Friday, June 27, 2008


People must be steadfast and united in facing oil price crisis: Abdullah

• The rise in the global oil price poses the greatest challenge to the Malaysian economy as the country moves into the second half of the Ninth Malaysia Plan (9MP), says Datuk Seri Abdullah Ahmad Badawi. As such, the Prime Minister wants all levels of society to be steadfast and united in efforts to overcome the impact of the surging oil and commodity prices. “This crisis will not only have negative effects on the second half of the 9MP but also in the years to come,” he said when tabling the 9MP (2006-2010) Mid-Term Review in the Dewan Rakyat yesterday. Abdullah said efforts should be focused on meeting this challenge and making adjustments, and not let certain leaders and groups to take advantage of a difficult situation and firing up people’s sentiments with false promises just to wrest power and fulfill their personal agenda. “While the other Government leaders and I meet every week to find ways of lessening the people’s burden, these groups are busy thinking of ways to hoodwink the people. “I am confident the people can see which is true and which is false. I believe people are intelligent enough to assess the measures taken to protect their interests and to take care of the welfare of the middle and low-income groups. I believe in the kind voices and goodheartedness of the people,” he said. Abdullah said the reality was that, the oil price hike was a global phenomenon which affected all nations and was caused by various factors. He said one of the key factors which had led to the extreme rise in oil price at this moment in time was the geopolitical uncertainty. “The invasion of Iraq by the United States in 2003 has crippled one of the world’s key oil-producing nations, and has resulted in a state of unrest in the Middle East which remains unresolved. “The earlier military action in Afghanistan and most recently, Israel’s threat to attack Iran further exacerbated geopolitical tensions.” Besides that, he said, the high demand from countries such as China and India, along with the refusal of OPEC countries to substantially increase their oil production, had also contributed to higher oil prices. “The situation is made worse by the action of speculators in the oil markets of international financial centres such as New York and London.” Apart from the extreme oil price increase, Abdullah said, Malaysia’s economy was also affected by the state of global financial markets, which had yet to recover from the sub—prime crisis. “In fact, many economic experts expect that this crisis may lead to a global recession, which will surely adversely impact on our own economic prospects. “The reality is that our nation faces difficult challenges, caused by external factors which are beyond our control.” Abdullah said in the face of these difficulties, the Government must have the courage to make decisions and initiate changes that would preserve public prosperity and national interest in the long term. He said this included the recent decision to restructure oil and gas subsidies, which the Government realised would increase costs. “Nevertheless, the Government was compelled to act decisively, since the global oil price hike has put a strain on the nation’s finances. “At the same time, the move was necessary to ensure that subsidies would go directly to those who need them most. “By restructuring subsidies, we will also have greater flexibility to navigate the risks of a global recession, should one occur in the near future,” he explained. Abdullah said the rising global oil price and uncertainty caused by external factors made it difficult for any nation to fully shield its citizens from hardship. Nevertheless, he said, the Government remained committed towards doing anything within its power to lighten the burden of the people and preserve their quality of life. “Therefore, in order to continue our path towards development while addressing the challenges of the present, let us give our undivided commitment towards ensuring the success of our National Mission. “Insya Allah (God willing), with collective resolve and a unified sense of purpose, our aspirations to build a secure, peaceful and prosperous nation can be achieved”, he said. - Bernama