Extra support needed on recovery front: MICCI Sabah
Published on: Sunday, November 13, 2022
By: Kan Yaw Chong
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The MICCI Sabah branch annual luncheon.
This is why.
Business is hugely important in a country’s economy because it is the main economic engine for the country!
More than that - business is actually existential!
For example, Kota Kinabalu, Sandakan, Tawau, Lahad Datu, Semporna certainly would not have even existed if not because they were founded for business and trade! So a vibrant KK, vibrant Sandakan, vibrant Tawau, Lahad Datu, Semporna, vibrant Sabah with robust businesses prospers everyone.
In fact, in a complex society, everyone’s survival hangs on the goods and services created by business.
Governments only collect taxes but it’s businesses that generate the bulk of tax incomes without which there can be no successful governing forces to provide critical infrastructures, manage society and citizens’ wellbeing.
So, as powerful as governments seem, real power on the ground is the pragmatic economic engine of business.
Insane times – sustainability at stake
Hence, as the Mandarins say in a time-honoured idiom, ‘Yin shui si yuan’ which literally means ‘drink water think of root source’, business deserves more serious regard than hitherto accorded.
In normal times, businesses are more than capable of sustaining themselves.
But these days are what some commentators called ‘insane’ times, riddled with global turmoil which raises troubling concern about the very sustainability of businesses now being exposed to escalating inflationary pressures in the form of higher input costs, rising logistics and energy costs .
Captains of industries and businesses are best placed to read dire economic situations well, so it behoves people in authority and control to take respectfully crafted suggestions seriously.
Everybody has seen it for themselves, the Covid 19 pandemic had dealt business a big blow in Sabah with many closures.
Difficult times from rising costs, war and world tensions: Lee
At its first post- Covid Annual Luncheon last Tuesday, the Malaysian International Chamber of Commerce and Industry (MICCI) Sabah branch Chairman Datuk Lee Swi Heng invoked the collective voice of businesses and said the State need more government measures and support on the recovery front.
“Over the last few years, we have witnessed and experienced our sluggish economy due to the outbreak of the Covid-19 pandemic,” he said.
“These are difficult times, we are certain that the Government will help the private sector through difficult times to support business recovery,” Datuk Lee said.
While Covid has quietened down at the home front now, war drums and tensions abroad are piling on negative stresses to Sabah’s domestic economy.
Datuk Lee Swi Heng: MICCI Sabah branch Chairman.
“Away from home, the Russian- Ukraine war, the continuous US-China tension, the protests in Europe and the European economy’s structural challenges couple with the unstoppable escalation of inflation, have impacted our economy and will certainly pose challenges for all of us in the days and years ahead,” Datuk Lee said.
In what he sees as “ persistent economic challenges”, Datuk Lee cited “slow down in economic growth, low income, rising fiscal vulnerability, slow industrial upgrading or upscaling, inadequate technological capabilities, the lack of qualified human resources an availability of foreign labour in various essential sectors in Sabah.”
Given these unprecedented problems, Datuk Lee argued that “More support is needed on the economic recovery front ,” warning that “the global inflationary pressures are impacting the sustainability of businesses that are equally vulnerable and exposed to inflationary pressures in the form of higher input costs, rising logistics and energy costs .”
Not all gloom & doom
On a brighter note, however, Datuk Lee said he was “deeply encouraged” by Chief Minister Datuk Seri Hajiji’s “commitment to review and complete infrastructure projects such as the Pan Borneo Highway, the Sabah International Convention Centre and the Hub Ports more cost-effectively and efficiently.”
He also hailed Sabah is doing its part to attract investors to the State.
“However, the ‘subsidies mentality’ of any investor must be avoided at all costs as this will result in the diversion of the state resources which can be better deployed elsewhere,” Lee noted.
Since City Hall has used its ‘Love KK Network’ for meeting of minds between Captains of business and industry, hatched by Mayor Datuk Noorliza Awang Alip, with some good working effects, maybe the State Government can think of a similar networking arrangement to tap directly into the working capacity of pragmatic business pillars.
The collective views of 900-member companies from 30 countries
In his speech Tuesday, Datuk Lee explained why the MICCI Sabah branch carries weight on business issues.
He said: “Having been set up in 1994, we are one of five MICCI branches in the whole country. Today, the Chamber has over 900 member companies from 30 different countries, and this makes the Chamber the most comprehensive business voice in Malaysia, allowing it to put across to the Government the collective views and business opinions of its diverse members.”
