May 26, 2010

Malaysia Government's Gradual Cut In Subsidies Expected

malaysia The government’s move to reduce the huge amount of subsidies, estimated to be RM20.9bn this year, will have to be done on a gradual basis and the adjustment period could be as long as five years to manage voters’ discontent, economists said.

According to the economists, the first subsidy to be removed would be that for fuel. Last year, the government provided RM74bn in subsidies, of which 32% went to fuel and 58% for social welfare, education and healthcare while 6% went to infrastructure and 4% for food. (Financial Daily)