Impacts on the Implementation of Social Policy : Comparative Study in Malaysia and Indonesia

Prolonged debate exists concerning the effectiveness of anti-poverty programs through micro-credit to the well-being of the poor. Some studies showed that microcredit have positive impact to the poor people's lives. However, other studies stated that what actually seemed as a remedy is actually just an increase in the business income that does not necessarily bring about to a better well-being of the poor. This paper identifies the impact of the implementation of social interventions brought in through micro-credit schemes of poverty alleviation programs for the welfare being of society in Malaysia and Indonesia. The methodology used was a combination of the quantitative and qualitative methods aimed to get the maximum results based on Standard Model of Social Development. Data analysis performed on the respondents indicated four factors leading to the failure of the welfare of the community. These factors are social networks, community participation, community development and employment opportunities. This research suggests that agencies involved in poverty alleviation through micro-credit schemes must carry out appropriate efforts towards the empowerment and active participation of the respondents in social and economic investment as stated in the Standard Model of Social Development.


Introduction
A look at the history of the development and progress of Malaysia and Indonesia since the 1950's shows that both countries have gone through several phases of transformation: social, economic, educational, cultural, political and technological (Ahmad Atory, 1990).Efforts towards the eradication of poverty of the two countries show that various social policies were implemented to increase income and improve the living standards of their citizens.In Malaysia, the government launched the New Economic Policy (NEP) in 1971 aiming to eradicate poverty and restructure society.NEP was fundamental to national development policies by eliminating economic disparities between ethnic groups and regions (Meerman, 1979).In Indonesia, the government introduced the Presidential Primary School between the years 1973-1974 and 1978-1979, which succeeded in creating greater educational opportunities to the residents of the country (Syahrul, 2009;Musni, 2007).The implementation of these social and economic policy have effectively managed to improve the lives of rural communities.
In Malaysia, poverty eradication efforts were further diversified in many areas and special agencies were set up to develop rural areas.Among them were the establishment of Federal Land Development Authority (FELDA), Federal Land Consolidation And Rehabilitaiton Authority (FELCRA), Rubber Industry Smallholders Development Authority (RISDA), Amanah Saham Bumiputera and Gerakan Desa Wawasan.The implementation of various poverty alleviation programs has contributed to a significant decline in the poverty rate.Statistics of poverty in Malaysia has dropped to 1.7 percent in 2012.In the period 2000-2010, the quality of life has improved, particularly in education, transportation, communication and housing (Economic Planning Unit, 2012).
The Indonesian government also introduced various programs to remove people from the cycle of poverty.Among the programs introduced were the Rural Underdeveloped Instruction, Rural Underdeveloped Infrastructure Development Construction Program, and Urban Poverty Prevention Program.These efforts have been successful in reducing the poverty rate to 12.4 percent, an increase in the rate of literacy, access to education and better facilities (Badan Pusat Statistik, 2013).
While the poverty rate in Malaysia showed a decline, there are still issues related to the impact of poverty alleviation programs on quality of life of the poor.One pressing issue is the ability of anti-poverty programs towards changing the living conditions of poor communities.In Indonesia, poverty eradication programs sponsored by supranational agencies were evaluated for their effectiveness in improving the living conditions of poor communities in order to achieve the HDI index.This study looks at the effectiveness of the implementation of social policies; whether these policies or programs were able to eradicate poverty through appropriate responses experienced by the target group, whether the social policies were able to meet the basic shortage of needs, eliminate or decrease social problems, and whether the social policies were able to provide better opportunities for the poor to elevate their wellbeing (Siti Hajar, 2006;Latrids, 1994).
