State Govt must move beyond oil palm, tourism
Published on: Sunday, December 08, 2019
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Indeed, Sabah’s revenue sources are a cause for concern looking at Sabah’s current state of affairs - no significant development has taken place since the 2019 state budget. What’s more worrying is the 2020 budget is likened to a “regressive” budget. 

I am referring to Datuk John Lo’s article titled, “Sabah’s revenue sources cause for concern,”. 

I am inclined to concur with Lo on the point that it is, indeed,  worrying when the state budget has regressed from RM4.16 billion in 2019 to RM4.14 billion in 2020. This does not augur well for the state. Instead, it not only gives the wrong signal to potential investors but also shows that the State Government is not dynamic and pragmatic in exploring new economic models. 

Eighteen months have gone by and we are still talking about oil royalties, oil palm sales tax, tax revenue, tourism tax, etc. as sources of revenue for the state. 

When economic growth is reliant on these sources, it does not give confidence to the market, let alone investing community. Sabah must realize that prospects in oil & gas are diminishing, which will result in reduced oil royalties, moving forward. 

It is time for the state to reflect a certain sense of dynamism because as the population grows, employability of people increases, and given this more jobs must be created or made available. 

In essence, the state government should embark on new business strategies and economic models to stay relevant. If the Sabah government engages itself with new and revolutionary economic models, such as “circular economy”, there is no reason for Sabah not to enjoy prolific growth. Circular economy serves to maximise utilisation of resources, recover and regenerate products and materials. 

Sabah should look ahead and seek investors who are committed to developing new economic models that not only ensure socio-economic balance that benefit communities but also protect and preserve the environment. 

Sabah’s forests are an important revenue source – but only if managed prudently and using highly sustainable forest management practices. Waste from forests, for example biomass, can be used to operate and manage the bio-hub industry, which comprises bio-refineries that uses biomass to generate energy. In turn, this energy can be used to operate and produce a host of bio-related products. 

As opportunities in the bio-hub sector expand, there would be a need to increase the ships’ cargo carrying capacities of the State’s ports. Some of these ports include the Sapangar Bay Container Port, Port of Sipitang and Kudat Port. These ports are important gateways that can help promote trade between Sabah and the regional/international countries. It would inevitably create new business opportunities, causing economic spill-over in various sectors of industry. 

This concept in entirety is not new and has been proven to be successful in Scandinavian countries that today generate a high level of clean energy, thus reducing the carbon footprint. In addition, the bio-hub industry would create huge employment opportunities (direct and indirect employment). It also has the propensity to generate healthy revenue streams and increase the state’s gross national income. As the state’s revenue increase, more strategic development opportunities can be realized, and the cycle continues. 

The reality is, Sabah must change. It must accelerate initiatives in: 

l Promoting Agriculture to ensure food security – developing and implementing the Sabah Agriculture Blueprint as soon, as possible, not wait for 2021 to implement. 

l Protecting the Environment & embarking on circular economic activities – Establishing in-roads into bio-hub industries and related growth sectors. 

l Developing a blueprint for the integrated development of ports in Sabah to promote trade and facilitate economic growth. 

It is time for the state government to engage with investors with similar mindsets, including the federal government to achieve its noble goals. Let’s move ahead and explore new frontiers – beyond the realms of oil & gas, tourism and oil palm.


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