The Assessment of Direct Agricultural Investment and Cash Transfer on Households in Malaysia: An Evidence of Compensation Mechanisms for Fuel Subsidy Removal

The objective of this study was to examine the impacts introducing compensation mechanisms direct agricultural investment and cash transfer for fuel subsidy removal, with particular focus on income consumption all household segments in Malaysia. A computable general equilibrium (CGE) model built basics standardized LöfgrenCGE conduct study. without integrating any mechanism, imposed additional burdens living cost households as one important elements basket especially during period transition, thus indicating a need ultimate results revealed that introduction more desirable both low-and medium-income live high prices where their existing level would be maintained. Comparatively, by increasing use intermediate inputs production did not seem enough help rural low-income segment within period, mainly because reducing factor (factor reallocation effect), exaggerating expenditure subsequently. Thus, considered faster way needy short term. However, remained best approach gain long-lasting impacts; only helping poor, who mostly dealt activities, but also motivating overall economic activities