Part 2 by Tzu Wong
To resuscitate an economy, you need money which I have talked about in Part 1, but we can’t do anything without a proper foundation for economic development. Infrastructures and policies are the premise of a healthy economy, and these two factors will determine if the economic development will prosper or go haywire.
Infrastructures
In all conventional economic wisdom, infrastructure always comes before economic development. Infrastructure investment is a precursor to economic growth and China is the shining example, but not necessarily the model, to emulate. Nonetheless, there will be little disputes on the fact that infrastructure is the foundation of economic development.
In Sabah, we desperately need the following infrastructures to bring Sabah at par with the national economic development. And they are:
A. Pan Borneo Highway: This highway infrastructure has to be completed as soon as possible so that there will be proper road infrastructure for the people to move around and to transport their goods and products more conveniently and effortlessly. The Pan Borneo highway must expand and include the southern corridor from Tawau to Keningau in anticipation of the new Indonesian capital that will be built in Kalimantan. In the future, the said highway can connect to the Pan Kalimantan Highway that is being built at the moment in Kalimantan, Indonesia to tap into the much bigger Indonesian economy.
B. Port facilities: Currently, the port facilities in Sabah are at a deplorable stage and urgently need maintenance and upgrading. Sabah is already incapacitated in its sea logistics, but at the moment, it is further handicapped by the inadequate and failing port facilities that make shipping costs the highest in the country. Therefore investments are urgently needed to allow saving in shipping costs for local exporters to prevent existing businesses from moving away to other states. Repairs and upgrades should include new heavy lifting cranes and new port logistic systems. Additionally, there should be dredging and deepening of smaller ports like Tawau Port to remove silt deposits to expand its jetty space to allow more ships to berth at the same time. This infrastructure is a must if we want sustainable economic development for Sabah.
C. Internet connectivity: Sabah ranks amongst the worst in the country on this infrastructure. If Vevenoah’s story can’t persuade you enough, I don’t know what will. While in KL, some of the household consumers and SMEs are already enjoying Unifi at the speed of up to 800 Mbps connected by fibre-optic cable networks, but many business areas in Sabah are still forced to use the expensive and snail speed Streamyx at 2Kbps connected via copper wire at a cost of RM200+ per month. If this infrastructure is not provided for Sabah in the near future, Sabah will lose out in the internet era, and gaps for her businesses, and her people with the rest of the country and the world, will be widened to the point beyond reach.
D. LNG power plant: The power supply is a major issue in Sabah and it is the main obstacle hindering the economic development in the state, particularly on the east coast. There is, therefore, a need to construct an LNG power plant on the east coast of Sabah in Lahad Datu to provide sufficient electricity for the economic development in this part of the state.
E. Pan Borneo Railway: This is a new infrastructure proposal and one that has always been brought up by politicians whenever an election is present. I would love this infrastructure to be included and built if our finances allow for it.
Policy Framework
There are no policies that are too good and none that are too bad, all policies are made to deal with human behaviours and subjected to amend according to need and circumstances. Sabah, like the rest of Malaysia, has inherited quite a good policy framework in the early days of independence from the British and we have made use of these policies to guide our development during the infancy of our nation. Along the way, we have added new policies to accommodate our needs in the new era and amended quite a few old policies to preserve our traditions to suit the changing of times.
Currently, however, some policies are not accommodating enough which has resulted in stagnation in terms of economic development and social justice. Here are a few policies in Sabah that may require some adjustments to provide some relief for the private sectors and the people:
A. Land policy: Currently non-Sabahan ownership of Sabah agricultural land is at an all-time high and will continue if there no action to regulate this. Call me a hardcore fanatic localist, however you like it, but it is high time that the Sabah state government caps a limit to this land-grabbing by non-Sabahans. Like how the United States of America under the Agricultural Foreign Investment Disclosure Act has done, this act has resulted in six of the American states in the farm belt areas introduced bills banning foreign ownership of their agricultural land. We can emulate this by amending our land policy to require a certain percentage of local ownership in all of our agricultural lands; this will surely boost local participation in the agricultural industry in Sabah and indirectly boost our local economy.
B. TLAS (Timber Legality Assurance System): This regulation is set up based on the recommendations from foreign consultants to monitor and regulate the timber resources in Sabah. The main objective of TLAS is to prevent deforestation through a CoC (Chain of Custody) in the timber industry to comply with international regulations. No doubt this will prevent illegal deforestation, but this regulation is also putting a chock hold on the downstream timber industry making them uncompetitive, unsustainable, and unproductive. Just to name one of the excessive regulatory measures of TLAS; besides the need to comply with all input regulatory requirements on raw materials, forestry officers are required to station at all timber factories. The operational hours of these factories have to follow the government working schedule, which is five working days a week, and any operation on Saturday has to pre-apply with the Forestry Dept for permission and pay to the Forestry Department the overtime allowance for the forestry officer to be stationed at the factory on Saturday. Since the objective of TLAS is to prevent illegal deforestation, the regulatory frameworks can be streamlined and better enforced to focus enforcements only at the upstream segment of the industry. This can easily be done with the help of drones and satellite images rather than to put limits and restrictions on the downstream operators making them inefficient and expensive, and eventually collapse the whole timber industry and affect the economy.
C. Agricultural Policy: Currently, there is no limit on what kind of crops one can farm in their agricultural land and this has caused a run on mono-crop of oil palm only in the past few decades. This is risky and the state government has to regulate this to require all oil palm companies to get permission or licence (with fees, of course) on the planting of oil palm.
Only upon the laying of a proper foundation can we talk about actually building the economy, which will come in the last part of the equation – The Action Plans. – New Malaysia Herald
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