“The mixing of politics and business not only is detrimental to politics, as is frequently observed, but even much more so to business”
– Ludwig von Mises, (1881-1973) Austrian school of economist.
Alright, folk! Let’s hit the rewind button. You may remember from my last piece that I found myself at an investment forum in Singapore. Well, let’s be honest, it was not exactly the Olympics of excitement, but hey, we don’t always get to pick our battles, do we?
The story begins in the middle of a day that was going as usual for us. We were nerding out over the latest economic trends, but soon it was time for lunch. Just as we were about to dive into some mouth-watering chicken rice, a few of my colleagues fired off a question about the Sarawak government’s fancy new plans. I mean, how often do you get to critique a state government’s financial sorcery while munching on chicken rice? Let me illustrate this for you.
Sarawak’s plan was a three-act drama that could give any Hollywood movie a run for its money. Act one, they wanted to buy a chunk of the ownership pie in a bank. Act two, they aimed to take over a port, specifically Bintulu Port. Finally, they wanted to build a casino to turn the Borneo Highlands into a mini Las Vegas. It was as surprising as watching a magician pull a rabbit, then a dove, and finally, a roaring lion out of a hat!
Sarawak had been looking for opportunities in finance like a hawk circling its prey. Affin Bank, one of Malaysia’s banks, was going through some tough times. It seemed like the perfect chance for the state government to swoop in. It could be a new beginning for both the bank and Sarawak, despite unsuccessful bids for a digital banking licence previously.
You see, digital banks are typically the new kids on the block, minus the brick-and-mortar presence that often conveys a sense of reliability. They’re usually in the red during their formative years. According to a tracking study by the Boston Consulting Group’s Fintech Control Tower, fewer than 5 percent of the over 250 digital banks worldwide are currently in the black.
Whispers started making rounds that Sarawak might want more than just a certain percentage of Affin Bank, while I have detailed figures on this; unfortunately, I can’t reveal any specifics here due to certain permissions I lack. But the bank wasn’t their only target. They also had their sights set on Bintulu Port, ready to play their cards strategically to strengthen their economic grasp.
But here’s where I got confused: ports usually fall under the jurisdiction of the federal government. So it left me scratching my head — why would the federal government make a unique exception for Bintulu Port by transferring it to the state? But the idea of a casino was the joker in the deck. It seemed to have been hatched during Raya break, maybe after enjoying too many traditional festive treats. However, getting a casino licence is not simply popping down to the store for a loaf of bread. It’s a complex process, like navigating a maze filled with twists and turns.
In Malaysia, politics is heavily influenced by parties that follow Islamic principles. They command a strong following among the Malays, the majority ethnic group. In other words, Sarawak might find it a near-impossible task to get Prime Minister Datuk Seri Anwar Ibrahim to give the thumbs up to its casino dream.
And guess what? The Sarawak-casino drama isn’t a new episode in the Malaysian soap opera. The plot was first aired when Tun Mahathir Mohamad was the Prime Minister, but the idea ended up getting shelved. Perhaps it was too ahead of its time, or maybe the stars just didn’t align right. Who knows?
The party in power in Sarawak, Gabungan Parti Sarawak (GPS), holds a significant number of seats in parliament. This means Anwar needs to play a strategic game of chess with them, especially with rumours of political instability. In case the casino topic is discussed in parliament, Anwar will likely need to dodge it like a pro in a dodgeball game.
Interestingly, the GPS bigwigs had maintained radio silence on the casino idea. It was the Minister of Tourism, Creative Industry, and Performing Arts, Datuk Seri Abdul Karim Rahman Hamzah, who floated the idea of the casino, seeing it as a potential golden egg-laying goose of tax revenue. As predictable as day follows night, he faced opposition from the Islamic party, PAS. But Abdul Karim stood his ground. He argued that Sarawak was home to everyone, not just Muslims. He questioned why a casino couldn’t be allowed in the state when gambling outlets were.
But as I said, scoring a casino licence isn’t that simple. It demands a rock-solid business plan, investors with pockets as deep as a magician’s hat, and careful planning to prevent it from turning into a societal Pandora’s Box. You can’t merely slap a ‘Casino’ sign on a random building in the Borneo Highlands and expect the cash to start raining down.
Consider the casinos in Singapore, for instance. Their construction bill reached a jaw-dropping SGD6 billion. That’s not the kind of money you find lying around. It’s a risky gamble, only possible for institutions with deep pockets unless, of course, the state decides to play fairy godmother as it often does.
Singapore’s casinos are more than just places to gamble. They’re all about family entertainment and conventions. Starting a similar project today would cost an arm and a leg, and recouping that investment would be a marathon, not a sprint.
Talk about a dog-eat-dog world! Nearly every nation in the region, except Indonesia and Thailand, has jumped onto the casino bandwagon. Even cruise ships are offering casino facilities along with family-friendly entertainment.
And so, there I was, witnessing Sarawak’s economic plans unfolding like a daytime soap opera. It had all the ingredients — ambition, audacity and a hint of humour. As for me, I was just a spectator, done with my chicken rice, waiting for the next twist in this head-spinning drama.
The views expressed here are those of the writer and do not necessarily represent the views of the New Sarawak Tribune.
