UN Development Programme (UNDP) administrator Helen Clark today praised Malaysia’s move last year to remove fuel subsidies.

She said the UNDP endorses the International Monetary Fund’s (IMF) call to end fossil fuel subsidies, which would free up resources to tackle other issues.

“We join the call of the IMF for an end to fossil fuel subsidies everywhere in order to release precious public funds for sustainable development while also ensuring social protection for the vulnerable.

“We commend Malaysia for moving on the issue of fuel subsidies,” she said in a speech at the Global Transformation Forum in Kuala Lumpur today.

The issue of fuel subsidies was among several issues that she broached in her speech in which she stressed the importance of sustainable development, including issues of environmental protection and social welfare.

Prior to her speech, Prime Minister Najib Abdul Razak told the same forum that the removal of fuel subsidies was among the two ‘tough measures’ that he had undertaken.

The other measure was the implementation of Goods and Services Tax (GST). He credited these two measures with helping Malaysia to reduce its fiscal deficit.

'Politically unpopular'

“To do this (reduce deficits), some hard decisions had to be made. Over the last year, for instance, we undertook two very tough measures.

“The first was to remove fuel subsidies to promote competitiveness and a better, more effective allocation of resources.

“The second was to introduce the GST – politically tough, politically unpopular, but the right thing to do, and that has increased our tax base significantly. And I will talking about this more in the Budget this Friday.

“Not everyone was happy with these moves. But the measures were necessary for us to continue our transformation,” he said.