Initiatives to push Sarawak forward

Chief Minister Datuk Patinggi Abang Johari Tun Openg in his winding-up speech at the Sarawak State Legislative Assembly sitting today (13 Nov).

Chief Minister Datuk Patinggi Abang Johari Tun Openg in his winding-up speech at the Sarawak State Legislative Assembly sitting today highlighted and re-emphasised several points, including revenue reengineering, digital transformation initiatives, manufacturing and entrepreneur development, state financing modelling and the state’s involvement in onshore exploration.

And the chief minister has good news for Sarawak civil servants. He announced a special payment of one-and-a-half-month basic salary or a minimum of RM2,000 to be paid by December.

Below is the text of his speech.

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Tuan Speaker,

I have listened carefully to the ongoing debate session and can conclude that in general all members of the House support the Supply (2021) Bill, 2020 in its entirety.

Therefore, I would like to take this opportunity to express my deep appreciation and gratitude to the honorable members who participated in the debate as well as for their support of the Supply Bill (2021) Bill, 2020.  

In my closing speech this time, I will not touch on specific things because I believe my deputies have already explained it in their respective closing speeches.

Instead, I will take this opportunity to explain the main points of Sarawak’s economic recovery strategies in tackling the Covid-19 pandemic crisis and Sarawak’s direction towards achieving developed state status by 2030.

Overcoming economic challenges

Even though Covid-19 has been well contained in Sarawak, the pandemic has significant impact on the global economy.  Sarawak’s economy is no exception.

Therefore, my administration has introduced the 2021 Budget which ensures that economic risks associated with the pandemic is effectively mitigated. At the same time, the 2021 Budget has also highlighted various strategies and programmes to ensure that Sarawak’s economy stands on strong foundation.

In formulating the 2021 Budget, the Sarawak government is aware of the need to exercise prudent financial management. As such, we cannot afford to have expenditure well beyond our revenue, thus a fiscal surplus of RM180 million in this Budget.

Way forward for Sarawak

As the chief minister, I believe Sarawak is on the right track to becoming a high income economy by year 2030. However, to be one, Sarawak must have sufficient talent and good infrastructure, public amenities, good communication and connectivity that can support and attract private investments.  This is why the state government has allocated substantial fund for these purposes.

To achieve economic transformation, the Sarawak government will emphasise revenue diversification.  We also need to move from upstream to high-value downstream activities with improvement in both hard and soft connectivity infrastructures to position Sarawak in the global investment map.

In addition, major upskilling of our human capital will be carried out to improve labour productivity that can translate to higher household income for the rakyat.

Initiatives and projects will also be carried out based on globally recognised environmental practices and policies to ensure that Sarawak’s economic growth will be sustainable.

Finally, all the policies and catalytic initiatives will be driven by digital transformation and innovation across all economic sectors.

Now let me highlight some of the initiatives for us to move forward and recover from this health and economic crisis caused by Covid-19.

Digital transformation initiatives

Since becoming the Chief Minister of Sarawak, my priority has always been to bring about a major paradigm shift in our development strategy by adopting digital technology.

This will be vigorously pursued in the coming 12th Malaysia Plan and beyond. This is the way to move forward to make our economy more competitive globally so that we can have more global prominence.

Successful implementation of these initiatives will boost our economic competitiveness and lay the foundation for Sarawak to become an attractive investment destination for digital related economic activities.

Innovation initiatives

Building an innovative society will not happen overnight as we all know, but we are putting in place key ecosystems and policies that will encourage and promote innovation.

Innovation is required for the economy to respond to the shock of Covid-19 pandemic. Testing technologies are changing quickly; for instance, vaccines are being developed at a rapid rate never seen before. This is how a pandemic can create opportunities despite its negative implications.

In Sarawak, there are many areas of opportunities for innovation. Research and developments particularly in digital technologies and biodiversity could position Sarawak as a testbed and living labs for scientists to develop technologies in a wide range of applications.

With her vast biodiversity resources, Sarawak needs to take care of her flora and fauna and protect the environment. We want to ensure that these resources are used sustainably for research as well as to develop new innovations that will place Sarawak on the world map.

We want to encourage and develop more indigenous products for commercialisation. Only through R&D can we create new forms of products which have potential economic value for commercialisation.

Education and human capital initiatives

In terms of education and human capital, we aspire to ensure that quality education is accessible for all rakyat regardless of who they are or where they are. 

