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Macro, micro econ framework needed
Published on: Sunday, April 07, 2024
By: Datuk John Lo
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I wish him and all the professionals well and hope they can put together a functional SPC in its 3rd year of existence soonest possible so that all Sabahan professionals can play their rightful roles in the rapidly improving economic landscape of Sabah.
STOP MUDDLING THROUGH!
The world has raced ahead in artificial intelligence, meaning computers can think and perform better than humans within 5 years. Malaysia [meaning Malaya, Sabah excluded] is the world’s 5th largest in chip manufacturing, car manufacturing and advanced petroleum products in a big way, high speed rail. Poor Sabah!
Sabah’s only major infrastructure project, Pan Borneo is still languishing at a snail pace. 3rd busiest Penang airport, will have a RM1Billion renovation. In sharpest contrast, 2nd busiest KKIA will have a miserable budget for renovation of toilets and minor items.
Sabahans have been fooled for far too long [and we allowed it!] cos we have been muddling through AIMLESSLY. In the 60 years of MA63, Sabah’s economy has continued to be stuck in basic, low value commodity production of timber, oil and gas and later, oil palm.
NO DOWN STREAM OR ECONOMIC VALUE CHAIN. Sabah’s leaders have been extremely naïve and/or negligent in managing our economy.
We have subsidised the development in Malaya with our oil and gas and oil palm. PETRONAS’ annual profit during Tun M’s rule were already in excess of A HNDRED BILLION. Accumulatively, PETRONAS’ profit must be in TRILLIONS since it started to pump oil and later gas from Sabah.
How much of the TRILLIONS for Sabah’s economic development?
SABAH HAS BEEN AND STILL IS A MAJOR PRODUCER OF OIL AND GAS. TIMIDLY AND MEEKLY, SABAH HAS SUBMITTED AND ACCEPTED CRUMBS UNTIL RECENTLY.
Sabah has produced many millionaires and billionaires for Malaya. Sabah has produced the worst poverty state for our own Sabahans.
All these are the consequences of Sabah’s muddling through.
SABAH MUST ADOPT ASSERTIVE, PROGRESSIVE ECONOMIC POLICIES TO BENEFIT SABAHANS.
There are many discernible signs of success of Hajiji’s efforts to steer Sabah’s economy onto the right path.
Latest, Hajiji has stressed in his address to SEDIA that Sabah should reduce economic reliance on basic commodities, must have industrialization and down-stream/economic value chain in all our economic sectors to benefit Sabahans.
This is the right way. Jokowi has implemented a similar policy for Indonesia despite strenuous objections from the West. The Indonesian economy has since surged to unprecedented growth. Many African countries have likewise adopted such a policy.
Sabahans must realise that the national economic model has worked against Sabah in the last 60 years. And Sabah’s own economic model has failed quite dramatically.
Time for Sabahans [1] to unite, [2] to protect the present political stability, [3] to build a new economic model [a] that can benefit Sabahans, [b] that will prioritise Sabahans’ interest, [c] that will give us a better life, [d] that will give our children a better future.
[4] Sabah must discontinue to make non-Sabahans rich at our expense. In simple words, Sabah must manage our economy to benefit ourselves first. We must stop muddling through, must stop “1 step forward, 3 steps backward”.
SABAH MUST HAVE MACRO & MICRO ECONOMIC FRAMEWORK, POLICIES + ELITE OFFICERS TO EXPEDITE ECONOMIC REFORMATION AND TRANSFORMATION.
I stand to be corrected. Since MA63 Sabah has very few cohesive macro and micro economic policies Hence the muddling through has persisted with devastating consequences.
To better manage Hajiji’s economic reformation and transformation, Sabah must have a well-designed macro and micro economic framework and policies. Must also have elite officers to implement them.
There is no better person, more eminently qualified Sabahan than Tan Sri Andrew Sheng to do this. His experience spans from Bank Negera Malaysia, World Bank, Deputy CEO of HK Monetary Authority, Chief Adviser to the China Banking Regulatory Commission, Economic Adviser to HK’s Chief Executive. The list goes on!!!!
Andrew can be invited to head a small group to draw up a Macro and Micro economic framework that can steer Sabah’s economy, present and into the future.
PARAMOUNT QUESTION: WHAT, HOW SABAH CAN BENEFIT.
In every economic policy, budget, project especially federal ones, domestic/foreign investment, Sabahans must demand answers -- What is in it for Sabah?
What is Sabah’s economic returns? How and where are the benefits for Sabahans? Here are some examples where assertiveness in economic management is required urgently.
