The reason why Sara stands out

 

Malaysia’s Sara demonstrates that smart welfare can be both compassionate and efficient. NSTP FILE PIC

MALAYSIA's cash grant programme Sumbangan Asas Rahmah (Sara) is shaping up to be one of the most effective targeted cost-of-living interventions globally — combining high uptake, strong accountability and real-world impact.

Governments around the world respond to economic shocks of the needy in one of two ways: direct cash transfers such as those of Malaysia's Sara or voucher schemes.

The most widely used government tool happens to be cash transfer programmes, according to an article published in an Oxford University blog by Dr Kate Orkin on May 12, 2020.

Admittedly, in the past governments were concerned that cash transfers would increase dependency on the state or would not be used well, a concern that shouldn't be dismissed quickly.

The latter fear led to either food aid or food subsidy schemes being popular. Over time, governments began to realise that money was the most efficient and effective way to distribute aid to people who needed it most.

The World Bank lends support to Orkin's view by its findings on how governments around the world responded to Covid-19 lockdowns. Unsurprisingly, the question on how people use cash transfers is said to be the most studied in development economics.

Although Sara isn't the only social programme that aids those who need it most — 22 million in the estimate of Putrajaya — it is arguably the one which is beginning to be noticed globally. But first a quick look at welfare programmes around the world.

Let's begin with the United States, the world's richest nation. There, direct cash transfers get a little tricky to assess with some coming with conditions attached while yet others are either universal or targeted. They are of large scale, but struggle with misuse and access issues.

In the United Kingdom, cash grants offer flexibility but lack controls, so funds may not be used to buy essentials.

Our neighbour to the south, Singapore, dishes out very efficient digital vouchers, but they are less targeted towards essential-only spending.

Food aid helps millions in populous Indonesia, but leakages and logistical inefficiencies persist.

Why does Sara stand out? We offer a few reasons why this is so. It has a near-universal usage — around 98 per cent — indicating aid is actually reaching and being used by intended recipients.

Targeted spending controls ensure funds go towards essential food and daily necessities, not non-critical items.

MyKad-based digital delivery reduces fraud, improves accuracy and minimises administrative waste. By the end of the year, there would be 10,000 retail outlets to ensure the rural and lower-income communities have easy access.

At a time when governments worldwide struggle to design cost-of-living support that is effective, targeted and financially sustainable, Malaysia's Sara demonstrates that smart welfare can be both compassionate and efficient.

We wouldn't be wrong to say that Sara is emerging as a regional and global benchmark for how governments can protect households from rising living costs without waste, abuse or runaway subsidies. - NST