We want to develop knowledge-based society that is globally competitive. By 2030, we want Sarawak to have an agile workforce to drive the state’s vision and excel globally.

We are also serious in addressing the quality of education in our state. As such, Sarawak government will initiate interventions to complement federal government education policies and development to suit our requirements, such as the international schools.

We need to ensure that our workforce have the right skills to match the needs of the industry. This requires integrated planning based on collaboration between institutions of higher learning, the industry and other stakeholders.

Agriculture initiatives

To uplift our agriculture economy and community, few key strategies have been initiated. A major shift from current small-scale and subsistence farming to commercial large-scale farming is required to increase our food production.

Adoption of modern farming technologies and techniques, for example, precision farming, vertical farming, artificial intelligence (AI), Internet of Things (IoT) and Blockchain technology in agriculture will be intensified to achieve higher productivity in selected commodities, crops, fisheries and livestock. New business models are being introduced in the agriculture sector, to move the sector forward

This needs to be supported by appropriate marketing and branding campaigns to create awareness about Sarawak products to the outside world. 

Services sector initiatives

One of our economic recovery strategies is to enhance the efficiency of our services sector such as transport and logistics, tourism-related services, banking and insurance, housing, healthcare and education. This effort is important to support the expansion of our major economic sectors such as agriculture, manufacturing, mining and construction.

Meanwhile on social services, we will emphasise on interventions to assist the vulnerable group. We will provide healthcare support and shelter initiatives for people with disabilities, elderly and the less fortunate.  We will also implement poverty eradication programmes to improve their livelihood.

Infrastructure and utilities initiatives

By 2030, Sarawak aspires to have high quality and environmentally sustainable public infrastructure to drive the state’s socio-economic growth alongside with advancement in digital and green economy.

We aspire to have world class utilities, which are reliable, economical, safe and sustainable throughout the state, to uplift the economic and social wellbeing of Sarawakians. For this purpose, we will focus on water grid system, single water entity and ensuring electricity supply will be able to reach even the remotest part of Sarawak.

Transportation initiatives

In our pursuit to transform Sarawak into a competitive economy, we need to upgrade our transportation sector because this sector plays a pivotal role in making Sarawak as an investment and tourism destination of choice.

Transportation sector which includes our land transport, logistic and port facilities, airports and aviation services as well as our river transportation services will be developed further and integrated with digital technology initiatives.

Renewable energy initiatives

Renewable energy especially through hydropower has always been the key in powering our industries. Realising this, we aspire to continue to achieve more sustainable growth and prosperity for Sarawak through affordable, reliable and renewable energy.

Towards this end, the Sarawak government will provide the regulatory support and promote public-private collaborations in renewable energy value chain in Sarawak, either in hydropower, solar, biomass or hydrogen development.

Sarawak stands to gain economically by utilising environmentally friendly sources of power to develop our industry in the most cost-competitive way while maintaining our pristine environment for our future generations.

Tourism initiatives

Sarawak government will vigorously work towards increasing tourist arrivals into Sarawak by improving accessibility and connectivity. We will explore the provision of incentives to commercial airlines to expand their route offerings to Sarawak to enhance Sarawak connectivity to the rest of the world.

We will also forge strategic collaboration and joint marketing efforts with other regions to create synergy in promoting Sarawak as a tourist destination. We will pursue this initiative once international air travel resumes.

Forestry initiatives

We expect the forestry sector to generate new revenue streams from forest resources from payment for ecosystem services, such as carbon offset projects that will bring benefits to our rural communities, as well as protecting our ecosystems and restoring our forests.

We will continue to generate and sustain economic returns from our forest produce by promoting more value-added timber manufacturing processing activities.

Manufacturing and entrepreneur development

High-value manufacturing industries will be given high priority to propel the recovery of Sarawak economy. These industries will bring higher productivity to the economy and generate high income employment for the rakyat.

The government will continue to develop Sarawak’s entrepreneur capacity and capability in key areas to increase productivity and competitiveness to support major industries as well as meeting international standards to penetrate the global markets.

Mining initiatives

To ensure more rigorous mining activities, we need to create the right ecosystem to drive exploration and attract quality investments in the mining industry.

First of all, we will strengthen our mining policy and regulatory framework. This includes the strengthening of State Minerals Management Authority and relevant agencies involved in the mining sector.

