KUALA LUMPUR, Sept 26 – Ah Ming (nickname), a 54-year-old man who lives on his own in Pasir Pinji in Ipoh Timor, Perak, exercised all four special withdrawal facilities from his Employees Provident Fund (EPF), leaving him with less than RM5,000 in his retirement fund.
The middle-aged man, who is nearing retirement at the age of 60, lost his job as a tractor driver after his employer’s business shuttered during the Covid-19 pandemic, forcing him to dip into his pension for emergencies like fixing his house when a tree fell on it and to pay off a personal loan, as he didn’t save money when he used to work.
Ah Ming, who has no siblings and whose wife left him, went to his elected representative, Howard Lee Chuan How, for help.
“He just came crying and said, ‘I only have this amount of money left’. It was only RM3,000 to RM5,000. He said he’s got another bill that he’s holding off paying. What’s he going to do? I didn’t have an answer for him,” Lee, who is Pasir Pinji assemblyman, told CodeBlue in an interview in Kuala Lumpur last week.
In Malaysia, like many other Asian societies across the world, the elderly are traditionally looked after by their children at home. Malaysia’s public health care system doesn’t include social care. Aged or social care in the public sector is sporadic, considered by the government as simply “welfare” under the Women, Family and Community Development Ministry (KPWKM).
As people live longer – and not necessarily healthier – that could mean caring for multiple generations, including young children, parents, and grandparents, for working-age Malaysians. Some, like Ah Ming, may have no adult children or family members to look after them.
More than 20 per cent of the Malaysian population will be older than 65 by 2056, up from seven per cent in 2020, according to the World Bank.
Without systemic intervention, the impact of an ageing population is enormous – from a decline in productivity and economic growth, to heightened pressure on public spending programmes, such as health care and pensions.
Perak ‘Oldest’ State, Pasir Pinji Among Highest Old-Age Dependency Ratios In Malaysia
In Perak, a northern state with the oldest population in the country, the effects of an aged society are apparent.
Lee said he is seeing more homeless senior citizens now in his constituency after the pandemic, particularly in the New Villages nestled in the state capital of Ipoh that he described as “quintessential examples of urban decay”.
“It’s literally degenerating,” Lee, who is also a member of DAP’s national central executive committee, told CodeBlue.
“It’s urban decay, where you have very little public investment in terms of infrastructure, which gives it higher susceptibility to flooding. You’re seeing roads that are less likely to be repaved, you’re seeing less businesses because there are only old developments and old shops and old commercial areas that people are reluctant to invest in,” Lee said.
“If there is no public gentrification, there won’t be commercially led gentrification of commercial areas. Because there is no economic activity, no economic incentive, and decay — that urban decay really hinders local pride.”
Howard Lee Chuan How, State Assemblyman for Pasir Pinji
The 39-year-old’s constituency, Pasir Pinji, has one of the highest old-age dependency ratios and among the highest death rates in the country, according to 2020 census data by the Department of Statistics Malaysia.
The old-age dependency ratio is the ratio of elderly people aged 65 and older – an age when they are generally economically inactive – per 100 individuals of working age from 15 to 64.
The national old-age dependency ratio, or the old percentage of the working-age population, has been steadily increasing from 5.9 per cent in 1970 to 7.5 per cent in 2010, as Malaysia moves towards an ageing population. According to World Bank data, Malaysia’s old-age dependency ratio was estimated at 11 per cent in 2021, up one percentage point from 10 per cent in 2020.
In Perak, the old-age dependency ratio hit double-digits in the last two population censuses, at 13.2 per cent in 2020 – the highest in the country – and 11.7 per cent in 2010. In 1970, the ratio was 6.4 per cent.
In Ipoh Timor, the federal constituency which Pasir Pinji falls under, the old-age dependency ratio is 20.7 per cent.
About 17.1 per cent of Pasir Pinji’s 32,657-strong population are of old age, or nearly one of five aged 65 years or older.
Apart from fewer investments and a drop in younger workers, Malaysia’s ageing crisis is also driven by rising inflation and inadequate savings.
The Covid-19 pandemic resulted in the withdrawal of RM145 billion in EPF savings, with over 52 per cent of EPF’s 12.78 million members aged under 55 having savings of less than RM10,000. About 3.2 million members had savings of less than RM1,000.
EPF chief strategy officer Nurhisham Hussein recently told The Star that at least RM900,000 to RM1 million is needed for one’s retirement savings in Malaysia, the “bare minimum” after factoring inflation and medical bills.
“You’ve got the notion that people are going to be eating into their pension funds to pay for care. So people who don’t need care will probably spend less money. People who need care will spend money that they’ll otherwise spend on food, electricity, energy, but if they need care, those savings for retirement will dwindle much much sooner,” Lee said.
But there are opportunities in a greying population, and Lee is optimistic. He believes that the realities of an ageing nation, where an increased need for care is inevitable, could be turned into an economic asset rather than a burden.
“In order to turn it into an asset, initial public investment, large scale public investment for preparedness needs to be made by none other than the government. You can turn it positive – train people to be paid carers and kickstart a care economy,” Lee said.
How Malaysia Can Kickstart A Care Economy
The care economy refers to the sector of the economy that is responsible for the provision of care and services for a population. This includes child care, elder care, health care, and domestic services provided in paid and unpaid forms within formal and informal sectors.
Lee, a former International Union of Socialist Youth president, said Malaysia could look to Japan and Scandinavian countries, where individuals are paid “decently” to be carers, instead of expecting care to be delivered voluntarily for free.
