Reducing subsidies key challenge for Malaysia, says ADB

KUALA LUMPUR, April 11 Reining in subsidies remains a policy challenge for Malaysia in the near future, even as the subsidy bill continues to eat into federal spending, according to the Asian Development Bank (ADB).
It noted in a report published today that the total cost of subsidies for fuel, staple foods, electricity, health and education has steadily climbed to 14.3 per cent of government spending last year, from 1.3 per cent in 1990.

ADBs Asian Development Outlook 2012 pointed out that fuel subsidies alone amounted to 4.7 per cent of government spending in 2010, and was responsible for the high per capita fuel consumption of 450 litres each year.

This was 4.5 times as much as the Thais and nine times more than Indonesians, it said.

[b]Subsidies suppress inflation, but also contribute to the chronic fiscal deficit, reduce budget funding available for social and economic development, and distort resource allocation.

The vast bulk of the subsidies benefit consumers, students, and companies in general, rather than the poor, because of inadequate targeting,[/b] the report said.

ADB added that it was unclear when the phase-down plan would resume following its suspension this year to tackle rising inflation.

More: http://www.themalaysianinsider.com/mala … -says-adb/

its not the subsidy which use a chunk of Malaysia money, a huge portion of the money were used by other unknown reasons. wasted, goes into someone pocket…

+1,000,000
If the GOV spent wisely… then the rakyat will enable to enjoy MORE Subsidies…

Agreed, the government must eliminate wasteful spending and corruption first.

They should spend the money on developing human capital at least people are able to improve their own economic life.
As the quote “Give a man a fish, you feed him for a day. Teach a man to fish and you feed him for a lifetime.”

The Rakyat say eliminating corruption and wastage is a challenge for Malaysia.

Reducing corruption in Govt is a bigger challenge than reducing subsidies.

2.4M diamond ring…y this so easy to get? 1Msia mail.fail. grazing our own cow.fail miserably. we so many oil rig go where? export to other ppl? fail. oh well…GE13 looming round the corner…no use say many2.

  • over 9000

I’ve strong feeling that the TS purpose here is that he is in support of this article and eliminating subsidies by the way he highlighted the points in the article.
If we have an efficient & clean government, we don’t even need subsidies in the first place.

[quote=“MonkeyKing”]I’ve strong feeling that the TS purpose here is that he is in support of this article and eliminating subsidies by the way he highlighted the points in the article.
If we have an efficient & clean government, we don’t even need subsidies in the first place.[/quote]
+10000, TS naive thinking as usual?

[quote=“EF-JL”][quote=“MonkeyKing”]I’ve strong feeling that the TS purpose here is that he is in support of this article and eliminating subsidies by the way he highlighted the points in the article.
If we have an efficient & clean government, we don’t even need subsidies in the first place.[/quote]
+10000, TS naive thinking as usual?[/quote]
Well I just pointed out what ADB thinks, but we all know that those wasteful spending reported by the AG and also corruption are the ones should be eliminated first.

MonkeyKing is right that with an efficient government we wouldn’t need subsidies in the first place. That is if only the government have thought of investing in human capital. Looking at how only now they realised technical skills/labor are also very much important to an economy, they start to attract people to educate themselves in vocational schools and colleges.

Achieving a ‘high-income’ nation by 2020 would be quite the impossible looking at the pace of the economy and taking into account inflation. Even with their planned minimum wage, I still think it wouldn’t make a difference when companies have to increase cost of goods tremendously (Unless of course the government implements it in stages, also there’s no clear view on whether the minimum wage includes overtime,allowances,EPF,Socso,etc).

main point… to have a better and more distinction to all this subsidies, the government have to change…
Nuff said…