Malaysia to maintain fuel subsidies
Reuters
By Jalil Hamid
PUTRAJAYA, Malaysia (Reuters) - Malaysia plans to maintain state subsidies despite record crude oil prices, the country's premier said on Friday, less than a week after leading his party to the worst election disaster in its history.
The election saw a backlash against Prime Minister Abdullah Ahmad Badawi's government over rising prices, and the opposition has promised to increase fuel subsidies and scrutinise some of the key development projects his government launched.
But Abdullah, who had spoken before the campaign of a need to reform the subsidies, mainly on fuel and food, said his government would look for alternative ways to tackle the subsidies, which now stand at 43 billion ringgit ($13.6 billion).
"At the moment are not intending to do that," Abdullah said in a interview with Reuters and broadcaster CNBC -- his first with teh foreign media since the March 8 elections -- when asked if he intended to rein in the spending.
"But there will be some other measures that we need to take in not too long a time," he said. Queried further, Abdullah said, "There will be some other formula."
At general elections on March 8, Abdullah's National Front coalition was ousted in five of Malaysia's 13 states and lost the two-thirds majority in parliament it had held for nearly four decades, but secured a simple majority to cling to power.
The multiracial coalition has effectively ruled Malaysia since independence from Britain in 1957.
Malaysia will also keep its ban on offshore trade in the ringgit currency, said Abdullah, who shrugged off a demand for his resignation from predecessor Mahathir Mohamad to be sworn in for a second term on Monday. Continued...
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