Economists sceptical about BR1M 2015 helps in alleviating poverty

Economists sceptical about BR1M’s help in alleviating poverty Economists are quite skeptical with the Bantuan Rakyat 1Malaysia (BR1M) aid. Even as the BR1M 2015 subsidy cuts continue to widen its popularity, economists warn that introduction of the BR1M is not a step steered towards the right direction.

The renowned economist for the UM Centre for Poverty and Development studies Fatimah Kari uttered that the BR1M cash handouts do not inspire incentives for people to climb out of poverty, nor does it provide a holistic and long lasting social protection programme. She said “I personally am skeptical about the BR1M 2015 aids and I believe the Government should provide an exit plan for BR1M, one which will provide comprehensive social programmes through which the poor can access jobs, education and public health.

Fatima asserted “BR1M is a short term approach which will in no way alleviate poverty in the country” She went on to say, “Subsidy cuts are helpful because they are reliefs targeted at the poor.” She said this at a recent press conference on the subject of the impact of subsidy reliefs on inequality.

The popular economist asserted that the Government should focus on market-driven initiatives rather than the BR1M handouts. “Although BR1M is given on the basis of income levels, better ways to ease poverty can be achieved through creation and access to employment.” According to Jamilah Mohamad, UM Equitable Society Research Cluster dean, alleviating poverty should be tied to work and income generation. She went on to state an example of the Grameen micro-credit level, where income flows through a social business model.

The Grameen micro-credit, which was started in 1976 by Muhammad Yunus, the founder Bangladesh’s Grameen Bank, is based on the concept of giving small but significant, unsecured loans to the needy. It is pioneered on the principle that loans are substantially better at alleviating poverty than cash handouts. Fatimah criticized the introduction of the BR1M cash handouts, which are now in the third installment.

However, the Prime Minister Najib Abdul Razak was quick to defend the BR1M policy, asserting that it targets the needy and will ease poverty Mahathir is expected to give an enlightening lecture about the BR1M aids and poverty later this month at the University of Malaya.