Malaysia Must Shift Towards Managing Supply, Reducing External Dependence -- Economist
KUALA LUMPUR, April 21 (Bernama) -- Malaysia cannot continue to rely on broad-based subsidies and price controls, and must instead shift its focus towards managing supply, prioritising spending and reducing dependence on external resources amid ongoing supply constraints, said economist Dr Nungsari Ahmad Radhi.
The Khazanah Research Institute chairman said current challenges are fundamentally driven by supply shortages, particularly in energy and essential goods, rather than price movements.
“Rather than debating about prices, the real issue is supply. We need to extend what we have and manage it better,” he told reporters on the sidelines of the Securities Commission-ASEAN+3 Macroeconomic Research Office (AMRO) Regional Economic Outlook Seminar: ASEAN at a Crossroads here today.
His remarks, which echoed earlier calls by Deputy Finance Minister Liew Chin Tong for prudent fuel usage to stretch the country’s energy buffer beyond June, also highlighted fiscal limitations and the need to reprioritise spending.
Nungsari said it is unrealistic to continue spending billions to sustain existing subsidy mechanisms under current conditions.
“We cannot keep spending billions just to maintain the current system. The priority now is to extend our reserves and ensure essential supplies last longer,” he added.
He added that limited fiscal space requires policymakers to make difficult trade-offs, including reallocating existing resources and focusing support on areas most affected, particularly small businesses facing rising operational costs.
Meanwhile, Nungsari, who is also a National Economic Action Council member, stressed the need to reduce import dependency as Malaysia still depends on external sources for critical supplies including food and energy.
He said that although there is sufficient supply of basic foods such as chicken and eggs at present, the rise in transportation and logistics costs can potentially have a broader economic impact.
Nungsari also stressed the need to boost energy efficiency and strengthen domestic production capacity, especially in the food sector, to enhance the country’s resilience against any disruption in the future.
-- BERNAMA