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In defence of Sabah
Published on: Saturday, July 22, 2017

By Datuk John Lo
For sometime, I have heard politicians passing remarks in Sarawak “Don’t be like Sabah”.

This comment, rather unfortunate, first surfaced in the May 2016 Sarawak general election campaign and seems to have persisted. Whatever their intention may be, such a statement has negative connotations on Sabah which, as a Sabahan, I cannot accept.

Also, lately a prominent person has mentioned that Sarawak’s GNP per capita is higher than Sabah’s.

These two, combined together, may generate a misleading future scenario, that all is gloomy in Sabah.

Putting everything in perspective – historical, present circumstances and future trend – Sabah will outperform Sarawak in a matter of time. There are a number of considerations, when combined together, Sabah leaders can also say to fellow Sabahans “Don’t be like Sarawak!”

Let’s look at some fundamentals. Sarawak has been and is still a pretty much closed society.

Six families with a selected few political dynasties have a strangled hold on the economy since independence.

Nothing can move without these economic/political barons. Access to big projects or even medium size business can be out of reach for those outside this exclusive circle. Sarawakians not having connection with these “economic/political barons” have little chance. Nothing much has changed and unlikely to change in future.

Sarawak’s door is not even open to many of her own people, be it oil and gas, palm oil or other sectors.

The large number of businessmen from Sarawak who have prospered in Sabah is testimony to this “closed door” policy for last 30 or more years. Sabah has always opened our door to non-Sabahans, to Sarawakians, W Malaysians and foreigners alike. As proven globally, the people will benefit more from an open economy where there is more competitiveness coupled with prudent economic management by the government than a closed economy for the simple reason that there is more vigour in economic growth and subsequent distribution can filter down faster and to a much larger number of people. That is why Sabah has a bigger number of small and medium businesses and larger middle class than Sarawak.

Because of Sarawak’s closed economy together with past exceptionally high prices in timber and oil, there has been little efforts or incentives to restructure its economy in the rapidly changing world.

The scenario has changed for the worse. Oil price is depressed and timber is near depletion.

In Sabah, Datuk Musa, in his usual quiet demeanour, has undertaken a far-reaching restructure of Sabah’s economy soon after assuming office, the evident benefits of which have already begun to flow in recent years.

Sarawak, lingering in her cocooned comfort zone, is still dependent on exploitation of natural resources, namely, oil and gas, timber and in more recent years, palm oil. Under Musa’s vision, Sabah has moved on.

Timber revenue has become insignificant. Downstream in palm oil has made considerable headway.

Most outstandingly, Sabah has ventured with great success into the 21st century service industry, especially in tourism and is now ready to tap the potentials of the supply and transhipment services in aviation and shipping. Sarawak completed her convention centre more than 10 years ago. Like her tourism industry, it is not making much headway. MICE [Meetings, Incentives, Conventions and Events] business, like general tourism, is being smothered by its “closed door policy”. Sarawak has little major tourism products and only a few decent hotels.

One of Musa’s restructure efforts is the RM600 million SICC [Sabah International Convention Centre], which on completion next year, will overtake Sarawak’s convention centre very quickly in MICE arrivals and receipts.

Already there are indications of firm interest for corporate incentive groups of 3,000 and 5000 coming to KK.

MICE tourism will propel Sabah further ahead from Sarawak.

There are two outstandingly successful Shangri-La resorts in KK. Sabah’s conducive open business/tourism environment has contributed immensely to these two Shangri-Las’ impressive yields and sky-high occupancies – better than the KL Shang. There isn’t a Shang in Kuching. Not many countries have two Shangri-Las in this region. There is a string of other local and international 5 and 4-star brands too. In the pipeline are a number of 5-star and convention hotels in the KK port area adjoining to SICC and Tanjong Aru Eco Project.

Not much going on in Kuching.

Sabah’s KKIA is rapidly becoming a full-fledged aviation hub and gateway for the Borneo region.

KKIA is by far the second busiest airport after KLIA. Kuching airport is not even near Penang which is a poor 3rd.

Kuching is just like JB airport. KKIA’s plane landings and tourist arrivals by air in one day can equate to Kuching’s one week. International connections from KKIA to rest of the world is far ahead and can only get better – with direct flights to/from Singapore, Philippines, HK, Seoul, Taiwan, a few cities in China. Sarawak’s biggest number of tourists are from “next-door” Brunei, Sabah and Indonesia. Sabah’s numbers from every country are bigger.

Sarawak is completely out of the league for Chinese, Korean, HK, and Taiwanese tourists.

Hardware apart, Sabah’s tourism software is also miles ahead. Sabah tourism players are self-driven.

The tourism multiplier, with 2016 arrivals of 3.43 million and tourism receipt of RM7.25 billion a year, is cascading down a beneficial economic net over Sabah – from KK to Semporna, from taxi drivers to tour guides, from restaurants to hawkers, from durian planters to durian sellers, from 5-star hotels to kampong homestays, from mountain guides to diving instructors in Sabah’s numerous dive sites. Such is the diversity of Sabah’s vibrant tourism nowadays. Unbelievable but true, Semporna, with 30,000 to 40,000 visitors per month, is actually running short of hotel rooms these days.

Historical circumstances have played a dominant part in giving Sarawak a head start in oil and gas.

The colonial government started oil exploratory drilling in Miri in 1910, then Petronas continued its focus on investment in exploration, downstream facilities and giving contracts out for Sarawak, totally ignored Sabah until recently when Musa was able to take deftly steps to reverse this trend. Sarawak has also been given a big booster, no doubt at Sabah’s expense, when Sabah’s gas is being piped to Bintulu for LNG.

