BY TANIA LAM & NUR ASHIKIN LOUIS
KUCHING: Sarawak is on track to achieving its goal of becoming a high income and developed state by 2030 despite facing the ongoing Covid-19 pandemic.
Chief Minister Datuk Patinggi Abang Johari Tun Openg is confident Sarawak will be able to overcome the Covid-19 crisis despite a hike in the number of cases recently in Kuching City.
He added that the state government had introduced various forms of government aid such as the Sarawakku Sayang Special Aid (BKSS) packages to cushion the impact of Covid-19 on Sarawakians.
He also hoped that the vaccine for Covid-19 would be available by the third quarter or end of next year, adding that the vaccine would definitely boost the state’s economic recovery.
Following is part of the chief minister’s live telecast interview with host Fadzril Hisyam Afandy of TV1’s Bicara Naratif programme recently.
Question: Kuching is now a red zone. This led Sarawak to implement the conditional movement control order (CMCO) in the district from Nov 9 to 22. What is the rationale behind this step?
Abang Johari: In the last two weeks, the number of Covid-19 cases in Kuching district surged to two digits with the emergence of several new clusters such as Baki Cluster and Greenhill Cluster. This has pushed us to take stringent measures to contain the spread of the virus in Kuching City.
If we did not impose the movement restriction, the cases will spread to other districts. This has already been proven when Miri recorded new cases and upon investigation, the cases were linked to the Greenhill Cluster. That is why the Sarawak Disaster Management Committee (SDMC) led by Deputy Chief Minister Datuk Amar Douglas Uggah Embas came up with the CMCO measure.
There has been some improvement in the last three days; only two new cases were reported last Sunday and four cases on Monday. One single digit. If this continues, we will be able to flatten the curve of Covid-19.
With the state facing the third wave of Covid-19, many people and sectors were affected. Following this, the state government introduced the Sarawakku Sayang Special Aid (BKSS) packages. How can these aid packages cushion the impact of the pandemic on the affected groups?
We have provided assistance through BKSS 1.0, BKSS 2.0, BKSS 3.0 and BKSS 4.0. Among them were the cash incentives and the list of recipients depended on the list given by the Inland Revenue Board (IRB). However, it seemed like there were a lot of people who were not listed so we decided that they could appeal (for the BKSS). InsyaAllah, after we review the updated list, I will decide this Friday (Nov 13) whether they will receive the cash assistance or not. I was informed that there were about 100,000 names which were not listed.
We also provided discounts in terms of rental, electricity and water supply. In general, we have spent about RM1.2 million. We also bear the bank loan interests, meaning that we provide moratorium for the people and they do not have to pay back the bank until a certain period. The state government is paying for them. Including such assistance. We have spent about RM2.3 billion so far.
The RM322.5 billion allocated to the 2021 national budget is the biggest in history. Of the total, Sarawak receives RM4.5 billion. How can this budget help the people in terms of economic resilience and survival?
On behalf of the Sarawak government, I wish to thank the federal government for allocating RM4.5 billion to the state’s infrastructure development. The budget will have positive effects on the state such as mobile banking. The budget also provides some expenditure for native customary right (NCR) land perimeter survey.
But the budget allocation was inadequate. However, we should also look at the federal government’s dependents. Sarawakians will normally be grateful for what is given to them. On our part, the state government will try to fill in the gap.
What is the core and the main pillar of the 2021 state budget?
There are two cores.The first one is for us to provide assistance to the people affected by Covid-19 while the second one is for us to formulate post Covid-19 policies because the approach is not the same as before. It has new norms as well as changes in our economic development.
On the first core, I have presented a budget where we have an income of about RM10.012 billion available for the state. And from that angle, we have provided an expenditure of RM9.8 billion. Thus, we have a surplus of about RM180 million. Of this expenditure, 38 percent or about RM3 billion is for operations and RM6.2 billion for development. In this operating sector, it also includes the assistance we provide directly to the communities affected by Covid-19. In terms of development, we provide a lot of social assistance to those affected, for example, those who live/work in the cities have to pay for accommodation or rent. So to those under B40, we give RM200 per month for 36 months to help them pay the rent. This will be based on the eligibility figures. Those who can get this help are 20,000 people in the urban areas and those who rent.
