BR1M & the Politics of Welfare in the Global South
11 min read

BR1M & the Politics of Welfare in the Global South

BR1M & the Politics of Welfare in the Global South

With another budget in Malaysia came the announcement of another increase in BR1M payments. BR1M (Bantuan Rakyat 1Malaysia) was established in 2012 as a cash handout to the lowest 40 per cent of earners in Malaysia, and forms part of a wider collection of pro-poor welfare polices under the 1Malaysia "brand", which also includes 1Malaysia Clinics, budget grocery stores (Kedai Rakyat 1Malaysia), community internet programmes, 1Malaysia Book Vouchers, PR1MA homes, as well as social development foundations such as Yayasan 1Malaysia. Starting out as a one off cash payment of RM500 to households with a net income of below RM3000 per month, BR1M is set in 2017 to pay out RM1200 to those households earning RM3000 or less, RM450 to single households earning RM2000 or less and RM900 to households with a net income of between RM3000-4000 per month.

BR1M has however from the start been divisive. Former Prime Minister Mahathir Mohamad has termed it "dedak" (animal feed) and argued that it inculcates a spirit of welfare dependency. Whilst it was repeatedly highlighted in the 2013 General Election as a form of vote buying amongst poor rural voters and as an expression of populist economics which attempts to trade "goodies" in the budget for electoral loyalty.

And yet BR1M isn't in reality so unique. There has been a growing tendency within the Global South towards pro-poor welfare policies which seek to provide for the masses of urban and rural poor who in many cases have previously been excluded outside of the gains of development.  Thaksin Shinawatra rose to power in Thailand in the early 2000's on a platform which sought to appeal to the rural poor and which offered a series of microcredit loans, cash handouts to villages (SML) and launched the One Tambon, One Product scheme. On the other hand in Latin America the Oportunidades programme provided cash assistance to poor families in return for school attendance and healthcare checkups. Such a programme would then serve as inspiration for a series of cash transfer programmes, from Bolsa Familia in Brazil to the  Pantawid Pamilyang Pilipino Program in Philipines, Indonesia's Program Keluarga Harapan and many others.  More radically in Latin America populists such as Hugo Chavez rose to power on the basis of a series of pro-poor policies, implemented through Bolivarian Missions which sought to assist the poor through free healthcare and education provision and a series of food and housing subsidies.

Many of these programmes have faced the charges made against BR1M, that they are a form of vote-buying in which the poor are made dependent upon the charity of incumbent political parties, and a means through which the poor become a dependable vote-bloc for incumbent political parties. And yet at the centre of this critique isn't simply a critique surrounding  the development of "electoral authoritarianism" but also a liberal, or rather decidedly neo-liberal economic vision which seeks to challenge pro-poor economic policies as something  which is inimical to real (capitalist)l development, an argument which has been evident in continuing the debates around BR1M.

Thus Dr Muhammed Abdul Khalid, author of The Colour of Inequality, has argued for BR1M to become a conditional benefit to avoid the overreliance of families on the benefit. It should he argued be tied to factors such as school attendance, citing the example of the Philipines. "We don’t want them to be on BR1M forever".

Similarly Wong Chen the PKR member for Kelana Jaya has endorsed the idea of BR1M but talked of the need to incentivise the benefit. “It is not" he argued, "sufficient to give money to people just because they are poor, there should be some form of incentive". Rather he pointed towards the Brazilian Bolsa Familia, as an example of appropriate conditionalities, or the Austalian system of in-work benefits in which cash handouts would be paid through an individuals employer to incentivise work.

Whilst economist Datuk Dr Zakariah Abdul Rashid  of MIER, highlighting the importance of BR1M in increasing the income levels of the bottom 40% of Malaysian earners, has also argued that  "there are also many complaints about unproductive spending (using BR1M aid)", focusing on the need to regulate pro-poor cash handouts.

Whilst IDEAS CEO Wan Saiful Wan Jan has spoken out about the expansion of the numbers of those receiving BR1M and talked of the possibility of BR1M becoming a "permanent entitlement", arguing that the government should not be seeking to expand a programme such as BR1M but rather seeking to eradicate the need for it.

Yet what is missing in these neo-liberal critiques is an idea of the real role played by welfare and pro-poor economic policies in the politics of developing nations. Within such critiques welfare is read in opposition to capitalism, as a process of decommodification which ensures the security of the individual outside of the market place and ensures a buffer between the individual and the rampant competition of the market. Welfare is thus seen as a challenge to continuous capitalist accumulation and for the poor as a short term fix which compromises their long term inclusion within processes of development. Yet what such critiques ignore is the way in which, particularly in the new welfare models prevalent in the Global South, such pro-poor policies confuse any neat distinction between welfare and development, capitalism and non-capitalism and thus expose an altogether new logic.

