Prime Minister Anwar Ibrahim gave a televised address to the nation last Tuesday, where he emphasised on the need for targeted diesel subsidies while addressing public concerns.
PETALING JAYA: Economists have given Prime Minister Anwar Ibrahim the thumbs up for his explanation on targeted diesel subsidies.
Shankaran Nambiar of the Malaysian Institute of Economic Research said that by highlighting the benefits that the nation stands to gain from the initiative, Anwar was trying to build public buy-in.
The subsidy rationalisation plan is expected to yield about RM4 billion a year in savings for the government.
“The next step is to explain how he plans to execute it,” Nambiar told FMT.
In a televised special address to the nation last Tuesday, Anwar emphasised that there was a need for targeted diesel subsidies but he also gave an assurance that there will not be an immediate and complete withdrawal.
He added that much like the targeted subsidies for water and electricity, most people would remain unaffected.
Nambiar noted that there was a lot of misunderstanding and misinformation surrounding the initiative, especially on social media, and that the prime minister would have wanted to set the record straight.
“There’s no doubt that a lot of the subsidies are wasted — they’re going to groups that don’t need to be subsidised. The government will be saving through the rationalisation exercise,” he said.
“Given our fiscal position, the rationalisation has to be executed,” he added.
Nambiar also said Anwar got the ball rolling by explaining why the policy was needed while clarifying that vulnerable groups will receive government support.
International Islamic University’s Aslam Haneef said Anwar was right in not presenting the nitty-gritty of the targeted subsidies plan.
“It’s not the prime minister’s job to announced the details,” he said.
Aslam said this should be done by the relevant agencies and officials, dismissing as “unnecessary” opposition leader Hamzah Zainudin’s criticism of Anwar for the lack of details on when the policy will be implemented.
“Instead, the opposition should have given their proposals on how to implement this,” he told FMT.
The economist also said the targeted diesel subsidies were “very welcomed”, expressing hope that the same would be rolled out for petrol soon.
He pointed out that none of Malaysia’s regional neighbours subsidise diesel and petrol as much as Putrajaya, with Brunei being the only exception, while Malaysians have grown accustomed to cheap fuel.
“Giving it across the board makes no sense. We must change our mindsets on this. It’s good to have gradual lifting of subsidies, but we should also think of removing them totally, including for other ‘bad’ items like sugar,” Aslam said.
Hamzah, the Perikatan Nasional secretary-general, had said earlier that Anwar’s special address only widened people’s mistrust in Putrajaya when all they wanted to know was when the targeted subsidies would be given and how it would be channelled.
The prime minister later hit back at the Larut MP, pointing out that the government has repeatedly said targeting the subsidies was aimed at taking it off of foreigners and rich Malaysians.
