PUTRAJAYA: The Malaysian government has announced a US$600 million cost-cutting package.Aimed at easing public discontent over the recent drastic cuts in fuel subsidies, Prime Minister Abdullah Badawi said the government will take the lead by embarking on a thrift campaign.
One of the measures is a 10 percent cut in ministers' allowance. The prime minister also said the government will defer some major infrastructure projects.
The knock-on effect from an increase in pump prices has barely filtered through the economy and already, PM Abdullah is promising to cushion the impact of the rising cost of living.
Urging the people to bear with him and the subsidy restructuring, Mr Abdullah stressed that the recent move is for the long-term viability of the economy.
He said: "We know there will be repercussion, we also have other plans to lessen the burden of the people... these measures will be announced periodically."
Announcing new measures to cut government expenditures, he said ministers and their deputies will take a 10 percent cut in entertainment allowances. Their vacations will also be limited to domestic and ASEAN destinations.
The measures are expected to lead to savings of RM 2 billion or over US$600 million, which will be converted into direct cash aid for the poor.
Other perks included widening the social safety net for the lower income group and expanding the list of controlled items to keep prices low. The government also plans to improve the public transport system.
On hindsight, Mr Abdullah said these measures should have been announced much earlier, prior to the removal of fuel subsidies that caused pump prices to suddenly jump by more than 40 percent overnight, fuelling widespread public resentment towards the government.
Malaysian opposition personalities such as Anwar Ibrahim have been using the public anger against the government to make political gains. He has reiterated his promise to lower pump prices, once he seizes power.
"Let me repeat today that we will form a new government to replace the present administration that's failed to manage the country, manage the economy. I urge the present government to resign now," Mr Anwar said.
Dubbed the prime minister-in-waiting, he insisted that he has the numbers to topple the government by September 16. While claiming that at least 30 government parliamentarians are expected to switch camps, he also predicted a snap poll this year.
Tricia Yeoh, director of Centre of Public Policies, Asian Strategy & Leadership Institute, said: "I think it's too high a stake and risk for him not to meet the September deadline because, you know, the whole of Malaysia is watching him, and something is going to definitely take place in the August-September period."
But until that happens, the government has to continue working on ways to calm angry Malaysians who are battling for their own survival amidst the rising cost of living.
Melissa Goh
Channel NewsAsia's Malaysia
10/06/08
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