Mr Najib put former Malaysian Airlines Chief Executive Idris Jala (above) in charge of a thinktank to come up with a comprehensive set of reforms. -- PHOTO: IDRIS JALAKUALA LUMPUR - MALAYSIA'S government is to meet next week in a bid to slash subsidy spending that has more than doubled since 2006 and last year helped push the country to its biggest budget deficit in over 20 years.
The government of Prime Minister Najib Razak has promised to cut subsidies that cover a wide range of goods from petrol to electricity and cooking oil - key staples in this developing South-east Asian country - but has backed down, fearing a backlash from voters.
According to official government figures, subsidy spending rose to 24.5 billion Malaysian ringgit (S$10.5 billion) in 2009, 15.3 per cent of total federal government spending, more than double the 10.1 billion it spent in 2006.
In a bid to push reform through and to win public support, Najib put former Malaysian Airlines Chief Executive Idris Jala in charge of a thinktank to come up with a comprehensive set of reforms.
'Some of the proposals by Idris Jala on rationalising the subsidies will be presented to cabinet on May 26,' said a government source with direct knowledge of the matter. 'The next day, there will be a forum open to the public to discuss these subsidy proposals. All the cabinet ministers have been invited for this as well,' he said.
It was not immediately clear which of the proposals from Idris' wide-ranging review will be discussed and investors are likely to wait for the proposals to be implemented before giving a vote of confidence in Malaysian assets. -- REUTERS
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