Friday, July 16, 2010

Subsidy rationalisation has started: Overall good for Malaysia's economy

If Malaysia continues with subsidies, Malaysia is actually subsidizing the whole region such as Thailand, Indonesia and Singapore as our subsidized goods are smuggled out of the country. This literally makes Malaysia a Santa Claus giving gifts to its neighbours. As subsidies are removed gradually and the economy becomes more market driven, we could more efficiently allocate our resources towards more productive areas, help industries to become more efficient and move up the value chain, consolidate our fiscal position and make our economy less dependent on oil. Overall, it's a good direction for the Malaysian economy.

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