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Kuala Lumpur: Malaysia shelved some large building projects yesterday and pledged to spend $9 billion (Dh33 billion) more to boost rice production and ease poverty, as the government sought to quell growing public anger over rising prices.
High food and fuel prices have rankled Malaysians, threatening to unleash street protests that could break Prime Minister Abdullah Ahmad Badawi's increasingly brittle administration.
In a mid-term review of a state development blueprint, the government stuck to its average annual economic growth target of 6 per cent for 2006-2010, saying domestic spending would offset the effects of weak global demand.
The government said it was reviewing spending to focus on projects that would benefit the public as high energy and building material prices strain its finances.
To free up money for other projects, the government put on hold a 1.5 billion ringgit ($461 million) road project and a 2 billion ringgit monorail, both in northern Penang state, said Sulaiman Mahbob, director general of the Economic Planning Unit.
Penang is one of five states that fell to opposition rule during the March poll. The government also deferred plans to build administrative centres in the states of Kelantan, Sarawak and Pahang for an unspecified sum.
It allocated 30 billion ringgit more to improve health, raise rice output, build schools and rural roads and reduce poverty, bringing development spending to 230 billion ringgit under the plan that covers 2006-2010.
"The additional ceiling is to take into account additional development requirements and the increase in construction-related materials cost," the government said in the review report.
"Development projects will also be reprioritised giving priority to people-centred projects."
Badawi is battling perceptions that his government hasn't done enough to shield the public from rising inflation while it reaps hefty gains from high energy prices and doles out state contracts to well-connected tycoons. Malaysia, Asia's largest net oil exporter, earns 250 million ringgit a year in revenue for every $1 rise in crude prices.
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