Published November 27, 2008

KL may consider price cuts for electricity, gas

Minister says this will lighten burden on manufacturers

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(KUALA LUMPUR) Malaysia's government may consider reducing electricity and gas prices to lighten the burden on its manufacturers, International Trade and Industry Minister Muhyiddin Yassin said yesterday.

Malaysia has in recent weeks announced policies to cushion the impact of slowing global demand for its goods by waiving import duties on more than 400 products including iron, steel and textiles. Like other Asian countries, its manufacturing industry is expected to be hard hit by the global economic slowdown.

'We have not brought the matter up to the government for consideration. It's difficult to say at this point if we will reduce the cost of electricity and gas,' Mr Muhyiddin told reporters at a manufacturing conference. 'We have to study its timing because the matter was only reviewed by the government about a year ago.'

Economic growth in the country of 27 million people is expected to slow to 3.5 per cent next year, according to government forecasts, although private sector economists are predicting growth to slow by as much as 1.5 per cent.

On free-trade talks between the United States and Malaysia, Mr Muhyiddin said talks will resume once US President-elect Barack Obama takes office in January.

'We have been informed by the new administration that is coming in in January that they want to hold back until the new administration comes in,' he said. 'What has been progressed will continue. We want to move forward. We have been given a new mandate by the Cabinet on how to progress on some of the contentious issues.'

Formal talks for a free-trade agreement have stalled mainly due to what the US describes as Malaysia's protectionism policies. The US, Malaysia's second biggest trading partner, wants more transparency in the bidding for government contracts and the country's affirmative action policy, which favours the Malay majority, has also often been a sore point in discussions. -- Reuters