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Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model

Direct cash aid has been introduced to protect the poor from the impact of rising fuel prices in efforts to remove subsidies in Malaysia. Thus, this paper is aimed at evaluating the changes in prices and quantities of consumer commodities produced by 17 sectors in response to the integration of dire...

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Main Authors: Loo, Sze Ying, Harun, Mukaramah
Format: Article
Language:English
Published: Universiti Utara Malaysia 2018
Subjects:
HF Commerce
Online Access:https://repo.uum.edu.my/id/eprint/29408/1/IJMS%2025%2002%202018%2091-109.pdf
https://repo.uum.edu.my/id/eprint/29408/
https://doi.org/10.32890/ijms.25.2.2018.10502
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spelling my.uum.repo.294082023-04-30T02:19:46Z https://repo.uum.edu.my/id/eprint/29408/ Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model Loo, Sze Ying Harun, Mukaramah HF Commerce Direct cash aid has been introduced to protect the poor from the impact of rising fuel prices in efforts to remove subsidies in Malaysia. Thus, this paper is aimed at evaluating the changes in prices and quantities of consumer commodities produced by 17 sectors in response to the integration of direct cash aid into fuel subsidy removal. Specifically, the direct cash aid was a reallocation of saved resources through the complete removal of fuel subsidy. This study was carried out using the Lofgren-based computable general equilibrium (CGE) model, by simulating the before and after imposition of fiscal integration. With the withdrawal of government fuel subsidy, the findings showed that recipients of the cash aid tended to spend on basic necessities such as food and beverages, and petrol (for individual vehicle consumption). Nonetheless, the sudden increase in consumer expenditure led to higher consumer prices as current supplies was unable to catch up with increase in demand. Thus, it is advisable to have other effective, concurrent development programs to stimulate future economic development. Universiti Utara Malaysia 2018 Article PeerReviewed application/pdf en cc4_by https://repo.uum.edu.my/id/eprint/29408/1/IJMS%2025%2002%202018%2091-109.pdf Loo, Sze Ying and Harun, Mukaramah (2018) Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model. International Journal of Management Studies (IJMS), 25 (2). pp. 91-109. ISSN 2180-2467 https://doi.org/10.32890/ijms.25.2.2018.10502
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutional Repository
url_provider http://repo.uum.edu.my/
language English
topic HF Commerce
spellingShingle HF Commerce
Loo, Sze Ying
Harun, Mukaramah
Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model
description Direct cash aid has been introduced to protect the poor from the impact of rising fuel prices in efforts to remove subsidies in Malaysia. Thus, this paper is aimed at evaluating the changes in prices and quantities of consumer commodities produced by 17 sectors in response to the integration of direct cash aid into fuel subsidy removal. Specifically, the direct cash aid was a reallocation of saved resources through the complete removal of fuel subsidy. This study was carried out using the Lofgren-based computable general equilibrium (CGE) model, by simulating the before and after imposition of fiscal integration. With the withdrawal of government fuel subsidy, the findings showed that recipients of the cash aid tended to spend on basic necessities such as food and beverages, and petrol (for individual vehicle consumption). Nonetheless, the sudden increase in consumer expenditure led to higher consumer prices as current supplies was unable to catch up with increase in demand. Thus, it is advisable to have other effective, concurrent development programs to stimulate future economic development.
format Article
author Loo, Sze Ying
Harun, Mukaramah
author_facet Loo, Sze Ying
Harun, Mukaramah
author_sort Loo, Sze Ying
title Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model
title_short Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model
title_full Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model
title_fullStr Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model
title_full_unstemmed Effects of Integrating Direct Cash Aid into Fuel Subsidy Removal in The Domestic Commodity Market in Malaysia Using Computable General Equilibrium (CGE) Model
title_sort effects of integrating direct cash aid into fuel subsidy removal in the domestic commodity market in malaysia using computable general equilibrium (cge) model
publisher Universiti Utara Malaysia
publishDate 2018
url https://repo.uum.edu.my/id/eprint/29408/1/IJMS%2025%2002%202018%2091-109.pdf
https://repo.uum.edu.my/id/eprint/29408/
https://doi.org/10.32890/ijms.25.2.2018.10502
_version_ 1765299784192622592
score 13.211869

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