified.
Evidence-based approach means interventions have to be varied, customized according to different segments of the target population of diverse needs and behaviors. In other words, no one size fits all.
Subsidies, aids and incentives take its toll on the nations’ finances, given the tight fiscal space Malaysia is in – the nations’ debt stands at RM1.2 trillion debt in 2023. Expanding the tax base and introducing taxes such as inheritance and windfall taxes may help remedy the situation.
As a transition to a high-value add economy follows a complex path, philanthropy offers a fresh look at addressing low income, poverty and income inequality.
Philanthropy is natural, given humans’ propensity for altruism. It is humane and promotes a caring society, which is very much part of Malaysia’s shared values.
For philanthropy to be impactful at national scale, it has to be institutionalized by the government with appropriate governance in place.
In 2022, IKRAM embarked on an exploratory study on philanthropy as a driver for a humane economy. IKRAM calls for the government as well as stakeholders in the private sector and civil society to join hands on this exciting journey.
Mohammad Abdul Hamid
Head of Economic Prosperity Cluster
Pertubuhan IKRAM Malaysia
