Malaysia’s proposed subsidy reform intends to replace blanket fuel subsidies with a targeted system to help those most affected by rising fuel prices. Fundamentally, governments struggle to address the vexsome political economy behind fuel subsidy reform of overcoming resistance from those who benefit from the status quo — typically the richer segments of society. Both countries established inter-ministerial task forces on energy subsidy reform. These efforts helped the government secure a broad mandate to start energy subsidy reforms in 2014, culminating in a fuel subsidy phase-out in 2019. Coordination of government programmes supporting well-being and energy affordability spread across ministries can radically improve effectiveness and prevent reversals of energy subsidy reform.

Source: The Edge Markets June 14, 2022 06:03 UTC