Brighter days ahead for many Malaysians, yet some are still left behind

Malaysians have responded with fortitude and flexibility as the COVID-19 crisis enters its second year. Progress on vaccination has been impressive, with 95 percent of Malaysian adults fully vaccinated by early November 2021. As we come to the end of April 2022, 70 percent had already received their third dose. While the virus remains a threat, the country is emerging from this public health emergency.

Similarly, the economy showed early signs of recovery at the end of 2021. Yet, there remains a concern that this improvement had not been shared equally. To explore this further, the World Bank conducted a second round of its High Frequency (HiFy) Phone Survey in October and November 2021. The survey reconnected with those who participated in the first round of the survey to monitor the well-being of individuals and households through time.

The findings show that employment had gradually improved as of late 2021, following the reopening of the economy and the relaxation of movement restrictions in August. Almost 80 percent of pre-pandemic workers (those who worked in February 2020) retained their employment.  However, one-third of them still worked with less income. Employment fluctuations had also reduced since June 2021, with fewer people having changed their employment status or switched jobs. 

The survey revealed that recovery had been slower among poor and vulnerable groups. Young workers, those with lower levels of education, and low-income earners were more likely to continue experiencing work stoppage and job switching. Although over half of households had regained their pre-pandemic income levels by November 2021, less educated workers, those running businesses and workers who were informally employed remained vulnerable to income losses. While women had continuously been more likely to stop working, men were more likely to have endured income losses and changed jobs. Uneven recovery was observed across regions as well. Households in Northern Peninsular and East Malaysia had experienced slower recovery from economic shocks as compared to those residing elsewhere. 

The government had continued to deploy measures to protect poor and vulnerable groups. Coverage of government assistance had increased substantially to nearly 80 percent of households by November 2021, compared to 67 percent by June 2021. Yet, although government support was pro-poor, a significant share of households who experienced shocks, including those with low incomes, remained excluded.

Such uneven and slower recovery among poor and vulnerable groups had led to financial and social consequences. Despite some improvements, they remained most vulnerable to food insecurity, apart from being significantly less capable of paying rent or housing loans. These households were also more likely to endure financial distress without much savings. Children from lower-income households had also faced more challenges. One in four children from these disadvantaged households could not participate in online learning as of late 2021 due to not having proper devices or connectivity at home. 

The two rounds of HiFy surveys show a promising yet unequal recovery from the crisis. More Malaysians will gain from the reopening of borders and strengthening of external trade, but some will remain excluded from the same benefits. The poor and vulnerable are also now less resilient to withstand future shocks, especially since existing inequalities have been exacerbated by the pandemic. 

A better understanding of the severity and dynamics of COVID-19 impacts on households will enable greater policy discourse on how to better support the poor and vulnerable for a more inclusive recovery.  As such, the HiFy in April/May 2022 will track changes in household welfare since the last round as the situation stabilizes further. The findings of the survey are expected to promote evidence-based policymaking which will help develop effective responses to the rapidly changing situation.