Case Study: Removal Of Sugar Subsidy In Malaysia

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1.0 Introduction 1.1 Removal of Sugar Subsidy in Malaysia In order to achieve economic stability and growth, the Malaysian government had plans to restructure the nation’s subsidy program steadily. On 25th October 2013, during the annual budget planning for 2014 which was themed “Strengthening Economic Resilience, Accelerating Transformation and Fulfilling Promises” the Prime Minister announced that the sugar subsidy of 34 cents will be abolished (Malaysia B.N, 2014). This pushed the market price of sugar to increase from RM2.50 to RM2.84 causing a microeconomic event. The sugar industry in Malaysia has a consistent demand which is parallel to the growth of food processing industries and households. Since there is a lack of direct substitute for the dynamic demand for sugar, this announcement caused a stir. Sugar producers and distributors whom forecasted this announcement took advantage by hiding the stock and even forced consumers to purchase additional items in order to purchase sugar causing an imbalanced economy leading to the scarcity of sugar in the market. The supply for sugar was insufficient to cater the increasing demand for it. For instance, sugar was scarce in Sabah which delayed Raya preparations (Sugaronline, 2013). Conversely, sugar producers generated higher incomes when the price of sugar increased. The rationalization of sugar …show more content…

With lower rates of diabetes and obesity reported, the money spent in aiding patients reduced and is used for other health researches. For example, new healthcare centers such as the 1Malaysia clinic was introduced to meet the medical attention of citizens at a lower cost compared to the charges of a private health center quoted in Wikipedia. Money saved on dialysis equipment’s was channeled to fund campaigns to create awareness on dengue and

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