Malaysia's Anwar says government subsidies review

Prime Minister Anwar Ibrahim said on Sunday that Malaysia is reviewing its government subsidies programme, aiming to direct money towards low-income groups, and prioritising rising costs of living as he takes office at a time of slowing growth.

He told a news conference that government agencies have two weeks to look at the implications of narrowing subsidies.

Malaysia offers subsidies to all citizens, with fuel and cooking oil accounting for the biggest expense. It subsidises electricity, sugar and flour.

Subsidies must be targeted, otherwise subsidies are enjoyed not only by the low-income group but also the wealthy, said Anwar, who emerged as Malaysia's prime minister after a closely fought election last week.

He said that other incentives will be considered for industries that no longer benefit from subsidies.

Anwar is following the stance of the previous administration which proposed a smaller budget last month, which cut subsidies due to rising commodities costs and the resulting impact on government coffers. Malaysia is expected to spend a record 77.7 billion ringgit US $17.4 billion this year on subsidies.

Anwar said he will discuss Cabinet appointments with his coalition partners in the next few days.