At the local level, there is considerable fragmentation associated with large-scale studies that measure the impact of social policy on the quality of community life.In Indonesia, most of the existing social impact studies were conducted by supranational agencies that fund the social programs in the country.Additionally, comparative studies on the impact of anti-poverty programs for the welfare of the community in Malaysia and Indonesia are still lacking.This has led to the conduct of this study that is to seek answers to the effect of the implementation of poverty alleviation programs on community development in Malaysia and Indonesia; despite of the implementation of various social policies, -which include economic investment and social investment since the two countries gained independence.
Abdul Rahman and Nor Hayati (2009) reported that studies related for poverty have been done related to poverty, such as "The Study of Poverty and Socio-economic Development of Rural Communities: A Case Study in the State of Rajasthan" by Akbar Ali Kadir, which analyzes the income distribution gap.Another study is entitled, "The Role of Mass Media in The Eradication of Poverty: A Meta Analysis of Malaysian Cases "by Nerawi Sedu who investigates the role of the media in helping to reduce poverty among the Muslim community in Malaysia."Poverty among Muslims in Malaysia: a study of agency -agensi poverty eradication " is a study by Abdullah @ Alwi Haji Hassan.The study is about the effectiveness of the anti-poverty agencies such as the Social Welfare Department (SWD), Centre for Alms, Selangor, Foundation to Eradicate Poverty and Amanah Ikhtiar Malaysia.Another study is entitled "The Implementation of the Government's Poverty Alleviation Program in the City: A Comparative Study in Bandung, Indonesia and Kuala Lumpur, Malaysia" by Sugandi (2007).
The question of this study is, 'Why anti-poverty programs in Malaysia and Indonesia fail to improve the conditions of the target community?'This question addresses the problem some quarters of the public argue that anti-poverty programs implemented by the government have failed to move the poor out of poverty.In Indonesia, some quarters argue that poverty alleviation programs led to the dependency of the poor to the government as compared to empowering the target group and understanding the causes of poverty (Ritonga, 2010).Among these are the provision of food assistance to the poor on a continuous basis without training or providing economic activities that can help the poor to generate their own income.At the same time, fewer economic opportunities for the poor is made available.
In addition, there is a lack of understanding of the sources and causes of poverty and the resulting plan of action to resolve the issue of poverty.The two main key government agencies, the Central Bureau of Statistics (BPS) and the National Population and Family Planning (NPFP) use information from a different set of data.The BPS uses macro data from the Economic and Social Survey (ESS), whereasthe NPNP uses micro data from the registry of pre-prosperous and prosperous families.For example, the percentage of poverty in West Sumatra issued by CBS in 1999 was 27 percent, while the one issued by the NPNP was 84 percent.The different percentage made it difficult for the Indonesian government and the financial provisions to help the poor and execute the right action plans (Diah Aryati, 2007).
Micro-credit schemes in Malaysia began in 1987 with the establishment of the Amanah Ikhtiar Malaysia aimed at reducing poverty among the poor and low income people by providing micro-credit to finance activities that can enhance and increase revenue (Mohamed Zaini, 2010).The Indonesian government also set up agencies that offer micro-credit schemes through various agencies.Nevertheless, the Program Nasional Pemberdayaan Masyarakat Mandiri (PNPM Mandiri) acts as the umbrella to all anti-poverty programs in the country.PNPM Mandiri was launched in 2007 as a mechanism for poverty eradication involving community development.This includes activities such as starting the planning, implementation, monitoring and evaluation.

