Update Economic reforms not meant to burden the people, says Najib

by **Cals** Tue 21 Jan 2014, 17:05

Update Economic reforms not meant to burden the people, says Najib

Business & Markets 2014

Written by Bernama

Tuesday, 21 January 2014 15:30

PUTRAJAYA (Jan 21): Prime Minister Datuk Seri Najib Tun Razak said economic reforms, including subsidy rationalisation, is important to transform Malaysia into a high-income economy.

"This (rationalisation) is not a deliberate attempt to burden the people. Why would I want to burden them? We were chosen by the people and we stand by their support.

"It is intended to benefit the country and the people in the long-run... there is no other hidden intention," he told a monthly gathering of the Ministry of Finance here today.

Present were Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah, Deputy Finance Minister Datuk Ahmad Maslan and Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah.

Najib, who is also Finance Minister, said the government had to implement gradual subsidy rationalisation besides channeling handouts in the form of the 1Malaysia People's Aid (BRIM) and schooling aid to vulnerable groups while simultaneously reducing the country's deficit.
Najib said the government allocated RM40 billion for subsidies and incentives this year, of which, about RM22 billion would be spent on oil subsidies.

"As such, the government has no choice but to implement subsidy rationalisation in stages... before the subsidy was not high, it was between RM3 billion and RM4 billion, but as consumption increased, the oil subsidy value rose significantly to RM22 billion," he said.

In order to attain developed nation status in 2020, the prime minister said economic reforms were crucial to avert the economy from slipping into a recession or to stagnate.

Citing an example, he said in the 80's, Japan was predicted to become an economic superpower but it failed to restructure its economy which resulted in growth remaining stagnant and uncertain for 20 years.

"Besides, China's economy is not as vibrant as before and growth is capped at between 7 per cent and 7.5 per cent and the country is also faced with structural challenges which has to be addressed by its leaders.
"These examples just go to show that Malaysia wants to get away from the middle-income trend, we have to reform our economy in order to achieve rapid growth.

"If we don't undertake economic reforms, growth will be reduced and slow... If this happens, Malaysia will not be able to transform into an advanced economy," he added.

Najib also stressed that Malaysia did not experience any economic turmoil and continuous growth of between five per cent and 5.5 per cent was expected.

He said Malaysia undertook stringent steps to restructure the economy to ensure sustainability for years to come.

The prime minister said Malaysia must focused on resource utilisation in areas which can spur high growth and productive investment in order to attain moderately high economic growth.