Sunday, March 2, 2008

Malaysia Government To Spend RM 81 Billion In 2008 On Subsidy

Updates On Malaysia March 8, 2008 General Election

The issue of subsidies has been raised before and the government has agreed to reduce it, but it looks clearly now,it's been use as a powerful tools to buy public votes.

Second Finance Minister, Tan Sri Nor Mohamed Yakcop was recently reported by the media as saying that the government is expected to spend RM81 billion on all forms of subsidies this year "to help Malaysians cope with the rising prices."

For economist, Professor Emeritus Datuk Dr Mohamed Ariff, the subsidy policy practised by the government for over 50 years cannot be a permanent feature.

"The rakyat needs to be educated on this issue. I am not anti-subsidy, as I believe there is a valid case for subsidies under certain circumstances and this is particularly true for health care and education.

"While subsidy generally makes good politics, it connotes bad economics not only because it has adverse budgetary implications but also because it causes market distortions and misallocation of resources" he told Bernama in an interview recently.

read on the link.(right)