Wednesday, March 01, 2006
CPPS: Oil Price Increase To Impact Lower Income Groups
KUALA LUMPUR, March 1 (Bernama) -- The recent petrol and diesel price increase will bring about an immediate and possibly significant rise in the number of poverty households, says the Centre for Public Policy Studies (CPPS).
It will also increase the economic burden of vulnerable groups, especially in urban areas, all over the country, said the CPPS, which is part of the Asian Strategy and Leadership Institute (ASLI).
CPPS chairman Tan Sri Ramon Navaratnam said it would like to call on the authorities to closely monitor the impact on the purchasing power and living standards of the poor and lower middle income groups.
He said the centre, which recently submitted a report to the government containing its proposals for the Ninth Malaysia Plan, emphasised that there was a need for the plan to take into account the price increase in its computation of the official poverty line and headcount of the poverty group.
"The official poverty incidence data has been previously criticised for being unrealistic and for underestimating the number of poverty households," Ramon said, adding that CPPS expects the fuel price increase to impact poverty statistics and projections.
The centre also called on the government to ensure that the authorities at all levels to curb public expenditure, especially on unnecessary and extravagant infrastructure, to ensure that public funds are not wasted on uneconomic projects.
"It is important that the government carries out reforms of the public expenditure monitoring system at all levels to ensure that it is efficient, effective and proactive," Ramon said.
"As part of the reform, it will be necessary to bring in the participation of civil society organisations and other independent and competent stakeholders," he said.
In this regard, the authorities should provide full details of how the expected savings from the price increase will be spent on the public transport systems, including the estimated amounts allocated to specific systems in different parts of the country, according to Ramon.
Such information, he said, will provide a degree of comfort to the public that the reduction in the fuel subsidy is being diverted towards worthwhile infrastructure. CPPS also hoped that the recent fuel increase will awaken the public at large to the importance of understanding and scrutinising the Malaysian budget, Ramon said.
"Continuous accountability and prudence will help to ensure that Malaysians are getting full value for their money," he said.
-- BERNAMA
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