KUALA LUMPUR (Malaysia) - MALAYSIA may begin cutting fuel and other subsidies under a proposed five-year plan that could save the government 103 billion ringgit (S$43.5 billion) and help avoid a debt crisis, a Cabinet minister said on Thursday.
Idris Jala, a minister in the Prime Minister's Department, said Malaysia's subsidy bill was unsustainable at a whopping 74 billion ringgit last year, or 12,900 ringgit (S$5451) per household. This comprised 15 per cent of the 2009 national budget, which pushed the deficit to a 20-year high of seven per cent of gross domestic product.
At a roadshow to gauge public opinion on the proposed subsidy cuts, Jala warned that Malaysia's debt of 362 billion ringgit , or 54 per cent of the economy, could nearly double to 100 percent by 2019 if the cuts are not carried out.
'We don't want to end up like Greece,' he said. 'We desperately need an exit strategy for subsidies as they are unsustainable ... otherwise, we have a time bomb on our hands.'
The subsidies have resulted in Malaysia having the lowest food prices in the region, and its fuel prices are among the cheapest in the world.
Under the proposal drawn up by a government think-tank headed by Jala, the government will gradually cut subsidies for fuel, gas, electricity and highway toll rates but keep its spending on education, agriculture and fisheries, and health care to help the poor. Fuel and infrastructure account for about 38 per cent of total subsidy bill. The plan has not been approved by Prime Minister Najib Razak's government, which fears a voters' backlash ahead of general elections due in 2013.
-- AP
bring the country forward or try to remain popular...
it's unpopular
They knew it eons ago but had no will to do so.
Simply because for e starting years, the bullet they gotta bite is very painful.