The Role of Social Networks and Skills in Economic Activities: A Study of Extreme Povertyin Perlis

Abstract

This study examines the role of social and human capital on the economic activities of the extremely poor in Perlis, Malaysia, particularly in the context of the COVID-19 pandemic and
subsequent government interventions. The pandemic exacerbated global poverty, severely affecting middle- and lower-income groups. In Malaysia, the government responded with the Eradication of Extreme Poverty Program for Malaysian Families (BMTKM), targeting the extreme poor to enhance their economic activities through comprehensive support. This research focuses on the extremely poor households in Perlis, using primary data collected through face-to-face surveys. The study analyzes the role of social capital—measured through networks and empowerment and human capital, including education and skills, in income generation. The findings reveal that both forms of capital significantly influence income levels, with the impact intensifying after the introduction of the BMT program. The research highlights the importance of combining social and human capital to improve economic outcomes for the extremely poor,
emphasizing the need for targeted government interventions that leverage these assets to achieve sustainable income growth. The study's results underscore the critical role of social networks,
decision-making capabilities, and training in enhancing economic resilience among Malaysia’s most vulnerable populations.