To make sense of this it is first crucial to understand that the new welfare models occur on the basis of a very different relationship between welfare and development from that which was seen in the classic European welfare state. For if European welfare states emerged within developed and industrialised economies in which the role of welfare was to provide temporary relief from those excluded from the results of development, within the Global South welfare is emerging within still developing states and thus has the task of both providing for those excluded from development (the underdeveloped, the marginalised or the informalised poor) but also of assisting in the management of the process of development itself. This is a transformation of welfare from provision to governance.

Fundamental to understanding this transformation is the analysis of Kalyan Sanyal, particularly in his Rethinking Capitalist Development: Primitive Accumulation, Governmentality and Post-Colonial Capitalism which problematises the contemporary relationship between capitalism, development and the welfare and within which Sanyal argues that within post-Colonial economies new forms of capitalism and ideologies of development have brought the management of the poor (welfare) simultaneously within the remit of capitalist governance whilst nevertheless ensuring the reproduction of their exclusion outside of it, a logic which fundamentally challenges neoliberal critiques of welfare.

Yet what are the transformations in capitalism and development which Sanyal notes? Fundamental here is the emergence of continuing processes of accumulation through dispossession which have seen both pre-capitalist social and economic formations brought within the remit of capital accumulation (land enclosure, resource extraction, challenges to customary rights, intellectual property, financializaiton) whilst vast populations have been left outside (or cast outside) processes of capitalist development. This has come to challenge both the progressivist notions of capitalist accumulation which view capitalism as the progenitor of a general trend of growth and economic development, as well as the view of capitalism as driven by what Marx termed "freedom, equality, property and Bentham" (liberalism), thus rather than accumulation through disposession forming a moment in the prehistory of capital, processes of dispossession and uneven development have increasingly appeared coterminous with capitalism.

This, Sanyal argues, has fundamentally altered notions and practices of development in the Global South. Within the era of post-Colonial nationalism the state took up the development of its populations through the accumulation of capital and economic growth as a means to raise the welfare standards of the urban and rural poor (as evidenced by Nehruvian socialism, Marhenism in Indonesia, the New Economic Policy in Malaysia) and in turn emphasised modernisation and industrialisation as means by which the nation could attain power over its future. Yet by the late 1970s Sanyal argued the realisation that state-led industrialisation strategies in countries such as India were unable to full absorb the mass reserve army of labour saw a transformation in the goals of development from an attempt to empower the nation to a more modest attempts at poverty alleviation which didn't target the nation but targeted the poor. With welfare then becoming concerned with the governance of poverty and the poor welfare what occurred was then a governmentalisation of state institutions in which it was no longer the collective body of the nation but the individualized bodies of the poor which became the object of government policy and of development institutions which were now tasked not with the eradication of poverty but with its regulation.

This produced, Sanyal argues, a split between capitalism and development. Capitalism was no longer as such a means of development, rather it was the place in which the resources for development (as poverty alleviation) were produced, whilst development wasn't itself a means of increasing capital, rather it took the results of capital and  redistributed them in the form of microfinance or state welfare in order to maintain those thrown outside of the formal economy. Sanyal thus talks of a binary machinery which has emerged in the Global South in which processes of capital accumulation, which imply the production of exclusion and dispossession, continue, whilst their other hand, development, through the governance of the poor legitimises the rule of capital. This is a logic which includes that which has been excluded and maintains the exclusion of that which is included, it is as Maurice Blanchot said of the establishment of the asylum in 17th century France an attempt by society to "confine the outside" and thus conforms to Giorgio Agamben's theorisation of homo sacer as the result of an inclusive exclusion. It is in this sense that we can understand his comment that development today "not only reproduces within itself the people that is excluded but also transforms the entire population of the Third World into bare life".

Yet for the politics of contemporary welfare what is the reality of this space simultaneously inside and outside of capitalism? For Kalyan it is the space of the need economy, of economic activity defined by the meeting of basic needs rather than by systematic capital accumulation. The need economy is then the space of the informal economy, the space of hawkers, petty commodity producers, in which production is driven for the end not of economic expansion (M-C-M') but of consumption. Development within the bounds then of the need economy doesn't take the form of economic growth, but rather meeting the needs of the urban and rural poor, outside of the real economy but still within the bounds of capitalism. Thus as Sanyal highlights welfare initiatives such as microcredit which have provided the poor of the Global South with cash loans in order to be able to establish their own micro-enterprises in which small scale production is aimed toward individual consumption. Similarly Lena Lavinas has argued Conditional Cash Transfers in Latin America have paired basic social provision with the expansion of networks of debt and finance which are in turn commoditised to the benefit of capital. Thus welfare today is increasingly the provision of basic need within a need economy which is nevertheless subject to the dicates of capitalism and which, paradoxically, capitalism can benefit from.

