Malaysia can cope with economic crisis, thanks to reforms: PM Najib

Najib said the removal of petrol subsidies as well as the introduction of the Goods and Services Tax (GST) have also helped.
Najib said the removal of petrol subsidies as well as the introduction of the Goods and Services Tax (GST) have also helped. PHOTO: REUTERS

PUTRAJAYA (THE STAR/ASIA NEWS NETWORK) - Implementing economic reforms in the country has allowed Malaysia to cope with the current global economic crisis better, said Datuk Seri Najib Tun Razak.

The Prime Minister said the country's fiscal deficit has been consistently reduced year after year since the Economic Transformation Programme (ETP) was launched in 2010, adding that the situation "would be worse" if the reforms only started now.

"The country is in a more solid state compared during the time of the Asian financial crisis in 1997. We have learnt from that episode.

"When the ETP was implemented, the fiscal deficit was 6.7% then, but it has been consistently reduced every year. This year, the deficit might be at 3.2%.

"Even if it is unpopular and painful, sooner or later, the people will realise that it is the reforms we introduced back then that give us the latitude to face uncertainties.

"The latitude and space that we have now is because we started the reforms early. Imagine if the deficit today is at 6.7 per cent, our policy options would be limited," Najib said at the 2015 excellence awards for Treasury staff here on Tuesday.

Najib, who is also Finance Minister, said the removal of petrol subsidies as well as the introduction of the Goods and Services Tax (GST) have also helped cushioned the effects of the economic downturn.

"If we had not removed the petrol subsidies, the government will have to spend RM20bil every year, and that will burden us.

"The GST, while not popular, has at least given us extra income. And I have pledged to give it back to the people, and this will be done in next year's Budget," said Najib.

Sixty-five Treasury staff received the excellence awards from the Prime Minister.

Also present at the event were Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah, his deputy Datuk Johari Abdul Ghani and Treasury secretary-general Tan Sri Mohd Irwan Serigar Abdullah.