12 ‘key issues’
Invoking his “duty” as Chairman, Datuk Lee highlighted to the State Government a list of 12 “key issues of concern to all” in MICCI Sabah and the people of Sabah in general, where the Government needs to intervene.
1. We hope that the State Government will not only implement all projects currently in the pipeline, with special emphasis given to completion of the Pan Borneo Highway by the year 2024, but also look at ways and means to improve the infrastructure of the State … be it water, power of electricity supply, internet, roads, ports, airports and such, so that Sabah will be competitive to, if not better than, the other States and also seen as the “preferred investment destination” in the eyes of potential investors... both foreign and domestic.
2. Underlying Sabah’s high poverty rate is a persistently higher-than-average unemployment rate of 9pc as compared to the 4.7pc nationwide during the third quarter of last year is alarming! The two-year pandemic aggravated the unemployment in the State, resulting in a total of 184,200 people being made redundant (as of the 4th quarter of year 2021). We fervently hope that the State Government will help to support and enable more skills training facilities for the unemployed so that they can be more competitive in the labour market.
3. The importance of human resources development must gear towards the need of progressive and tech-oriented education, such as those of AT, ICT, and drones. To avoid a ‘brain drain’ among our youths and losing them to other foreign job markets, we at the Chamber hope that measures will be taken to not only create jobs but also encourage programmes with incentives.
4. In Sabah, the next most significant contributors to its GDP and employment are the mining and agriculture sectors. The Sabah mining sector, in particular the Oil and Gas, employs 1pc of workers, whereas agriculture remains a major provider of employment, at almost three times the national rate. Despite contributing to such a high proportion of employment in Sabah, however, productivity in the State’s agriculture sector lags behind the level of productivity in manufacturing services, and mining. This “misallocation” of labour in the economy does not bode well for the economic growth of the State. Hence the economy needs to diversify into manufacturing, tourism and services sector.
5. As captains of industries, a “needs based” approach would be recommended, whereby the needs of the industries and people should be given priority. The Government must intervene and initiate good and progressive frameworks, with specific emphasis on measures to build human and capital endowments. These endowments include institutional upgrading and skills development, among others. (In fact, it is suggested that Governments need to take a deep look at how businesses are run. Businesses read their local environment well and provide services or products based on the needs of those around them, which excite and motivate them because they don’t survive otherwise).
6. In view of the impending move of the Indonesian capital city from Jakarta to Kalimantan, the Government has to consider the establishment of a comprehensive network of land, air and sea linkages with Kalimantan to further strengthen Sabah’s economic linkages with the region. We would also request that the development of the BIMP-EAGA sub-region be administered and managed by the State Government of Sabah. This must start as soon as possible. (It is believed that the development of the new capital city will include construction of modern rail links, for example, between Nusantara and Tarakan, just south of Tawau, could be something like the just completed Jakarta – Bandung bullet train.)
7. We would like the State Government re-consider the relaxation of My Malaysia Second Home (MM2H) programme for Sabah. The MM2H participants with a high net-worth, or who are highly skilled, well-educated and independent entrepreneurs will not only be able to contribute positively to business investments, provide a small lift in the property sector through their acquisition, boost human resources capability and increase the need for medical care, and also good ambassadors for Sabah tourism.
8. The Chamber also proposes that the State Government avoid “Big Project Syndrome”. We have seen significant risks and failure on these mega projects, riddled with promoters with little technical or financial know-how, and whose interest only add on layers of profits.
9. In the tourism sector, the emphasis must be on Eco Tourism, where there is little impact on the environment but great impact on the economy.
10. With the strategic location of Sabah and easy accessibility to our part facilities, the cruise tourism is an opportunity that Sabah can ill afford to miss.
11. In terms of food security, measures and strategies need to be considered for the State to be self-sustainable with its own locally grown produce and food production, and minimum reliance on imports. In this regard, sustainable agriculture practices must be encouraged.
12. In the recently announced Budget 2023, it is expansionary with lots of incentives with a view of alleviating the rising cost of living burden and strengthening the economic recovery of the country. Though the budget will be re-tabled, debated and approved by the parliament, people will support because of the benefits arising from the huge budget. However, the situation post GE15, must see political stability of the new Government to enact policies and reforms that sustain investor-confidence and address various structural problems facing the country. Only then, can there be a positive impact on our economy.
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