Data-driven approach is essential in Malaysia’s public policy making

By Amanda Yeo

Although the federal government has a plan to amend the Statistics Act 1965 (Revised 1989) to empower the Department of Statistics Malaysia (DOSM) in formulating short- and long-term policies, there is a lack of engagement with industrial players and vulnerable groups – letting their voices to be heard in Malaysia’s public policies.

The existing data are also scattered everywhere across federal and state government agencies as well as government-linked corporations. As the government chooses not to make the raw data such as demographic characteristics, income and expenses of every household and/or individual in the Household Income and Expenditure Survey available, Malaysia is not able to design public policies that represent national interests.

As some of the latest data could be two to three years old, this enhances the difficulties among policymakers, researchers, journalists and consulting firms in addressing issues, developing solutions and evaluating the effectiveness of policies.

According to the Statistics Act 1965 (Revised 1989), the function of the DOSM shall be to collect and interpret statistics for the purpose of furnishing information required in the formation or carrying out of Government policy in any field or otherwise required for Government purposes or for meeting the needs of trade, commerce, industry or agriculture (including forestry, fishing and hunting).

Although the levels of disaggregation have improved in recent years, the raw data remains inaccessible to the public. The lack of data transparency also fuels confusion among the politicians, ministers and government officials.

For instance, Entrepreneur Development and Cooperatives Minister Datuk Seri Dr Wan Junaidi Tuanku Jaafar in his clarification on Nov 13 said the media got it wrong when they reported more than 30,000 small- and medium-sized enterprises (SMEs) have ceased operations from March till September based on his parliamentary written reply on Nov 9. Instead, the figures referred to all registered companies under the Companies Commission of Malaysia (SSM), and not just the SMEs.

But this still does not solve the problem. We now know based on the SSM statistics, the total number of companies and businesses that had closed their operations during the first phase of the Movement Control Order (MCO) from March 18 to June 9 was 9,675. Another 22,794 had closed during the recovery MCO (RMCO) phase from June 10 to September – a total of 32,469 closures of businesses of all kinds registered with the SSM.

But how many SMEs were there among these closures is still not answered. For that matter, how many Micro SMEs (MSMEs) or MNCs or other types of businesses among these all-business-types closures remain a conjecture.

To compound the problem further, Human Resources Minister Datuk Seri M. Saravanan said on Nov 18, a total of 2,713 companies with SME status have shuttered between March and October this year.

So, putting two and two together, does this mean out of the 32,469 all-business type of closures from 18 March to September 10 stated above, there were only 2,713 SMEs (8.4%)? Hard to believe isn’t it? Moreover, the time frame didn’t match. Whereas the figure from Wan Junaidi is from March 18 to September, Saravanan’s figure is between March and October.   

All this means, it is relatively challenging for the policymakers to craft the policies that can truly assist MSMEs to manage their cash flow and digitalise their businesses during this health crisis.

In addition, the national poverty line income (PLI) was only revised after 14 years – from RM980 in 2005 to RM2,208 in 2019. The recent revision of PLI in the middle of July may not reflect the true cost of living and might exclude the most vulnerable groups in Malaysia. Many middle 40% (M40) group might fall into Bottom 40% (B40) category when they face income loss or salary reduction since the imposition of the MCO in March, according to Umno’s MPs Datuk Seri Hasan Arifin and Datuk Mohamad Alamin.

According to the recent findings from a think tank, The Centre, 59% of gig workers, also known as online platform workers do not have emergency savings and an equally 59% do not have retirement savings. In terms of insurance, 75% of gig workers do not have unemployment insurance, 57% do not have personal healthcare insurance and 37% do not have work-related injury or accident insurance. What is even worse is close to one-fifth (22%) of 400 e-hailing and delivery drivers do not have any form of social safety net.

As the government does not have a complete database on affected vulnerable groups, one-off assistances such as Bantuan Prihatin Rakyat (BPR) as well as PenjanaGig, the gig economy platforms under Penjana are ineffective measures to address the issue of income losses among these communities.

The outdated tourism statistics may also hinder the growth of the tourism industry in Malaysia. The current tourism data – the Tourism Satellite Account 2019 was only released in September this year by the DOSM after the collection and reporting period.

According to the Malaysian Association of Hotels’ CEO Yap Lip Seng, data such as tourist arrival, expenditure, average stay, per capita expenditure and per diem expenditure are without analysis and/or benchmarked against competing markets (i.e. Thailand, Indonesia and Singapore), or even mapped with marketing initiatives.

Thus, there is little to influence decision making and strategic planning as well as implementation among the tourism and hotel operators who are struggling to manage their cash flow due to low number of tourist arrival and occupancy rate arising from this health crisis.

Meanwhile, as there is no latest statistics on exactly which areas do not have Internet access, the connectivity gap persists between sparsely populated rural areas and densely populated urban areas.

This can be seen in the rural areas of Sabah where the villagers had to pull up mineral bottles containing mobile phones with their “hot spot” function switched on – obtaining minimal cellular signals via at least 10m high of bamboo poles. Some students even had to climb up the tree to access online learning materials or take online examinations during school closure period.

Moreover, even though Malaysia is still facing a health crisis, the data from Health Ministry (MOH) remain outdated. When Sabah becomes the epicentre of the Covid-19 third wave, the low official ratio of doctors to the population (one doctor for every 856 people as in 2018) in Sabah and a lack of medical equipment enhanced the difficulties of frontliners to cope with the increasing number of the Covid-19 patients.

Although the MOH increased the total bed capacity and mobilised hundreds of healthcare personnel from other states to manage the escalating number of Covid-19 cases in Sabah, the poor health infrastructure problem that persists in Sabah for decades cannot be ignored by the government. As the saying goes, “Prevention is better than cure.”

To better address digitalisation, healthcare, welfare assistance and cash flow issues among the affected groups and individuals, the government must adopt data-driven approach – cooperating with relevant ministries, agencies and representatives from private sector for more inclusive data.

With current, updated, trustworthy, accurate, reliable and complete data, the industry players would be able to benchmark business performances based on their understanding of the current state of the industry and adopt the most appropriate business approaches to address the country’s issues.

Hopefully with the amendment of the Statistics Act 1965 (Revised 1989) as well as the formation of the National Statistics and Data Council that was approved by the Cabinet on Sept 9, the government could take a comprehensive approach in data collection and analysis – creating innovation opportunities across all ministries, agencies and businesses, for Malaysia to design people-centric public policies.

Amanda Yeo is Research Analyst at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

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