[1] Peanut Revenue from Sabah’s Land Resources
Sabah is the second largest state [bigger than Malaya]. What benefits are we getting from millions of hectares of [a] 232,000 native titles. Why most of these are under cultivated or uncultivated? [b] 3.574 million hectares of the best tropical forest in the world, [c] 1.6 million ha of FMUs. [d] Sabah has 1.74 million hectare of oil palm. Sabah is charging land assessment of RM6 per acre for oil palm compared to Pahang’s RM124.10.
Taking into consideration of large plantation owners’ refusal to go stream, sales tax for Sabah and not so good infrastructures, Sabah should levy at least RM50 per acre.
Definitely not dirt cheap RM6. If we allow it, the plantation owners want free assessment.
[3] What is Sabah’s return from Natural Forest and Conservation?
Sabah used to have the richest tropical forest in the world. Sabah’s largest revenue was from forest. We have badly managed the forestry resources, exported raw logs in neck-breaking speed, “submarined” logs out illegally, leakages in royalty payments.
Timber has made a few politicians and businessmen rich beyond imagination and most Sabahans dirt poor. To summarize, the timber has been Sabah’s curse for ordinary Sabahans. I understand that the TAIKOs of the timber industry [what is left of it] are non-Sabahans now.
Timber revenue is now a fraction of what it used to be, less than RM200m. Cost exceeds RM100m. Net revenue is peanuts.
While some officials indulge in self-praise on forest conservation and bask in glory on the international stage, the basic questions are: [1] what are our economic returns in dollars and cents? [2] Where are the jobs? [3] Where is the down-stream? [4] Where is the revenue?
Net revenue of less than RM100 million is inconsequential.
[4] What is the REVENUE from FMU [Forest Management Units], ITP [Industrial Tree Plantations].
Pertinent facts: [a] Marvelous initiative by Yong Tech Lee when he was CM in the 1990s. [b] More than 30 FMUs licences issued. [c] About 1.6 million hectares have been reserved for FMUs.
Questions: [a] There should have been at least 2 full harvest cycles, [3 was possible] of planted timber. Is there? If none, why? [b] How many ITP logs have been produced? [c] What is the revenue for Sabah government?
[d] How many jobs for Sabahans? [e] How much investments generated? [f] What are the multiplier effects? [g] Who are responsible for the blockages? How to clear these blockages?
Tan Sri Majid Khan in his acceptance speech of Honorary PHD in Forestry from UMS has said from 400,000 ha of ITP, Sabah could have produced RM30 billion GDP, numerous jobs for Sabahans! TAS has estimated 80,000 skilled and semi-skilled jobs. Why aren’t the officials excited? Not pushing forITP?
What can Sabah show after more than 25 years of FMU? Is the lack of progress due to [a] negligence? Ineptness? Sheer indifference? Resistance for Sabah to have a new industry? [b] lack of expertise? [c] inability to build an ITP system? [d] is there an elite officer to lead to develop FMU?
Serious negligence if Sabah can’t succeed in building an ITP industry after more than 25 years. ITP is one of Sabah’s lowest hanging fruits. Sabah enjoys considerable comparative advantages over NZ, China, USA, Russia.
ITP can realise Hajiji’s wish for Sabah’s economy to go beyond production of basic commodities as ITP can produce a robust downstream industrialization. Sabah can excel over Sarawak in ITP quite easily. Additionally existing ITP investors have achieved 100% Sabahan employees.
If there is a valid reason NOT go into ITP, say so. The opportunity cost is very expensive for Sabah. Implement another option so that Sabah can get some decent returns from the 1.6 million hectares of land. Sabah should not allow these 1.6 million hectares not earning revenue ad infinitum.
[5] TAED [Tanjong Aru Eco Development.
Conceived, planned more than 10 years ago. Launched on 16 September 2013. Supposed to be a multi-billion project. Tens of millions have been spent on planning and professional fees. TAED is go, stop, go, stop, heading nowhere. A definitive decision has to be made.
WE CAN DO IT! CAN DO MUCH BETTER!
Yes. We can do it. Look at the success of SMJ Energy Sdn Bhd, SOGDC [SOGIP] Sabah Credit Corporation, SEC, KKIP, Desa Plus. Number of performing GLCs will expand rapidly when Masidi’s revamp on GLCs gets underway.
Rapidly rising star is POIC Lahad Datu which has obtained FZ [Free Zone] status in record time, the results of quality preparation and persistent follow ups with Federal Ministry of Finance.
POIC Lahad Datu will transform the East Coast into an industrial/trading hub. Wasting no time, Hajiji has already promised to provide another 3000 acres for its development.
The commonality among these GLCs is responsible Boards of Directors and quality management.
A well-conceived Macro and Micro economic framework will provide a cohesive, co-ordinated collaboration between Sabah’s private sector and Government. This in turn, will accelerate the delivery of benefits from Hajiji’s economic reformation and transformation for all Sabahans.
- The views expressed here are the views of the writer 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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