I can see Sabah equalising Sarawak in oil and gas in the next 10 years or a bit longer for the following reasons:

[a] Musa has signed on several downstream projects, some of which are being implemented whereas Sarawak has nothing big in the last several years. SOGIP which is ongoing and his other ideas on the drawing board will spur greater investments in downstream of oil and gas in Sabah.

[b] Sabah still has substantial reserves, especially gas. More are being discovered.

Onshore exploration has not started yet.

[c] Sabah has a FPSO [a self-contained floating oil refinery] already under contract with Petronas.

[d] Most importantly, Musa has fought successfully for Sabah to have a 25pc of Production Sharing Contracts for onshore explorations which Sarawak does not have. Only Sabah has this “break-through” contract.

Eventually Sarawak may have a slightly larger planted acreage of palm oil. With foresight, Sabah’s POIC has become the game-changer catalyst for Sabah to maintain leadership in value added downstream.

Also important, in terms of distribution of wealth, is that Sarawak’s favouring the big boys has failed to nurture small holders. Sabah has many more small-holders than Sarawak. These small holders have played a very important role in supporting the economy, giving critical support for property development in these uncertain times. They have generated tremendous amount of wealth for themselves and for Sabah’s continuous prosperity.

Sabah’s open society vs Sarawak’s close society is most evident in the respective capital cities. Kota Kinabalu is vibrant with energy, has many more international visitors and residents than Kuching at any one time.

KK has more planes landings, more hotels, more malls, more condos and recreational facilities.

KK is the place that people, including many Sarawakians, want to be, want to visit and to relax.

New chic restaurants by young Sabahan returnees from overseas are sprouting up everywhere.

KK’s waterfront is far more attractive than Kuching’s riverfront. KK has one of the top 3 sunsets in the world which Kuching, being located in land, can never have. KK has become an international city with a distinctive life style ambience. KK’s rapidly evolving sky line stands testimony to the economic dynamism of its residents.

Kuching is a stoical provincial city. KK is becoming the exciting city in Borneo. Kuching is stultifying.

Sabah’s policies in environment and environmental protection on the ground have gained world recognition.

Sabah has been in the protection phase for a long time, with comprehensive on-going replanting programme that has earned “kowtows” from international agencies and NGOs. Conservation area zoned under protection is the largest in the world for tropical forest. Sarawak is still mired in the exploitation stage. Accolades and proactive support from a number of world renown NGOs like UK’s Royal Society and personalities like Sir David Attenborough for Sabah are evidence Sabah is the role model for tropical forest conservation.

Genuine land ownership can be the quencher for effective poverty eradication as Musa has shown in Sabah.

Difficult in Sarawak, as like almost everything, land is controlled by the selected few plus government agencies, be it in the town or rural areas. Sabah’s land ownership is very much more spread out as can be seen in the sheer number of owners and titles that have been issued by Land and Survey Department.

Sabah has a far more superior and progressive system in looking after the interest of the natives in land matters.

Sarawak natives are still fighting for what Sabah natives have taken for granted years and years ago.

Sabah has been issuing Native Titles since time immemorial. To further protect native land ownership, Musa has initiated the issuance of communal native titles to prevent indiscriminate sales of Native lands.

A glaring contrast is that in Sarawak, much of the so-called land owned by natives are not formalized leases with land titles. They are just vague and imprecise “rights” called NCR [Native Customary Rights] which have resulted in many and endless legal disputes between timber companies, greedy land grabbers and natives.

Each and every claim of these NCRs has to be fought in the courts. One of the top opposition leaders Baru Bian has made a major political opposition career in fighting for the protection of natives’ land rights in court.

The fight has been necessitated because the natives have land rights but no official papers to proof ownership.

Sabah’s natives have NT titles – never have any NCR types of problems. Baru Bian would be jobless if he were to take on NCR cases In Sabah! The NCR problems for Sarawak natives have persisted and outlasted all the CMs since Independence with no solutions.

Actually, the solution is easy. Sarawak can just have to turn north to Sabah, adopt Musa’s system of communal titles. Problems solved overnight!

Above all, Sabah natives have avenues to realise the full market monetary value and potential of their land by converting them for commercial or housing development.

It is a matter of time Sabah’s average GDP per capita will catch up with Sarawak’s because of Sabah’s more dynamic and adoptable open economy. Sarawak’s reliance on natural resources like oil and gas which is now in depression and timber, is not sustainable. The trend is downwards south. More important to look at is the quality of distribution of GDP. Sarawak’s average GDP per capita, though larger in size now, is concentrated in the hands of the 6 family barons and a small number of political dynasties. What it means is that the average GDP per capita is larger, the effective dollars and cents in the pockets of the average Sarawakian is smaller than the average GDP per capita in statistics. The gap between rich and poor is very significant. The concentration of GDP is top heavy. Whereas in Sabah, the wealth is more evenly spread because of our more open economy.

Sabah’s middle class is larger in percentage to total population.

Significant to note that Sabah Government has consistently received numerous 5-star ratings from the Auditor General –many times more than the Sarawak Government. Red tapes in Sabah, admittedly there is room for improvement, is much thinner than in Sarawak. Sabah has better administration fundamentals for the future.

In terms of global interactions especially with emerging super power China, Sabah by virtue of our openness and more welcoming economy, is better placed to benefit from outside investments. This is already proven.

China opened her Consulate and Bank of China more than 5 years ahead in Kuching. But today, there are much more Chinese investments, business linkages and tourists in Sabah.

Looking at all the present and future economic factors and policies of Sabah and Sarawak, the average Sarawakians may want to tell their political leaders to stop their “Don’t be like Sabah” slanders and insist them to espouse “We Want to Imitate Sabah!” which Sarawakians who have migrated to Sabah and have prospered in our open economy, would more than agree.

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