“We need to turn it positive by instituting training, institutionalising training, and making care part and parcel of society, where people are paid professionally. But before you do that, you need to start training carers,” Lee said.
The International Labour Organization (ILO) estimates global employment in care jobs to grow from 206 million in 2015 to 358 million by 2030 on socio-demographic changes alone.
Lee said trained care workers could be the frontline of Malaysia’s care economy.
“And to have this frontline trained, there needs to be an educational and care infrastructure, care colleges, existing or new institutions, to train and to start instituting a kind of proper care in these residential care homes, homes of the elderly, public or private, and to start upping the game and start setting standards.”
The former Pakatan Harapan (PH) Youth chief clarified that the care economy he envisions is not just about providing geriatricians for the elderly, but all forms of care for people who cannot live independently, such as stroke survivors, or people who are bedbound, disabled, or incapacitated.
This can be measured through Lawton’s Instrumental Activities of Daily Living (IADL) scale. IADL are activities that allow an individual to live independently in a community, such as shopping, cooking, or managing finances.
Carer Allowances For Caregivers, Public Care Service For Frontliners, Care Infrastructure Requirements For Property Developments
Lee is also calling for strong state intervention in having carer allowances paid for by the government to people who are already providing care.
“If you are someone who has to take care of parents and you lose half your work, the government needs to provide a carer’s allowance to accommodate for loss of work,” he said.
“When you have one child and that child needs to be away to find a job somewhere else rather than where parents are, do we want to force society or the next generation into making that choice between working, being part of the productive economy and participating in economy, or stay at home and not be paid for caring for parents who need care?”
“No one should ever be put in that position where they have to make a choice between working and caring for their parents.”
Howard Lee Chuan How, State Assemblyman for Pasir Pinji
Secondly, Lee suggested creating public care services for frontline workers, not necessarily confined to civil servants.
“You have proven there is higher value of you being at work in society than staying at home taking care of parents, so you’ll then qualify for a public carer – whether it’s full-time, part-time, four days a week for three hours a day – you will qualify to receive that care for your parents or household,” he said.
It was revealed in Parliament earlier in July that a total of 2,144 elderly were abandoned at hospitals across the country from 2018 to June 2022. While some were reunited with their families, more than half (57 per cent) were alone with no family members.
Thirdly, at the infrastructure level, care should be legally incorporated into new property developments, Lee said.
“Why can’t we start thinking about, for each and every single new property development – landed or high-density or high-rise – to have a one-stop in-situ care centre? For those who are disabled or incapacitated and those who require aged care and creche or child care, why can’t there be a condition where this one-stop centre be part of every single new development? At least in terms of its hardware.
“I’m not even talking about human resources, but just on hardware. A building with 300 units, there needs to be a plot ratio for a care facility of how many beds or care capacity for 30 people with 100 per cent loss of IADL, and 70 per cent loss of IADL (another 30 people).”
RM10 Billion Allocation For Care Economy, New Health And Social Care Fund With 5% Payroll Contributions
Lee is proposing a RM10 billion allocation from the government – RM5 billion, RM3 billion, and RM2 billion – over a three-year fiscal period to kickstart a care economy, that is to increase the number of care facilities, care training facilities, and infrastructure for care.
This care infrastructure encompasses public care homes or public-private partnership for care provision, both in terms of mobile care assets and in-situ care facilities. The allocations, he said, can come from either the Human Resources Ministry or KPWKM.
“All these need to be invested in.”
The former national DAP Socialist Youth chief also proposed a social health insurance scheme to increase funding for both public health and social care in Malaysia, acknowledging that revenue from general taxation alone will not be sufficient to provide care for an entire society.
Lee said that although he welcomed Health Minister Khairy Jamaluddin’s call to double the public health care budget to comprise 5 per cent of the country’s gross domestic product (GDP), tying funding to the GDP would mean a smaller health care budget in a bad economy, whereas health care funding should be constant or counter-cyclical.
The Pasir Pinji rep mooted three to five per cent payroll deductions from employer and employee for a new health and social care fund, with equal contributions from the government.
“This is my personal thought, not Pakatan Harapan policy,” clarified Lee, who admitted that even if PH were to form the federal government after the 15th general election, it would be an “extremely tall order” to discuss social health insurance.
“But discuss we must. Otherwise, you’re never going to see real evolution, progressive evolution of the health service.”
Initial Care Economy Efforts In Perak, Mainstream Agedness Preparedness
Lee, who was formerly the Perak state executive councillor for youth, sports, and human development, said efforts were in place, prior to PH’s downfall in 2020, to develop a care economy in his state.
“We started to work with a Japanese company that provided public-private partnerships for local governments, or prefecture level, in two prefectures in Japan. We were looking at crossovers, for their technology and expertise to be brought here, to be modelled in Perak.
“There was even a plot of land discussed to establish a kind of care training centre – it was public-private partnership. The state government-linked company had a plot of land, a big chunk that was to be private health care.
“That would cross-subsidise a care training facility statewide in population centres like Ipoh and Taiping, where they could start training carers in these places that will partly go towards manning and be the human resource for this care city, and train care training providers as well.
“This plot of land was in Tanjung Malim – it would be a care tourism hotspot. You have people from Japan, coming here to spend winter months. Some of the money will go into the kitty, so it will subsidise some public care provision,” Lee explained.
Lee is proposing a National Care Economy and Ageing Community Preparedness Plan dubbed “Siaga Jaga”, which seeks to professionalise the care sector, build capacity and training to achieve an ideal caregiver support ratio, and promote tax support and incentives for employers to hire and train older persons, among others.
“We need to mainstream agedness preparedness.”
