Malaysia must shift to supply management, cut external dependence, says economist

 

Economist Dr Nungsari Ahmad Radhi says Malaysia must move away from broad-based subsidies and price controls, and instead focus on managing supply, prioritising spending and reducing reliance on external resources amid ongoing supply constraints. – NSTP pic

KUALA LUMPUR: Malaysia must move away from broad-based subsidies and price controls, and instead focus on managing supply, prioritising spending and reducing reliance on external resources amid ongoing supply constraints, says economist Dr Nungsari Ahmad Radhi.

The Khazanah Research Institute chairman said current challenges were fundamentally driven by supply shortages – particularly in energy and essential goods – rather than price movements.

"Rather than debating prices, the real issue is supply. We need to stretch 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 echoed earlier calls by Deputy Finance Minister Liew Chin Tong for prudent fuel consumption to extend the country's energy buffer beyond June, while underscoring fiscal constraints and the need to reprioritise spending.

Nungsari said it was 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 said.

He added that limited fiscal space would require policymakers to make difficult trade-offs, including reallocating resources and directing support to the most affected sectors, particularly small businesses facing rising operating costs.

Meanwhile, Nungsari, who is also a member of the National Economic Action Council, stressed the need to reduce import dependency, adding that Malaysia still relied on external sources for critical supplies such as food and energy.

He said that while supplies of basic food items such as chicken and eggs remained adequate, rising transportation and logistics costs could have wider economic implications.

Nungsari also called for improved energy efficiency and stronger domestic production capacity, particularly in the food sector, to enhance the country's resilience against future disruptions. - NST