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PUTRAJAYA: Malaysia's Prime Minister Abdullah Ahmad Badawi Monday announced the government will spend four billion ringgit (US$1.18 billion) this year on pay rises for some one million civil servants.
Under the hikes, approved earlier this month, 1,002,040 civil servants will see rises of between 7.5 to 35 per cent, while the police and armed forces will receive an additional 20 per cent on their increment, Abdullah said.
They will also get a 100 per cent increase in cost of living allowances, with all the rises effective from July 1 this year, he said.
"Overall, the pay hike is worth 3.4 billion ringgit for this year, or an additional expenditure of 6.8 billion ringgit annually," Abdullah told a gathering of over 2,000 civil servants in Putrajaya, the administrative capital.
"The increase in the cost of living involves an additional expenditure of 600 million ringgit for this year or 1.2 billion ringgit per year," he said, as the workers cheered and applauded the news.
Malaysia has been reviewing salaries every five years since 1978 and officials said the last pay rise for civil servants across the board was 2002.
Abdullah, who earlier this month said civil servants deserved the pay hikes, hailed Malaysia's economic performance as a reason for the change.
"The GDP growth of the country has been good for the past five years, which is an average of 5.6 per cent annually," he said.
"This economic growth is driven by growth in private sector investments, including foreign direct investment, as well as a trade surplus which has exceeded one trillion ringgit," he said.
"This growth has resulted in an environment where interest rates, inflation and unemployment have remained low."
The prime minister said the pay hikes would help workers cope with "an increase in living costs due to higher global fuel prices."
"The government is always sensitive of how these increases will affect the lower income groups," he added.
The largest rises will go to the lowest earners among civil servants, including those who work as gardeners, drivers and clerical and administrative staff, who receive basic pay of around 480 ringgit (US$141) monthly. - AFP/yy
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