KUALA LUMPUR: Former finance minister Tan Sri Tengku Razaleigh Hamzah has suggested that the unity government should prioritise efforts to restore economic stability, which is currently a burden for the people.

Fondly known as Ku Li, he identified the reduction in the nation's production capacity as the primary cause of the economic downturn.

"I believe that the reduction in the nation's production capacity has led to inflationary pressure. We rely heavily on imports. If we could reduce the import of goods, perhaps it could alleviate some of the pressure.

"In addition, the issue of salaries and wages also needs attention. If we decrease the reliance on foreign workers, perhaps local workers' wages can be increased," he said at a dialogue titled "Sebenar di Sebalik Ku Li: Memoir 205" at the Kuala Lumpur World Trade Center today.

The event was moderated by the Kuala Lumpur International Book Fair (PBAKL) managing chairman Mohd Khair Ngadiron, alongside Datin Zinitulniza Abdul Kadir, the author of "Ku Li: Memoir 205", and the Council of Former Elected Representatives (Mubarak) president Tan Sri Dr Abdul Aziz Rahman.

Ku Li was responding to a question about whether the rationalisation of diesel subsidies announced by the government would have a positive impact on the economy.

This was despite concerns that the decision might continue to burden the people with expected increases in the price of goods.

He stressed that economic reforms needed to be undertaken not only at the government level, but also comprehensively in the private sector.

"This needs to be done to widen the distribution of money to the people, stimulating economic growth. Through this, I believe we can address the issue of the currency exchange rate we are currently facing.

"The ringgit has depreciated significantly. The government needs to take immediate action. It's not an easy task, but it must be done now," he said.

However, Ku Li praised the targeted subsidies introduced by the government, describing them as a "way out" to avoid greater debt burdens.

"I think what the government has done is highly commendable given our dire economic situation. We have a lot of debt, liabilities in terms of guarantees for loans made by the government, statutory bodies and large companies.

"Furthermore, numerous subsidies provided by the government and leakages have caused deserving individuals to not benefit from it. It is essential for the government to ensure that those who deserve subsidies can access them.

"All this while, even foreigners have been benefiting from subsidies. Rationalising subsidies is not an easy task, but the government's intentions and efforts are commendable.

"Whether it will be successful or not, we shall see," he said.

https://www.nst.com.my/news/nation/2024/05/1055552/countrys-economic-stability-needs-be-restored-says-ku-li