Problem Statements
A report published by the United Nations (UN) on the social conditions of the world in 2010 puts efforts to eradicate poverty as the main agenda.This effort is aimed towards liberalizing the economy and orientation strategies.Eradication of poverty refers to the policies and strategies formulated and implemented with a focus on groups of people who are classified as poor.
Malaysian and Indonesian governments use a variety of strategies to reduce the rate of poverty.While poverty is reported to decline, the ability of these programs to change the living conditions of the poor is often the subject of debate.This is because the effective implementation of social interventions is measured by the ability of policies or programs implemented to respond to the problems of poverty experienced by the target group (Siti Hajar, 2006).The question is why the eradication of poverty has no impact on the target group?What are the problems faced by both countries in the implementation of the existing programmes?
In the meantime, comparative studies on the impact of anti-poverty programs for the welfare of the people in Malaysia and Indonesia is lacking.

Objectives of the Study
This study seeks to identify factors that led to the implementation of poverty eradication programs in Malaysia and Indonesia, and the reasons for the lack of ability of these programs to contribute to the well-being of the society.

Scope of Study
This study is to evaluate and measure the impact of social policy on community development in Malaysia and Indonesia.According to Patton (2001), the evaluation of the implementation focused on informing "the decision maker of what is happening in the program, how the program has evolved and how and why it deviates from the design and initial expectations."The understanding of the differences between how the program was supposed to happen and how it was implemented can provide useful information towards the betterment of the whole process, in this case, enabling changes to improve the social policy in the future.

Strategy for Social Development
Social development programs aim to eradicate poverty and address social problems to meet social and economic needs (Midgley, 2014).Thus, social policy is an important element in eradicating poverty.Siti Hajar ( 2002) refers to social policy as "social interventions provided by the third-party or a particular sector in a country."(P.28).Projects and activities in the social intervention involves the household, community development workers, non-governmental organizations and government agencies themselves.Midgley (2012) stated that social policy can be done through individual company strategies, popular strategic community programs and strategic collective planning.
Social policies in Malaysia are developed in three phases.The first phase is from 1957 to 1969 and includes the First and Second Malaya Plan and the First Malaysia Plan.The focus of this phase is to improve the quality of life through increased export market, reduce unemployment, increase employment opportunities and to balance the distribution of income and wealth equally.The second phase, from 1970 to 1990, includes the New Economic Policy (NEP) which is aimed to restructure and reduce poverty.The third phase is from 1991 to 2020.This is a critical phase because Malaysia aspires to accelerate itself through sustainable economic growth and becomes a developed nation.
In Indonesia, social policies have grown into four levels.The first stage is during the Old Order , which focuses on community development and socio-politically.The second stage is the New Order  which comes along with the Suharto government.This stage introduced the Five Year Development Plan (Pelita) that was carried out gradually.The third stage is the era of the Reformation (1998) and the fourth is from the year 2000 to present time.Midgley (2014Midgley ( , 1995) ) stated that social development models help improve the welfare of the community through the people's participation.This leads -towards a productive economy and the creation of a prosperous society.This model takes the approach of combining social policy and economic policy as social policy and should not be seen as a unit in social policy rather acts as a complement to economic policy.This model is likely to be influenced by the social development approach that provides a variety of social intervention seeking to empower human and social capital.In fulfilling its human capital, social policy appropriately provides various forms of interventions that includes education, economic skills and training in economic development.Interventions such as these will increase the economic capacity of individuals and communities, thus contributing to economic growth.Midgley and Tang (2001) introduce three steps that contribute to the integration of social investment and economic investment, namely: 1) the establishment of a national-level organizational management of social service agencies and economic development within a framework, 2) the development of policies that ensure active community participation in the economy and 3) the introduction of productive and investment-oriented social programs.

The Standard Model for the Social Development of Poverty Eradication
World Bank (2009) released its annual report entitled "Entering the 21st Century" which recognized social capital as a complement to economic development through the improvement of social and community networks, and provide various forms of assistance that promote active people's participation in the market economy.Social Development Model supports the Millennium Development Goals which emphasizes the importance of social elements in measuring social development or welfare (United Nations, 2011).Social policies do not only able to generate economic variables such as interest rates, increase employment, investment or industrial structure, but they also assist the people towards earning extra income that can be channeled towards achieving social impact on community development (Roziah & Doling, 2000).

The Role of Social Development towards Societies Welfare
The use of social development approach to establish the welfare of society is still considered new.The economic perspective of the development approaches were used as a core spectrum of community and national development.Moser (2005) argues that social development would be a time-consuming approach for impact to be seen as the development and change of socio-economic move towards a model of neo-liberal reforms associated with globalization.
As people become the objects of social development, they should be brought together in the formulation of policies and implementation of programs.Community participation contributes to three main implications: influencing policy formulation related to the allocation and utilization of productive resources, improving living standards, and social and community work as a group most deserving of social development benefits (Bochel et al., 2009;Chatterjee & Vadapalli, 2009).
The success of the Londolozi Model at Justicia and Lilldale, South Africa is an example of how practical social intervention plays a big role in the development of a society (Groch et al., 2013).This method highlights that the combination of social and economic investment through micro-credit has created employment opportunities for the target group.In this model too, agencies and parties were involved in offering training in literacy learning, educational opportunities for children and adolescents, AIDS education and services to the local population.Through the provision of education, social services and employment for the local population, the Londolozi Model educates and assists the community to work in harmony with their environment.
In this study, we present a theoretical framework adapted from the Standard Model of Social Development by Midgley (1995).The model is tested in the social intervention micro-credit schemes implemented by the Amanah Ikhtiar Malaysia and PNPM Mandiri.

