Could Malaysia’s PADU be a precursor to a social credit system?

MALAYSIA — Is PADU dead on arrival? After all, only slightly over half of the 22 million Malaysians targeted have registered with it as its 31 March deadline passed.

But a more important question is whether PADU could be the precursor to something like China's social credit system.

Governments always want more data about their population. If they could wave a magic wand, I’d wager that having near complete data on their population will be one of their top three wishes.

And why wouldn’t they? Data is the new oil. Data is leverage. The more they know about their population, the more power they can have over them.

Sure, a more charitable take could be that more data means governments can provide targeted, customised services to their population.

Both can be true at the same time. But it is undeniable that this data asymmetry - the government having access to all of its population’s data but the population not having access to all of the government’s data - results in a pernicious power asymmetry.

Some might say that this is a non-issue as they trust the current government.

Sure, you might trust the government of today; you might like the leaders of today. But if Malaysia’s tumultuous recent political history is any indication, you might not like the government and leaders of tomorrow.

And all future governments will be privy to the data and could use to their own agenda.

Researchers weigh in

A senior researcher at pollster O2 Malaysia, Anis Anwar Suhaimi, summed it up perfectly, saying, “In Malaysia, the proliferation of data-gathering systems for governmental assistance raises questions about the necessity of PADU.

“Over the years, citizens contributed significant information through initiatives like BR1M, Prihatin, STR and E-Kasih, making PADU seem redundant rather than innovative,” Anis said, adding that the “redundancy is compounded by a disconnect between public and governmental expectations”.

“While citizens anticipate the government’s ability to utilise existing data from agencies like LHDN, KWSP/KWAP and E-Kasih, or even PTPTN among others, governmental reliance on individuals to furnish this data themselves has led to practical challenges,” he said.

And he has a point. Does this mean the Malaysian government can’t collate all the data already collected by these government agencies and initiatives to decide who to provide subsidies to?

Why do people need to furnish even more data? Is this mere ineptitude or is it a way to have even more oversight over the population?

Nusantara Academy for Strategic Research senior fellow Azmi Hassan chipped in, saying that those who have not been receiving aid or who will not be given aid had no reason to register with PADU.

“When Rafizi said it (PADU) is to disburse aid for those who needed it, it really backfired because it is a strategy that will not work,” Azmi said, explaining that “it will put off the majority who are not eligible to receive aid and see no reason why they should register”.

If the point of PADU is to ascertain who to provide subsidies to, why would anyone from the T20 or even a majority of the M40 sign up for it?

Since the government hasn’t been transparent with the criteria for receiving subsidies, much of the T20 and M40 would be right to assume that they wouldn’t be eligible for any subsidies and hence would forgo signing up for it.

This leads me to think that what the government really wants is to create a centralised database containing granular population data and their reasoning for needing this - to decide who to give subsidies to - is done post the fact to make it more palatable to people.

After all, PADU stands for Pangkalan Data Utama, which literally translates to Main Database.

Is PADU a precursor to a social credit system?

So why would the government need additional (and for some, intrusive) information? What is the end goal? Is it perhaps a precursor to a social credit system like what China is developing?

A social credit system - in a nutshell - is a rating system for individuals. In the Chinese example, individuals that the government deems trustworthy and moral have a higher social credit score, get benefits such as cheaper and even free local travel.

Meanwhile, those who are deemed to have a lower social credit score face issues such as travel bans and slow internet speeds. I'm sure you can already see how this can all go downhill very quickly.

Sure, they could initially say that only metrics such as loan delinquency and criminal conduct would affect someone’s social credit score.

But if the past is any indication, once the government has control of the dials, it is very tempting to include other things, perhaps even our constitutional right to dissent and political opposition.

MySejahtera as a cautionary tale

Remember MySejahtera? Heralded as an essential tool to clip the wings of COVID, it eventually morphed into our de facto local passport - without which we couldn't even pick up essential groceries.

Sure, it wasn’t legally mandated, but the government did make life incredibly difficult for those who did not register for it.

And to what end? What happened to all the data collected via MySejahtera? Neither did it help with contact tracing, nor did it reduce COVID infection rates.

Could PADU morph into MySejahtera 2.0? Initially voluntary but eventually quasi-mandatory. It wouldn't surprise me if it does.

The potential introduction of a CBDC

And with Bank Negara (BNM) now assessing the merits of introducing a Central Bank Digital Currency (CBDC), and the global bank messaging network SWIFT getting set to roll out a CBDC platform within the next two years, the push for PADU seems all the more ominous. In short, a CBDC is central bank cash made available in electronic form.

The key innovation with CBDC is the potential for individuals to hold direct accounts with the central banks or to transact directly with one another using the CBDC as a legal tender.

With CBDCs, the government would have the means to be able to dictate how and what we spend our money on. The money that we have earned through our hard work would not be ours to spend at our discretion if the government arbitrarily deems our purchase as something that’s not “sensible”, by their own definitions.

With PADU being hurried through with security concerns still plaguing it - as former Investment, Trade, and Industry deputy minister, Ong Kian Ming rightfully argued - I can’t help but wonder if it, along with the potential introduction of a CBDC are stepping stones towards a social credit system that could turn oppressive.

Even if it isn’t the explicit intention of the current government to do this, PADU still provides future governments with the plumbing necessary to eventually do this. And for this alone, it pays to be wary of PADU.

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