M'sia feeds fiscal elephant in the room - its civil service

Siva Sithraputhran & Niluksi Koswanage & Reuters

Modified 16 Oct 2013, 8:32 am

From unwinding subsidies for food and fuel to imposing a new sales tax, Prime Minister Najib Abdul Razak has plenty to do to rescue Malaysia from a possible credit rating downgrade when he presents his government's annual budget this month.

One thing Najib won't dare risk is upsetting the country's majority ethnic Malays by downsizing a bloated civil service, despite its heavy impact on a fiscal deficit that is the biggest in emerging Asia after India.

Though the next election is only due by 2018, the ruling BN coalition is already looking nervously to the future after a contentious victory last May, and Najib cannot take for granted that his own party, Umno, won't jettison him before his term is up.

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