Methodology of Study
This study uses primary and secondary data for the collection of information.Primary data were collected through questionnaires distributed to 900 respondents in Melaka, Malaysia, and Riau, Indonesia.Secondary data were obtained through journals, annual reports, documentaries, books, theses and seminar papers with the aim to understand the theory, concepts, definitions, and the impact of social interventions, micro-credit schemes for the welfare of the poor in Malaysia and Indonesia.Questionnaires were designed so that all information relating to the impact of these social interventions were available.The data obtained were presented in tables and descriptive compositions.Interview were conducted on six respondents; each of the three persons representing both countries.Semi-structured questions were utilised to guide the researcher in the interview session.

Impact on Individual Welfare
The impact of individual well-being was assessed based on the level of employment and income differences compared to ten years ago, the amount of income earned and the ability to make monthly savings.The results showed that the respondents in Malaysia and Indonesia were satisfied with the existing level of employment.The majority (over 90 percent) felt that the work they're doing at the moment are very good compared to ten years ago.Changes can also be seen in the amount of their income.The majority of the respondents in Malaysia (58 percent) and the Indonesian respondents (52 percent) believed that they have sufficient income.However, 16 percent believes that the income is not enough.The results also indicated that most of the respondents (96 percent) had an awareness to save some part of their income a monthly income.

Impact on Social Welfare
Respondents of both countries gave mixed responses when asked about their social welfare state.More than two-thirds agreed that failure to change was due to failure from within self.Participants, however, stated that they participated in activities organized by the social welfare agencies after participating in anti-poverty programs by the social welfare agencies.
However, findings showed a further increase of mixed responses on other aspects such as improved self-esteem, the ability to live without assistance and confidence to function in the society.For example, 71 percent of the Malaysian respondents stated inconfidence to a life without the assistance of relevant whereas the Indonesian respondents recorded a response of 66 percent on the same item.Furthermore, less than 50 percent of the respondents from both the countries stated less confidence to communicate with the public and work together to increase their income.

Impact on Economic Prosperity
More than 70 percent of respondents from Malaysia and Indonesia agreed that the program on micro-credit loans assists towards increasing their income.In terms of lending opportunities, participants stated that they are free to generate their own income.However, there is a difference between Malaysia and Indonesia concerning the respondent's willingness to work overtime.In Indonesia, 54 percent of the respondents agreed to do overtime as compared to Malaysia with only 42 percent of respondents agreeing to do overtime.65 percent of the respondents from both countries stated that the total amount of business loan has no effect on business profits.

Analysis of the Social and Economic Welfare Impact to Malaysian Respondents
The findings of the study show that there is a tendency of the respondents to come out of poverty by engaging in social activities after the injection of motivation gained through courses organized by the social welfare agencies in Malaysia.This finding is consistent with Nader (2008) who stated that micro-credit schemes contributed to recipients having a taste of a better life.Additionally, micro credit schemes contributed to positive feelings related to freedom from poverty and the desire to meet the needs of the family (Pitt et al., 2003;Zaman, 1999).
The monthly incomes of most of the respondents are between RM300 to RM1200, but their spending are between RM600 to RM1200, a condition that indicates an imbalance between income and expenditure.Looking at this trend, the conclusion that can be drawn is that respondents tend to do side work to supplement their income (as 60 percent of respondents admitted that they did extra job to increase revenue).This finding also indicates that the amount of aid received by the respondents are insufficient and that respondents have experiences of being in debt.
Similar findings were seen in a study by Sherin Gamaleldin (2012) on the effectiveness of microcredit in the eradication of poverty in Egypt, where 53 percent of respondents admitted that the amount of aid available is not sufficient to drive their business and as a result, they seek other financial sources, such as from friends, other family members and relatives.During an interview, one respondent explained, "The small amount of loans resulted in a slow-growing business.Thus, I have to do other work as well." Two-thirds of the respondents stated that loans received resulted to an increase in business performance.However, the increase of business performance does not mean that there is an increase in revenue as the respondent was still in debt and had to do other work to survive.Respondents further stated that micro credit schemes, working overtime and bigger amount of loan do not necessarily result to the freedom to generate more income.Respondents, however, stated that they felt better changes in life because they are able to increase their personal assets.

