Malaysia lifts steel caps.
In yet another pro-market reform under the leadership of Prime Minister Abdullah Ahmad Badawi, Malaysia yesterday lifted its price controls on steel and steel products. The cessation of state intervention, which was announced on Friday, was accompanied by the PM’s statement that regulatory barriers to trade and importation of steel products — from tariffs to reporting requirements — would be scrapped.
The free-market move was hailed by local builders’ organizations, including the Real Estate and Housing Developers Association, which said in a statement, “an open market [in steel] will ensure competitiveness for developers and subsequently cost savings for customers.” The Malaysian stock market saw the share prices for steel companies jump on the day of the move, even as the broader market suffered a daylong slump.
As noted in our earlier post on the Malaysian rice market, the free-market, pro-trade, and pro-growth instincts of the ruling coalition under PM Badawai are sound — and the lifting of controls on the steel sector is evidence of this. In a region, and an era, where classically liberal economics are too often eschewed for statist “solutions,” the Malaysian government is providing a salutary example for Asia and the world. Who benefits? In the short run, Malaysians — and in the long run, everyone who trades with them, including their number one foreign investor, the United States of America.
