The benefit myths from Nusantara
Published on: Sunday, June 26, 2022
By: Datuk John Lo
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Several politicians have made statements that Sabah will gain substantially from the development of Nusantara. With due respect, they have not supported their statements with economic logics. It is my humble opinion that their statements are fallacious.
A strong economy will always dominate a weak one.
There are many examples. [a] Singapore is a little red dot but its strong economy has dominated its two giant neighbours Indonesia and Malaysia. To a lesser extent, Asean. Singapore has about 5 million people [including migrant workers], Indonesia, 270 million, Malaysia, 30m. The brain-drain and capital flows from Indonesia and Malaysia testify her economic might. So is the strong Singapore $ from par to more than RM3. [b] China is a large country but when its economy was weak, Japan and South Korea were towering over it. No more! For the last 20 years, this position has been reversed due to China’s meteoric rise to world 2nd largest economy and super power. China is now a serious contender for the No.1 position, about to push USA down from its pedestal. [c] Both Canada and whole of Latin America are subservient to USA by virtue of it being the world’s largest economy. The incessant illegal migrant flows to USA from South America through Mexico’s border are symptomatic of the American dominant economic power.
So, don’t think for a moment that benefit will flow from Kalimantan. Likely Sabah will suffer benefit deficits unless Sabah can wise up soonest.
Unhelpful federal government.
Sabah can position to benefit from the construction of Nusantara and the rapid development of Kalimantan, only if the federal government is willing to own up its duty to build up Sabah’s economy. Right now, the federal is in a funny game mode, not easy to fathom.
[a] Its lack of policies and decisions, its ambivalent indifference on Sabah vis-a-visa the development of Kalimantan and many other issues is puzzling.
[b] The federal government is oblivious or worse, couldn’t be bothered that Kalimantan will soon, very soon, dominate the whole of Borneo Island. Sabah [and Sarawak] may become Indonesia’s vassal states like Mexico to USA.
[c] The federal government seems to be just leaving Sabah to its own devices in the light of the Kalimantan’s rapid growth.
The power that be in Putrajaya has little or no inclination to help Sabah, reason is unknown. In any cross-border trade, the federal government will get a lot more revenue than Sabah proportionately. The federal’s rejection for Sabah’s request for funds to construct the CIQ [custom, inspection, quarantine] is illogical and insensitive to Sabah’s economic aspirations.
Why would the federal government not want to facilitate and promote cross-border trade when Malaysia [Sabah] has the competitive edge now. This competitive edge will soon disappear as Kalimantan develops its infrastructure. Sabahans may soon have to go over to Kalimantan to trade and to seek employment.
The cross-border trade will promote better Indo-Malaysian relationship. The federal government is being very short sighed! Or, may be Sabah has to go down on the knees to beg. https://www.dailyexpress.com.my/ news/189739/sabah-wants-fed-govt-to-reconsider-decision-to-shelve-kalabakan-ciq-construction/
Kalimantan vs Sabah. Judge for yourself.
Sabah’s present competitive advantage which is razor thin, will evaporate fast. Judge for yourself.
[a] oil palm- Kalimantan 12 million ha [more being planted] as at 2020, Sabah 1.7 million ha.
[b] Land area-Sabah is about 20pc of Kalimantan.
[c] International Airports- Kalimantan 4, Sabah 1. Soon, international flights will overfly KKIA to one of these Kalimantan airports.
[d] Highway. the Kalimantan Highway network which is under construction will connect all its cities. Sabah’s Pan Borneo will complete in time for our grandchildren, not us, if federal government refuses to expedite. Federal government has just announced 2 more highways for the Klang Valley.
[e] Ports. Kalimantan has a large port in every coastal province. Sabah has 1 decent port in Sepanggar. POIC has not been designated an open port yet, so not counted
[f] Mining and mineral deposits. Kalimantan is miles ahead in mining. Indonesia requires compulsory downstream industrialisation. Sabah’s mining has yet to start.
[g] Power. Kalimantan will have 5 dams for hydro power. Sabah is still talking.
[h] Tourism assets. Kalimantan will overwhelm Sabah in nature tourism asset soon.
[i] Labour force. Kalimantan has sufficient labour. Sabah oil palm is dependent on Indonesia.
[j] Skilled labour. Kalimantan can rely on Indonesia. Sabah, limited. Can’t get our act together. Still quarrelling over foreigner cards.
[k] Productivity. Kalimantan’s people are much more diligent, assiduous and productive than Sabahans.
[l] Cost of living. Kalimantan is about 50pc cheaper than Sabah.
Quality of national leadership, economic leadership, Indonesia vs Malaysia.
In the final analysis, it is quality of statesmanship and economic leadership at the national level. Big difference. Indonesia’s Jokowi has vision, gumption to propel Indonesia to the world stage. Indonesia will become world’s 4th largest economy in 2050. Malaysian leaders are still playing a small-boy game in the school yard, indulging in race and religion bigotries. Unable to control security guards on length of skirt, paying scant attention on economic solutions. When the federal government talks of promotion in economic development, trade, tourism, economic relationship with other countries for Malaysia, it means W Malaysia. Sabah is simply not featured or lip service at best. The same is true in the context of Kalimantan’s imperative rapid development.
POIC to the rescue.
A computer-generated image released by Nyoman Nuarta showing the design of Indonesia’s future presidential palace at its new capital in East Kalimantan.
Talking is just air vibration. Better for Sabah to take matters into our hands. Can’t wait for the manna to drop down from federal government. Sabah politicians must fight for our rights to develop and improve our economic relationship with Kalimantan. Towards this end, Sabah should look beyond Serudong and Tawau. POIC is the ready-made solution.
Why POIC?
[a] The federal government has rejected funding of the CIQ at Serundong. So why wait? Think POIC. It has CIQ ready.
[b] Tawau ferry is kitten play for cross border trade.
[c] Lahad Datu is nearby.
[d] Most importantly, POIC has excellent port facilities with a 20m deep draught, liquid cargo facilities and a container port and the industrial park.
[e] Sabah and federal governments have jointly invested more than RM3 billion.
It is wasting away with little or no revenue. Where is the value chain for this investment? None? So, use it. All that is needed is for the federal government to wake up to POIC’s potentials.
[f] DSP Yong Teck Lee has already established relationship with CCB [China Construction Bank].
[g] The federal government need only to give POIC a free trade zone approval. Then POIC will be ready to rock!
I am quite confident that an Economic Value Chain analysis will prove that POIC will be the superior option.
The Hajiji/Yong Teck Lee partnership is the right combination to transform POIC into a strategic economic development engine.
- The views expressed here are the views of the writer Datuk John Lo and do not necessarily reflect those of the Daily Express.
- If you have something to share, write to us at: [email protected]
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