In Malaysia this has been evident not only in the package of welfare measures contained in the 1Malaysia programme, but also in the announcement in the aftermath of the last budget to assist members of the Bottom 40 group of earners to participate in ride sharing apps such as Uber or other expressions of the sharing economy in order to unlock other sources of income amongst a group who suffer with the high cost of living, promising also funding to assist individuals to buy cars to participate in such an economy. Similarly such a philosophy was expressed by Ahok, the underfire Mayor of Jakarta who, commenting on a failed attempt to evict slum dwellers, bemoaned the fact that some dwellers had certificates of ownership over their land because of previous programmes which "let the poor easily gain things". As he went onto say:

"Everything is for the poor. Well, the implementation is wrong. For me they need affordable commodities, school fees, and medical expenses, housing, transportation, access to work, but not provide them with land. I have conveyed that with an ideology from the French Revolution, people don't need wheat fields, they need bread. Don't spoil them by giving them land with illegal certificates, that was a mistake".

In both instances we see something of the transformation highlighted by Sanyal in which provision for the poor is increasingly measured by its ability to assist the poor in their activity within the need economy and not by their ability to enter into processes of capital accumulation. Not by their ability to own capital goods but by their ability to consume goods made by capital.

As Sanyal argues this goes to the heart certain post-Colonial modes of accumulation which whilst seeking to take control of processes of capitalist accumulation largely ended up distributing the goods generated through capitalist accumulation. Thus if the Indian nationalist project initially placed its faith in industrialization and modernization to uplift the nation, the realization of persistent poverty in the face of healthy levels of industrial growth led analysts to question the ability of industrial growth to reduce poverty, which led to the development of poverty alleviation as a key goal in Indian economic development and as series of anti-poverty programmes to this end such as the  Rural Development Income Scheme and the Rural Employment Programme.

In Malaya independence was granted upon a conciliatory basis which saw the maintainence of the colonial economy as the price for the handing over of political control.Thus in the aftermath of independence the Malayan and later Malaysian government sought to correct the economic and racialized inequalities which emerged under colonial capitalism, within the economic confines of the colonial economy. Thus whilst developmentalism was important to the post-colonial state, realised through the pastoral role of the major political parties and through the creation of the Rural Industrial Development Authority (RIDA) and later through land redistribution under FELDA, the creation of MARA to advance rural Malay interests and the creation of JKK's to coordinate rural development, it remained limited in scope and inequalities between rural Malays and other groups continued to grow and poverty worsened. The tumults of 1969 saw then the abandonment of such a model and the attempt by the state to direct the process of capitalist accumulation towards the eradication of poverty and the eradication of racial divisions. This programme envisaged a transformation in the ownership of capital away from British interests and towards Bumiputera ownership, as well as an intensification of export-oriented industrialisation and of rural development initiatives which would see an increase in Malay participation in the economy. And yet the nature of these policies in the end ensured that the benefit of intensive economic modernization and wealth redistribution benefited a small elite of land owners and businessmen whilst leaving many outside of the process of intensive capitalist development, both in the rural and urban areas. In the aftermath then of the NEP there has been an increasing state focus on the management of poverty, through the establishment of microcredit loans via Amanah Ikhtiar Malaysia and welfare foundations such as YPEIM, various subsidies and increasingly direct forms of welfare such as BR1M.

Yet if this has been true of post-Colonial capitalist states is has also been true of more contemporary attempts to produce 21st century socialism. Thus in Chavez's Venezuela, his socialist model was premised upon a radicalization of the idea of development described by Sanyal whereby, dependent upon large surpluses gained through petroleum production, Chavez could embark upon a series of pro-poor welfare policies which sought to empower the poor. Yet in so far as Chavez didn't fundamentally challenge the rentier nature of Venezuelan capitalism  he could only effect a transfer of wealth and not a transfer of power, when the oil price collapsed so did, by and large, Chavismo.

What they above examples then show us is that at the root of contemporary pro-poor policies isn't a rejection of capitalist accumulation, but by and large a failure to master such accumulation, which then, to keep capitalist accumulation going requires the intervention of the state to manage those who fall outside of it. In this sense it becomes necessary to read welfare and pro-poor policies as central to the stabilisation and reproduction of capitalism and as a means through which the unruly outside of the excluded and marginalised can, instead of being left to generate excessive resentment outside of the system be pacified within it. This logic can of course be stretched by Leftist governments into an anti-capitalist direction and yet through reproducing the division described by Kalyan Sanyal they are in truth only repeating the failure to fully come to terms with the contemporary form of capitalist accumulation.

This is what a critique of welfare today will need to do. It will have to be alive to the kind of dynamics that welfare functions within and to understand the way in which neoliberal governments in the Global South can propose a series of pro-poor policies not in spite of their neoliberalism but because of it, and that welfare, far from decommodifiying social life, is itself increasingly an expression of capitalist accumulation. It will have then also to understand a new form of subjection of the urban and rural poor which doesn't occur through deprivation and exclusion but through governance and regulation. It will have to be a critique which understands capitalism in the way it really functions and not in its ideal form.