KUALA LUMPUR – Industries affected by economic challenges, such as an increase in raw material prices, will no longer enjoy direct subsidies from the government, Economy Minister Rafizi Ramli announced today.
Instead, he said other forms of assistance that improve the structure and operations of these industries would be offered.
Rafizi said this departure from the previous practice takes into account the fact that subsidies do not properly address challenges faced by companies and only serve as a temporary band-aid.
“In the past, when a certain sector or industry faces hardship, for instance, due to the rise in the price of raw material, they will plead to the government for a subsidy,” he told reporters after attending the Invest Malaysia programme, here, today.
“Our approach now is to move away from merely giving this financial injection, which changes nothing.
“We are more inclined to cooperate with the industries so that the form of assistance is able to strengthen their competitiveness.”
Citing industries that rely on the use of gas as an example, Rafizi said rather than subsidising the gas price in the event of a hike, the government would instead encourage firms to switch their reliance on this energy source to biomass.
“Certainly they still require some help, but whatever assistance we provide should be able to change the structure and operation of the industry.”
Asked when this policy will be implemented, Rafizi said it has been introduced to certain sectors and will be expanded to others soon.
“We have sat down and discussed the matter with certain industries. And if there are other industries affected, when they meet us, we will send them the same message.
“(The message) is that we are open to working with them, but any form of assistance must be structural in nature. That will lift their competitiveness and robustness. We can’t just give them money.” – The Vibes, March 8, 2023
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