Posted: 20 May 2011 05:00 PM PDT
(This post appears as a column in the latest edition of The Edge)
I have been a consistent proponent of restructuring subsidies. Whether in or out of Parliament or in my writings, I have argued that Malaysia must reduce ouraddiction to subsidies if we want to safeguard our long-term economic interests. Apart from the obvious fiscal implications that extended and expanded subsidies create, they also prevent the efficient allocation of resources and shields our economy from market pricing. The latter in particular will erode our present and future competitiveness, lulling us into the belief that we are keeping pace with the world when in reality it is a function of suppressed costs courtesy of subsidies and not due to innovation and productivity.
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