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KUALA LUMPUR: Malaysian Prime Minister Abdullah Badawi has called for a bold global response to the ongoing food and fuel crisis to avoid what he calls ‘a real disaster’. This as international political and industry heads gathered in Kuala Lumpur for the World Economic Forum on East Asia.
Spiralling food prices and energy costs topped the agenda at the two-day forum.
Prime Minister Abdullah who's facing a public backlash from the recent 40 per cent fuel price increase said bold measures are needed to tackle the problems.
He said: "About 100 million or more people have descended into poverty worldwide. Low and middle-income groups everywhere are feeling the strain of increased food prices on their budgets."
He said a weak US dollar, conversion of farm land for bio fuel production, export restrictions and agriculture subsidy by rich countries have contributed to rising food costs. He also took a swipe at speculators for the oil prices volatility.
As countries in Asia start to abandon or roll back their subsidies in order to divert the much-needed funds for growth and development, governments are contemplating different ways to compensate the people for the rising cost of living especially those from the lower income group.
However, Indonesia’s Trade Minister, Mari Pangestu, cautioned against hasty actions.
She said: "Countries should not panic in responding to high prices of food and fuel. When you panic, you may not undertake the appropriate policies so what's needed is to think through what are the best policy responses and it should not just be on an ad hoc response."
Malaysia's response of replacing the fuel subsidy with an annual cash rebate of US$180 saw long queues at over 680 post offices nationwide as motorists rushed to collect the money.
While many have questioned the timing and quantum of the increase, former deputy prime minister Musa Hitam said the government's drastic action is understandable.
The mad scramble has prompted the government to look into adopting another system whereby motorists can buy a fixed amount of subsidised fuel each month by using fuel cards and pay for the rest at market rate. - CNA/vm
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