KUALA LUMPUR, July 16 — A recent Asian Development Bank report praised Malaysia’s commitment to its needy in a concept called “social protection.”

Compared to other countries, the data showed that Malaysia spent 27 per cent of per capita gross domestic product (GDP) on each beneficiary. However, this expenditure only reached 14 per cent of its intended beneficiaries.

The country showed “depth”, but not “breadth”, according to the report.

Malaysia was placed eighth among 35 Asia-Pacific countries in the Social Protection Index (SPI) 2009 report. The findings of the 2009 report were only just released.

This comes at a time when Asian countries seem to be relying on state-backed welfare, with the most recent local example being the 1 Malaysia People’s Aid Scheme (BR1M) handouts by Prime Minister Datuk Seri Najib Razak.

The ADB also noted that Malaysia’s expenditure for the needy leans mostly towards insurance rather than assistance, which means those who pay more will receive more protection compared to those who really need it.

“In Malaysia, social insurance makes up over 93 per cent of all social protection expenditures. Retirement benefits dominate, either through the government pension scheme or through the private Employees Provident Fund,” the report stated.

“But overall, Malaysia’s social insurance reaches only about 1 million beneficiaries (out of a total population of about 28 million in 2009).”

As of March 31, 2013, a total of 13.69 million members were registered with the Employees Provident Fund (EPF), out of whom 6.41 million are active members contributing to their retirement savings compared with 13.26 million members with 6.28 million active members recorded in the same quarter in 2012.

However, according to studies conducted by the EPF, 70 per cent of inactive contributors had retirement savings of below RM50,000 and will spend it within the first five years of retirement.

The ADB divided social protection into three categories: social insurance, contributory schemes to help people respond to common risks; social assistance, which provided unrequited benefits to certain groups; and active labour market programmes, which help people find employment.

SPI was then obtained by dividing total spending on social protection with the total number of intended beneficiaries of all social protection programmes. A country with a higher index is deemed to have performed better in social protection.

Scoring 0.155, Malaysia came under chart toppers Japan (0.416), Uzbekistan (0.343), Mongolia (0.206), South Korea (0.2) and Azerbaijan (0.187). Neighbouring Singapore came just above with 0.169, as did the Marshall Islands (0.167).

Malaysia’s score means that the total of its social protection expenditure represents only 15.5 per cent of poverty-line expenditure.

It was also ranked second among upper middle-income countries below Azerbaijan, and ranked second among Southeast Asian countries below Singapore.

The ADB also pointed out that on average, Malaysian men are better socially-protected than the women, with an index of 0.09 compared to 0.065. In 2009, women comprised 49.2 per cent of the country’s population.

In the run-up to the recently-concluded general election, the ruling coalition Barisan Nasional (BN) had promised that it would increase the government’s BR1M cash handouts from RM500 gradually to RM1,200 for those earning less than RM3,000 a month.

The programme is a one-time handout for Malaysian households earning RM3,000 and below, and the second payout will be made this year under Budget 2013 with an allocation of RM3 billion and is expected to benefit 4.3 million households.

BR1M has reportedly helped nearly five million families at a cost of RM2.6 billion last year, increasing Najib’s approval ratings up to 69 per cent. This was largely due to a surge among lower-income households.