Secondly, for the small and medium-sized enterprises, we extend our assistance and we add micro credit. We will distribute RM50 million to those who may be affected in terms of businesses and in need of financial assistance. We also provide equipment to women to kick start their businesses.
I believe the time has come for us to look at long-term strategies to move our economy further after Covid-19. This is based on two thrusts — digital economy and environmental sustainability. We are moving towards improving our digital infrastructure – telecommunication towers and Internet providers. We have taken into account local companies such as Sacofa Sdn Bhd and Danawa Resources Sdn Bhd which are responsible for installing the signals and the cost will be funded by the state government.
The federal government is also embarking on digitalisation. I hope the Malaysian Communications and Multimedia Commission (MCMC) can cooperate with Sarawak Multimedia Authority (SMA) to increase digital connectivity. From that angle, we can further drive e-commerce.
I introduced the digital economy back in 2017. Many people were sceptical of the strategy but when Covid-19 hit, we eventually shifted to digitalisation. People have started to use digital applications to order food/goods.
We will also encourage precision farming in agriculture to increase our SMEs’ income. I am also quite excited because we now have Sarawak Trade and Tourism Office in Singapore (Statos) and it seems that Singapore has started importing talapia fish from the state. It also imports other local products such as silver patin (silver catfish) and midin (wild ferns).
The development of the digital economy helps entrepreneurs and farmers at all levels, but in terms of the assistance, we provide social safety net.
As Sarawak progresses to provide social safety net in the state, how will the development of the digital economy assist the entrepreneurs and farmers at every level without depending too much on assistance from the government?
The state government has formulated some policies to help the economy gradually pick up after Covid-19. We have made available a sum of RM29 million to assist fishermen in cushioning the impact of inactivities during the rainy seasons.
We have also decided to extend the assistance to farmers in Sarawak involved in the cultivation of oil palm and pepper on a small-scale. We understand that their livelihood has been adversely affected in recent months due to price fluctuations compounded by the rising cost of fertilizers and agro-chemicals as these commodities are their major sources of income. A sum of RM60 million has been provided and is expected to benefit 75,000 farmers.
Precision farming revolves around ‘Internet of Things’ because this is our step towards establishing an agropark. We have one agropark in Semenggok which is similar to the one in Rampangi and we will continue to develop more agroparks in other locations throughout the state including Sarikei. This is our new venture because our agricultural entrepreneurs can be placed in the agroparks which will be equipped with advanced technologies. Precision farming will become one of the ways to increase our food production and improve our food security. We will be able to export our products. We already have an office in Singapore. Two more will be established — in Pontianak, Kalimantan and Brunei Darussalam.
In terms of manufacturing, we will focus on SMEs; the state government will provide assistance and training.
The facilities and infrastructure have been provided but continuous training is also needed to upskill and reskill the people. What are the steps taken by the state government to ensure that people are given sufficient training?
Yes, we have established several training institutions such as under SMA. We have Centexs and we work together with the private sector on upskilling or reskilling, especially in terms of technology. It is important for us to master this technology.We are collaborating with big companies including Huawei for us to train our children in the latest technology, including other aspects like cybersecurity, Internet of Things and how we can interact through robotics and automation.
Now we are heading towards the hydrogen economy, and there is already interest from Japan, especially ENEOS owned by Nippon Oil and Sumitomo which want to produce water-based hydrogen. Through hydrogen technology, we can get carbon credit and the world will see that we are very serious in climate change and becoming environmentally friendly.
We also want our timber industry to be sustainable and we focus on reforestation. We work with institutions of higher learning including Universiti Putra Malaysia (UPM) to do research and development so that our industry can be based on renewable materials. This is our approach for the long-term.
Why does Sarawak choose Estonia as a model country to develop the state?
Estonia is a small country; in terms of its land area, it is small. In terms of population, it is similar to ours. But it has a big influence on Europe’s market. Estonia used to be an Eastern state and was once under the communist rule, but after independence, it became the country with the best technology. If such a country with a small size and population can apply technology in its economy, why can’t Sarawak?
In terms of digital economy, some people were sceptical initially while others welcomed the initiative. What are the initiatives to ensure everyone benefits from this digital economy policy?
