Watch and Learn - Malaysian PM tightens spending in first budget

A meal for under a dollar twenty. Menu Rahma, which means compassionate menu ,

is a government initiative for restaurants

and food stalls to offer affordable meals

as a way to counter the rising cost of living.

More than fifteen thousand premises

have signed up to the program since its

launch last month. "First, you don't make a loss,

you actually make a 20-25% margin, so

there's no loss here, okay?" The second

part is that you're helping somebody,

helping the poor,

helping the needy. But like many

other operators, he says this can only

be sustained if the cost of ingredients

doesn't keep increasing.

The government imposes price ceilings on certain items

like raw chicken and eggs to ensure they

remain affordable. Low-income families

spend around 40% of their income on food,

so they are the hardest hit

by rising food prices. For much

of last year, food inflation in

Malaysia was around 4%, but rose to

7% in November. But price controls have caused

a supply shortage and

consequently higher prices. Malaysia

used to produce enough eggs to export,

but when the cost of chicken feed started

to rise and the controlled price of eggs

didn't, poultry farms reduced production.

"I came to get eggs, but they didn't

have the ordinary ones, so I have no

choice but to get the special omega-3

ones, which are more expensive, and

that'll affect my custom."

The government says

it'll consider removing price caps later

this year. The country also subsidizes petrol and electricity,

among other items.

Last year, its subsidy bill ballooned to 18 billion dollars,

or around 21% of its GDP. "More often than not,

and Malaysia is not an outlier here,

most countries due to political

economy reasons or whatever, price

controls and subsidies tend to fall

into the pattern of the three 'U's, so

they become untimely, untargeted and

unmeasured, and you

have all these attendant problems."

As an issue, national debt is also rising,

while the budget deficit is expected to widen.

The government says it wants to ease the cost of living,

but it may lack the tools to get it done.

Florence Louis, Al Jazeera, Kuala Lumpur.

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Malaysian PM tightens spending in first budget