Analysis of the Social and Economic Welfare Impact to Indonesian Respondents
Impact of micro-credit to the social welfare of Indonesian respondents can be seen on the perception of their welfare state.Similar to the Malaysian respondents, this study showed that the Indonesian respondents were aware that they are responsible for the success and failures of their own lives.The change in their life quality bring about an increase in their self-esteem, resulted to greater participation in social welfare activities, being socially active and having the ability to assist other people around them.
Social welfare programs are associated with the level of work the participants are presently having.The findings of the study found that life for the participants is better as compared to ten years ago because of the amount of income earned is sufficient, the ability to make savings and increase in personal assets.However, the lack of significant impact on the Indonesian respondents in social welfare is the confidence to survive without the help of social welfare agencies.The respondents also have less confidence even though after having engage in outreach activities.
Changes to the respondents economic environment can be seen to the aspect of their beliefs on the business performance, ability to generate own income and the desire to work overtime to improve economy.70 percent of respondents further stated disagreement that the amount of loan may contribute more business profit.Lastly, the lives of the respondents were seen to significantly improve as compared to ten years ago.This shows that they have achieved a better position in employment, business opportunities, loans and asset ownership.

Factors Leading to Failures of the Poverty Eradication Programs by Social Welfare Agencies in Malaysia and Indonesia
Both the government of Malaysia and Indonesia have introduced anti-poverty programs.Although both countries have adopted different definitions to the concept of poverty, both definitions are still related to low income, efforts to identify the poor and efforts to bring them out of the poor living conditions.Furthermore, both countries adopted the micro credit scheme as a tool to assist the poor to move out of poverty.
The results of the study concluded the existence of four main factors leading to failures of the poverty eradication programs in both countries to create better welfare as modeled in the Social Development Model.The first factor is social network.In this study, respondents fail to see the importance of having better social networking to better their businesses.Their poor involvement in programs aimed towards strengthening social network for business improvement is a manifestation of their failure to be aware of this importance.The second factor is the participation of the community.The results showed that government agencies are the main drivers towards efforts of poverty eradication.Respondents in Malaysia and Indonesia recognize that their governments have put in a lot of initiatives towards their involvement in the community.However, the lack of participation from the respondents and being too dependent on government agencies contributed to poverty eradication initiatives.
The third factor is the failure of community development efforts towards poverty eradication.The findings show that respondent's community has fail to provide opportunities to increase respondents' income revenue and better management to fulfil the necessities of life.Thus, this study found that government agencies and non-governmental organizations took over the role of the community as a "feeder" to meet the respondents' necessities of life.
The fourth factor is jobs.Since the community is not providing employment opportunities, the government acted to intervene by providing business opportunities through financial assistance and technical skills education programs.One reason to the failure of community to take up this role is its failure to observe significanbt changes to the community's demography as a result of people migration to urban areas.This study found that many rural community leaders fail to identify the needy in their community resulting to failures to help the target respondents.

Conclusions and Recommendations
This study evaluated the impact of social policy on the welfare of the poor who receive assistance to generate income through micro-credit schemes.Based on the results of the study, all respondents stated better life changes, especially in terms of employment and income.However, the expected impact on the social and economic well-being has not been achieved because of failure related to the social and economic investment as suggested in the Social Development Model.Thus, this study suggests that two elements need to be addressed by the agencies entrusted to eradicate poverty in both the countries.Programs on poverty eradication must assist participants to achieve their social and economic welfare through empowerment in social investment and active participation in economic investment.

Table 1 .
Distribution of respondents' perceptions of individual well-being

Table 2 .
Distribution of respondents' perceptions of the social welfare

Table 3 .
Distribution of respondents' perceptions of economic well-being