Activation Policies for the Poor in OIC Member States
53
The programme relies on the support of organisations to donate funds. As a result, the infrastructure
and encouragement of the government for organisations to support charities is key.
Job creation
The strong economic growth achieved by Malaysia in the late 20th century has provided significant
labour market opportunity and job creation. The labour market is typified by both a shortage of
labour and a skilled labour force87 and today’s economy relies on migrant labour. Job creation is
therefore not a significant challenge for the country overall. If individuals do not have the
opportunity to engage in the labour market due to a lack of skills then entrepreneurship provides a
role for micro finance to support poverty alleviation.
TEKUN is a programme that provides soft loans to individuals from poor communities. Different
types of financing are available based on the needs of an entrepreneur. Loans can take the form of
start-up capital for example, or of additional working capital for existing businesses to grow.
Financing is also available for businesses in the agricultural sector. As well loans, the programme
provides development and guidance to would be and existing entrepreneurs. The programme is run
under the Ministry of Agriculture and Agro-based Industry.
TEKUN contributes to poverty alleviation by targeting individuals who may not necessarily have
access to loans to create a business, such as single mothers, people with disabilities, and people who
have been released from prison. Under TEKUN, loan applicants must also attend an
entrepreneurship training programme before they can access capital. The training includes topics
such as financial management and business management.
The ongoing support TEKUN can offer entrepreneurs contributes to job creation. This is because of
the focus on supporting businesses to grow from micro, to small and then medium sized enterprises.
Clients can then be transferred to other financial institutions who cater to medium sized enterprises.
3.2.3 The way forward
The research carried out in Malaysia identified many areas of best practice. The government is
seeking to diversify the skills base to ensure that there is labour market opportunity for all skill
levels and there is sufficient engagement and targeting for disadvantaged communities. Based on the
findings, country specific recommendations have been developed. These could also be considered by
other Member States with similar labour market and poverty situation:
National policy objectives and delivery
Measures could be taken to enhance the sustainability of policy objectives and delivery.
Supported by the country’s Economic Planning Unit, there are very comprehensive arrangements to
monitor the progress of the country’s targets to achieve economic growth, including to alleviate
poverty through activation programmes. Where possible, these measures and targets should be
reviewed to ensure that they support sustainability of the outcome measures achieved. An example
would be to measure the number of people that move into work and stay in employment for specific
periods, rather than just looking at the number of individuals that move into work.
Individual programme design and performance
All individuals could be enabled to participate in vocational routes.
Currently vocational routes are seen as a last resort for dropping out of or failing education. Malaysia
has invested in developing a highly skilled workforce through educational attainment, but high
levels of educational attainment cannot be achieved by all individuals. A vocational route maybe the
best educational route for a number of individuals but it not available as a direct choice and is only
87 Malaysia Workforce Development, SABER Country Report 2013, World Bank