Malaysia cuts ministers' allowances to curb anger
Tuesday, June 10, 2008
MALAYSIAN Prime Minister Abdullah Ahmad Badawi, trying to assuage public anger over a steep hike in fuel prices, said yesterday government ministers will take a 10 per cent cut in allowances.
Abdullah also said that ministers' overseas holidays will be reduced and mega projects delayed to save costs.
Together the measures will result in a saving of 2 billion ringgit, ($835.2 million), he told reporters after a meeting to review the impact of high energy prices.
"The government also feels the people's pain and the top leadership should lead by example in facing this challenge. As such, the entertainment allowance for the prime minister, deputy prime minister and ministers and deputy ministers will be reduced by 10 per cent," he said.
Spiralling crude oil prices, which were trading at $136.80 a barrel yesterday, have driven up the cost of fuel subsidies for many governments to near crippling levels.
Malaysia followed India, Indonesia, Taiwan and Sri Lanka last week, raising pump prices and provoking a public outcry and protests by opposition groups.
Abdullah, already fighting a challenge to his leadership following a poor showing in a general election in March, earlier said the fuel hike decision was a difficult one to make, but there had not been a choice.
Petrol prices were increased by 41 per cent and diesel 63 per cent in line with a global surge in oil prices, a measure that would drive inflation to a 10-year high of 4.2 per cent in 2008. "In all honesty, it was a difficult and agonising decision to make. Many times, we have been tempted to walk away from such a difficult decision," Abdullah told an energy conference.
Malaysia's main stock index was down 1.37 per cent yesterday in step with stocks across Asia, and the ringgit fell about a quarter of a per cent, again tracking currencies in the region as investors fretted about record high oil prices.
Analysts said Abdullah's political future remained at risk and the measures announced yesterday did not add up to much.
"There are more critical things that the government should look into, such as cutting down and streamlining the public sector," said political analyst Khoo Kay Peng.
Reuters
Abdullah also said that ministers' overseas holidays will be reduced and mega projects delayed to save costs.
Together the measures will result in a saving of 2 billion ringgit, ($835.2 million), he told reporters after a meeting to review the impact of high energy prices.
"The government also feels the people's pain and the top leadership should lead by example in facing this challenge. As such, the entertainment allowance for the prime minister, deputy prime minister and ministers and deputy ministers will be reduced by 10 per cent," he said.
Spiralling crude oil prices, which were trading at $136.80 a barrel yesterday, have driven up the cost of fuel subsidies for many governments to near crippling levels.
Malaysia followed India, Indonesia, Taiwan and Sri Lanka last week, raising pump prices and provoking a public outcry and protests by opposition groups.
Abdullah, already fighting a challenge to his leadership following a poor showing in a general election in March, earlier said the fuel hike decision was a difficult one to make, but there had not been a choice.
Petrol prices were increased by 41 per cent and diesel 63 per cent in line with a global surge in oil prices, a measure that would drive inflation to a 10-year high of 4.2 per cent in 2008. "In all honesty, it was a difficult and agonising decision to make. Many times, we have been tempted to walk away from such a difficult decision," Abdullah told an energy conference.
Malaysia's main stock index was down 1.37 per cent yesterday in step with stocks across Asia, and the ringgit fell about a quarter of a per cent, again tracking currencies in the region as investors fretted about record high oil prices.
Analysts said Abdullah's political future remained at risk and the measures announced yesterday did not add up to much.
"There are more critical things that the government should look into, such as cutting down and streamlining the public sector," said political analyst Khoo Kay Peng.
Reuters
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