Malaysia as a Welfare State

9 June 2014


From my understanding, to apply to Malaysia fiscal policy, Malaysia is indeed practicing is welfare capitalism state. Malaysia have been subsidizing the need of the people on the basis of welfare example, in sugar, petrol, rice and other. The motions were strengthened by the Prime Minister , by mentioning that “Barisan Nasional have long applied the concept of the welfare state. Why Pas just think about it now?”[i]. The issues arose in the time where PAS are shifting their mission of forming an Islamic state to form a welfare state. However the statement was denied by Najib itself that Malaysia is going to implement welfare state policy because according to him, Malaysia will be into economic disaster. However, by ignoring the political flip flopping, I strongly believe that Malaysia is already in the phase of transition of welfare reform.
Currently, the government was subsidizing and controlling 20 crucial items on market in ensuring the price is affordable to the people such as sugar, flour, petrol Ron 97, cooking gas, cooking oil and other. Government also subsidise 97 percent of operating health care service in the country.

Welfare of Malaysia Education
According to UNDP 92.5 % of Malaysian are educated citizen.  With only 29 million of people Malaysia share 0.56% of total GDP  of the world by comparison that Indonesia with 244.2 million people only share 1.43% of world total GDP.   By ratio human capital in Malaysia are 3.17 times more productive than Indonesia. It indicates that our human capitals are efficient and outstanding. All of these facts signify that Malaysia has a strong economic foundation and ready for free trade gradually for the years to come. Currently, the education from primary school to secondary is free. In fact, the current allocation of government towards education is 21% of the GDP. The amount was approximately RM 38. 7 billion, which is among the highest in national budget 2012. Furthermore  RM 12. 7 billion of that were allocated for Minister of higher education. The allocations were planning to transform Malaysia education. Furthermore, one of the National Key Result Area (NKRA) of Malaysia is education improvement.   However, in university level, half of the fees are supported by government, the other half were paid by the student or through education loan PTPTN with 1% interest. However, for those who get a first class degree, they were exempted from paying the fees. Some of the welfare benefit enjoyed by Malaysian people in term of education is:

 1.         A free text book for all school students which involve 5.7 million students
2.         Allocation air on student uniform school for curricular activities for family income below RM 1,000 per month.
3.         Each year they will be allocated for scholarship, namely Biasiswa Kecil Persekutuan, Biasiswa Kelas Persedian Universiti & Skim Biasiswa sukan.
4.         Abolition of fees for primary and secondary school.
5.         No fees for taking the examination of PMR, SPM, SPM and STPM.
6.         The amount of scholarship for JPA were increased in 2008 from 5,000 a year to 10,000 a year.
7.         Addition food Program were enlarged. (Program Rancangan Makanan Tambahan)[ii]
PTPTN issues as a Class Struggle.
Before 1997, the tertiary education was supported by the government in term of scholarship. PTPTN had been introduced for the first time in 1998/1998 by Dato Najib Tun Razak Minister of Education during that moment, were intent to reduce the burden of the government to support in term of scholarship for the student admitted to university. At the beginning of the introduction, almost 13,000 students benefited from the PTPN with interest of 4% and were required to pay back within 10 to 15 years. Since the PTPTN were introduce, dozens of private higher institution were established and open up opportunity for those who were not fortunate enough or prefer not to study in the public university.
Only recently those students were protesting on the issues of PTPTN loan. In 14 April 2012  hundred of student began to march from Masjid Jamek , LRT to Dataran Merdeka. According to their anti-PTPTN protest, the abolishes of PTPTN will and everyone would have the right to access free education. The group was supported by opposition party, particularly PKR because during the protest , vice President Nurul Izzah and Tian Chua also gave a short speech. While the opposition leaders claim that the country need RM 25 billion to wipe out the PTPTN debt. However, the government denies that the real cost of eliminating the debt was RM 43.6 billion. In my opinion, the reason why the protest was not largely supported by the student is because the reason is not strong enough. The government never “took back” the gift so the spinning plate is stable. Furthermore, the interest was at 4 % were reduced by 1 %. It is not impossible in the future that the interest will be abolished.


The figure also suggests that the demand for PTPTN is increasing each year. It exemplifies the need of the people on the government aid in education. The increase of demand of the PTPN can also show that the scholarship is limited and not widely available.




[i] Najib Hairan Pas Hendak Wujud Negara Kebajikan, Date: 10-06-2011 Author: / Ere Mai, Bernama. [accessed on 22 November 2012]

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