KUALA LUMPUR: The government is looking closely at targeted measures to cushion the impact of the ongoing Middle East conflict, says Datuk Seri Johari Abdul Ghani.
The Investment, Trade and Industry Minister said that its ability to respond remains constrained by limited fiscal space and Malaysia’s reliance on imported essentials.
He said that any action taken now would not be “perfect” as the situation changes rapidly, making it difficult for Putrajaya to plan with certainty.
“Whatever action we want to take today would not be a perfect step. Sometimes it is okay, sometimes it is not okay,” he said on Tuesday (April 14).
Johari stressed that the most important task now is for the country to face the uncertainty head-on and focus on priority areas that would not directly hurt Malaysians.
He said food security must remain the government’s top concern, given Malaysia imports most of its food supply, estimated at about RM100bil annually.
“Anything that happens to the cost or availability of food will definitely affect us,” he said.
He added that energy costs are the second major pressure point, warning that the government can only intervene to a certain extent because Malaysia still has limited domestic resources.
Johari noted that while Malaysia is a net exporter of gas, the returns from gas exports only amount to around 13% to 15% of the value of oil prices, and the benefits do not come immediately due to long-term contracts and a lagging period.
“If oil rises to US$120 per barrel today, gas does not immediately move in tandem because a lot of it is tied to long-term contracts,” he said.
He said Malaysia remains vulnerable as it is still a net importer of fuel overall, despite public perception that the country is fully cushioned by its oil and gas resources.
On support for industries, Johari said the government is studying in detail what further assistance can be extended to help ease difficulties faced by the business community, particularly from higher production, shipping and insurance costs arising from geopolitical tensions.
However, he was candid about the government’s limitations, saying Malaysia does not enjoy the same fiscal comfort as wealthier nations with large surplus reserves.
“We are not like some rich countries where they have surplus cash, because we don’t,” he said.
Johari pointed out that the government is still servicing about RM1.3 trillion in debt, which significantly narrows the room for broad-based interventions.
The focus now, Johari said, is to ensure that any measures introduced will protect food supply, manage energy-related pressures and reduce the burden on businesses without worsening the country’s fiscal position.