We are upgrading our digital infrastructure, especially speed. We now have places with 4G, but in the rural areas, sometimes 2G is not even achieved. This is certainly a significant challenge and I have decided two years ago to give an allocation of RM1 billion to upgrade our internet speed. This has been implemented in stages. Our target is 5G – real-time. Because of that, we are now collaborating with telco providers to develop our Internet speed.
The installation of Very Small Aperture Terminal (VSAT) stations at selected areas across the state is in progress.The state government has also allocated more than RM2 billion within these two years for us to supply energy throughout our state through the Sarawak Alternative Rural Electrification Scheme (SARES) using solar power. We equip longhouses with SARES. By 2022, we hope all rural areas will have 24-hour electricity supply.
The state government has also allocated RM4.2 billion to upgrade the water supply coverage. Apart from that, we are developing the state’s infrastructure such as coastal roads and bridges.
All these four elements – water, electricity, roads and internet — show that the state government’s policy is inclusive. We hope all these projects will be completed by 2025. With that, incomes will increase because of economic activities as well as tourism and other sectors. In 2030, the incomes of the rural folk will increase and that is one of our targets as a developed state – you must have high income.
You recently mentioned that eight percent gross domestic product (GDP) growth is needed for the state to achieve a high income and developed status. Considering the challenges posed by the Covid-19 pandemic, are we still on the right track?
Yes, we have taken several assumptions into account. Firstly, I expect a Covid-19 vaccine will be available by the third quarter or end of next year. If we have the vaccine, we will be able to go back to normal.
The state’s GDP currently is about RM133 billion to RM140 billion. In order for us to achieve a developed status, our GDP must be between RM250 billion and RM300 billion. This means our GDP growth must be roughly about eight percent. The public sector requires an investment of about RM70 billion and RM100 billion within 10 years. If our income now is about RM10 billion, this means within 10 years, we can spend about RM100 billion for public investments.
In terms of private investments, we want more foreign investments or foreign direct investment (FDI). So far, there’s a suggestion from the private sector on developing methanol production, petrochemical hub, and even an investment in veneer steel by a Japanese electronics giant Taiyo Yuden in Sama Jaya with a projected amount of RM5 billion. If we have foreign investments and can contribute to the GDP growth of about RM70 billion to RM100 million, that means we will be able to achieve eight percent GDP growth within 10 years, hence achieving a high income and developed status.
One of the matters that we take into account is that if the economy is too strong, it can lead to ‘overheating’. Let’s say we are able to achieve more than eight percent, then we have to use our ‘gears’ and limit the growth speed. From here, we may have to reduce our public investments so that we remain at eight percent GDP growth.
Another challenge is the state’s workforce capacity. This is where digitalisation comes in and where we utilise automation in our production process.
How will Development Bank of Sarawak (DBOS) help to create efficient cash flow and handle development projects?
When I first took over from the late chief minister Pehin Sri Adenan Satem, I had a vision on how to speed up the state’s development. Of course, if we want to speed up our development, we require large funding.
I did some research and based on history, after World War 2, many countries started their own development banks. In our region, it was the Asia Development Bank. In Europe, it was the International Monetary Fund (IMF). These banks are sources of funding which can help in driving the economy.
That is why I established DBOS with the approval of the Central Bank of Malaysia (BNM). In terms of banking, if you have a capital of 10 percent, you can lend out the balance. DBOS will be able to generate funding for us to implement government strategic projects. In short, we established a government bank which will fund government projects. It will not affect the state’s reserves. That is why we have alternative funding and it only focuses on government projects. It is not available for private projects because of the high risks. Government projects are not risky because if we borrow for 10 years, we will pay every year through our own funding, so the cash flow will always be there. That is why you can see that the state government can develop projects such as water supply, electricity, bridges, etc, using our own money.
With the tabling of the 2021 State Budget and as the state moves forward in facing Covid-19, what is your message to the people?
I feel like what’s important is the state’s stability in terms of politics, unity and cooperation among the people. The people will see whether the investment is safe or not in a state. Alhamdulillah, we now have such an environment. This also has led giant company Shell to relocate back to Miri as its regional headquarters in oil and gas industry. It is just like the saying ‘sirih pulang ke gagang’ (back to where one started). Thus, I hope Sarawakians will unite for the better future of the state and our next generation.
