Defending unpopular financial reforms, PM Anwar says his govt willing to ‘take bull by the horns’ and steer Malaysia away from bankruptcy

KUALA LUMPUR, Oct 7 — Prime Minister Datuk Seri Anwar Ibrahim today again stressed to investors his commitment to stop subsidising the rich, pointing to the ruling coalition’s move to rationalise diesel subsidies even as it knew the move would be unpopular.

Speaking at this year’s Khazanah Megatrends Forum, Anwar said he has fixed a problem that the past government has failed to — and did so by “taking the bull by the horns”, a point he has made persistently when addressing the business community.

“In this regard, rather than playing to the gallery of populist demand, responsible governance warrants that we must sometimes take the bull by the horns. Which is exactly what the government did last May when we decided to implement the diesel subsidy rationalisation plan,” he said.

“Rather than taking the safe course of merely paying lip service...as previous governments had done, we had to summon firm political courage to take this course of action at the risk of being unpopular.”

“If we had chosen to play safe and do nothing, knowing that the continued situation would only take us on the road to bankruptcy, then that would be dereliction of the moral duty of good and responsible governance,” he added.

Anwar insisted that the reforms were not taken in order to inflict pain and suffering on the public, but were done so they can continue to enjoy the subsidies they deserve to have while the elites “must pay back what they ought to”.

Anwar had vowed to reform government spending as part of his party’s election pledge to end what he called welfare for the rich.

In the two years since he took office, his government has rolled back blanket subsidies for essential goods like chicken, sugar, and electricity that the prime minister said had mostly benefited the rich and big companies.

The ruling coalition ended indiscriminate diesel subsidies in July this year and is expected to see through its plan to rationalise petrol subsidies, although when remains unclear.

In 2023, Malaysia allocated approximately RM81 billion to subsidies, with fuel assistance comprising the majority, but recalibrating subsidies for diesel could save the government up to RM4 billion annually — which Anwar today said is being channelled back in subsidies and cash transfers.

Anwar said today he opposes “unbridled capitalism” as he pledged to continue assisting vulnerable communities, citing his support for the views of American economist Joseph Stiglitz that the government should play an active role in balancing economic growth with social good.

Stiglitz, a Nobel laureate, is one of the speakers at the Khazanah forum.

“This is where Prof Stiglitz and I are on the same page: perhaps we differ only in terminology or the exact wording used. Prof Stiglitz calls it ‘progressive capitalism’ and I call it ‘humane economy for social justice’,” said Anwar.

He pointed to Stiglitz’s suggestions that he agree with, including more government regulations on issues such as environment and finance, and the need for the government to spend money on physical, technological and social infrastructures.

“Malaysia, like many nations, stands at a critical crossroad: to leap forward or be left vulnerable to ‘destructive’ processes,” said Anwar.

“The answer is crystal clear: Our development pathway must be forward-looking, and our solutions must serve the wellbeing of the rakyat, addressing inequality, and cultivating a mindset of shared responsibility and innovation.”