Subsidised Cooking Oils Misappropriation and Smuggling: A Case Study

Abstract

In this globalisation world, goods and products pricing is very competitive. Each country faced challenges in providing for the needs of its people. Malaysia is a middle-income country with a capacity population of 32.37 million people. Malaysia is one of the most open economies globally, with a trade to Gross Domestic Product (GDP) ratio averaging over 130% since 2010. Openness to trade and investment has been instrumental in employment creation and income growth. After the Asian financial crisis of 1997-1998, Malaysia's economy has been on an upward trajectory, averaging growth of 5.4% since 2010. With the increasing cost of living, the government is concerned about providing subsidies to reduce the burden on Malaysian citizens. There are six commodities: refined petroleum products, cooking oils, sugar, rice, wheat flour, and fertilizers. Most necessities such as rice, the cooking oils used for cooking, and petrol for daily transport are subsidised by the Malaysia Government. The implementation of subsidies is expected to reduce the cost of living for Malaysians. Nevertheless, the issue of smuggling is one of the problems the Malaysian government faces at the country's borders. The Malaysian government loses millions of ringgits a year due to the misappropriation and smuggling of subsidised cooking oils. We use a qualitative case study to determine the misappropriation and smuggling modus operandi involving subsidised cooking oils. The research obtains the data by document analysis