World Bank Group

10/27/2021 | Press release | Distributed by Public on 10/26/2021 22:12

Malaysian households during COVID-19: Fading resilience, rising vulnerability

Economic recovery is now back in focus, against a backdrop of increased vaccination coverage and the reopening of economic sectors. While the global spread of COVID-19 was swift and far-reaching, its impact and recovery trajectory appears uneven, as a new World Bank survey reveals. In particular, Malaysian households, which braved the pandemic with resilience, now find themselves increasingly vulnerable.

To better understand the distribution of impacts and speed of recovery among Malaysians, the World Bank's COVID-19 High Frequency (HiFy) Household Monitoring Survey was conducted between May 18-June 16, 2021. This nationally representative survey involved 2,210 adult respondents across all states via phone interviews.

It is helpful to get behind the numbers to determine the extent to which the pandemic has affected the livelihoods and well-being of Malaysians. The survey findings showed that low-skilled and informal workers, and those with lower incomes were more likely to be exposed to employment and income shocks compared to others. Interestingly, by June 2021, more adults were employed than before the pandemic, with 58% of those surveyed being employed in June 2021, compared to 53% in March 2020. Nonetheless, this may not necessarily translate to quality jobs and stable incomes. Of those who worked pre-pandemic, one-third experienced work disruptions, while 27 percent who continued working suffered income reduction.

More adults were employed than before the pandemic, with 58% of those surveyed being employed in June 2021, compared to 53% in March 2020.

Households have adopted several strategies to cope with shocks, with many households reporting withdrawing personal savings and reliance on government assistance. However, lower-income households and households who experienced employment or income shocks were also more likely to reduce their food consumption. As a result, one in four households from low-income groups experienced food shortages between mid-April and mid-June 2021. Households living in East Malaysia also experienced greater food insecurity, about twice as much as households in other regions.

Over the span of 15 months, the government has introduced eight large relief measures -totaling over RM 850 billion-to alleviate the citizens' hardship and to boost economic recovery. As of mid-June 2021, nearly 60 percent of households have received government assistance, including much-needed cash transfers, loan moratoria, tax relief, and other key programs. Yet, a significant share of lower-income households had still not received any assistance, despite experiencing food insecurity or income shocks. This suggests there is room for improvement in the targeting and delivery of social assistance in Malaysia.

There is also a need to reduce learning losses. School closures since 2020 have upended the education system. Despite efforts to keep Malaysian children engaged with at-home learning, many have suffered setbacks related to poor connection and lack of devices. About 30 percent of children from low-income households lacked access to online classes or mobile learning applications during the pandemic, compounding any previous disadvantages and putting their lives on a more detrimental path.

Without a doubt, the survey reveals that COVID-19 has impacted unequally on the welfare of Malaysian households. The worst impacts are afflicting those who were already disadvantaged before the pandemic, pushing existing inequalities to the forefront, risking long-term negative economic and social impacts in the future. Given the rapidly evolving pandemic, policy makers continue to need near-real time information to inform policymaking processes by identifying gaps that may require scaling up or redirecting policy responses as the crisis unfolds. Such information is key to monitor and track the welfare of individuals and households during the pandemic and could significantly increase the effectiveness of the government's substantial relief and stimulus measures to protect those most in need, as well as the intended recovery from the crisis.

In this spirit, the World Bank will continue conducting further rounds of the HiFy survey within the next months to facilitate greater evidence-based decision-making for an inclusive and resilient recovery.