Mining sector would require comprehensive minerals data and mapping. Hence, we will invest in this mapping process by developing geological mapping for all onshore and offshore minerals.

We will design business models to intensify downstream activities with private sector participation, especially attracting global giants as anchor companies to spur more business activities.

The 2021 Budget is designed to create the investment environment and ecosystem for private sector to invest and crafted to suit a new economic development model. Essentially, this is the development strategy of Sarawak government for a better Sarawak in the future.

The honourable member for Kota Sentosa has criticised and alleged that the Sarawak government has been spending extravagantly. At the same time, he demanded that the Sarawak government spend an extra RM1 billion to the proposed 2021 Budget.

I am inclined to believe that the honourable member for Kota Sentosa is confused on what he actually wants. He is blowing hot and cold about his request. Does he want the Sarawak government to increase spending or reduce spending? I am perplexed at the conflicting statements of the honourable member for Kota Sentosa. This clearly shows that his intention is merely to criticise the Sarawak government. 

State financing modelling

Sarawak is able to achieve fiscal sustainability as our economy develops because we adopted a multi-pronged approach in our budget exercise. We have other sources of revenue on stream, which will ensure a healthy and well-functioning economy.

The broadening of the State’s present revenue base has strengthened our financial capacity and supported the State in meeting its objective to achieve healthy financial position.

Syukur Alhamdullillah, our alternative financing initiative with the establishment of our own development bank, Development Bank of Sarawak (DBoS) has proven to be a sustainable platform to facilitate and expedite the realisation of the State development agenda.

This innovative financing model will ultimately provide the growth impetus to achieve the status of high income and developed state by the year 2030.

Sarawak is indeed fortunate to have established our very own DBoS in 2017 to meet the competing demands for our financial resources. Without this innovative model, Sarawak would not be able to develop its physical infrastructure and amenities at the scale we are doing now.

Digital banking

Like it or not, our economy today works across powerful networks, changing how people consume, work and communicate. The landscape of our way in doing business is indeed changing. Sales are increasingly taking place online and over digital platforms, rather than from physical shops. Intangible capital is now getting more important than physical capital. As we have heard and read, data is the new oil.

Also, like it or not, we are at a time where anyone can produce anything anywhere through 3-D printing, where anyone can broadcast their talent globally via YouTube or buy products from China whatever they want via Ali Baba.Com or other platforms.

In this pandemic crisis, hyper-connected, capital-light world, I see the future belongs to small medium enterprises (SMEs) firms utilising digital platforms, which may come from our rural Pulau Bruit or Ulu Paku or Lusong Laku or Long Seridan; you never know, thus, giving future technopreneurs direct stakes in local and global markets.

I see that the financial impacts of these economic development are going to be huge. In anticipation, my Cabinet colleagues and I in the GPS government is already preparing this new banking infrastructure that the new and young generation of Sarawakians will require.

For the information of this august House, Sarawak government have submitted our expression of interest to Bank Negara Malaysia for a digital banking license to serve the underserved.

Of course, we are fully aware that an effective digital banking must be resilient, fair and dynamic.  It is among the prerequisites for Sarawak government to collaborate with reputable technology companies and local retail banks approved by the governing bodies.

Accordingly, Sarawak government is in the midst of putting up the necessary telecommunication infrastructure and facilities throughout Sarawak in part to support our Digital Banking and other digital initiatives.

Sovereign wealth fund

I welcome the suggestions made by some of the honourable members including in the last DUN Sitting for the State government to establish a sovereign wealth fund by investing on surplus revenue as a buffer in time of financial crisis, as well as for the benefits of our current and future generations.

Such fund could also help the State to address the issue of high volatility of resource prices, unpredictability of extraction, and exhaustibility of natural resources.

Before we set up this fund, the government will undertake a thorough feasibility study for its establishment. This is to ensure that we have proper governance framework and implementation mechanism to mitigate any major risks associated with the operation of

The study will also ensure that all key aspects of the fund set up such as financial, legal and operational perspectives are taken into consideration.

Revenue reengineering

Sarawak government will continue to implement the revenue reengineering initiative towards enhancing and expanding Sarawak revenue stream. This effort is even more crucial given the current global economic slowdown where our state is dependent on export of commodity-based resources.

Therefore, my administration will explore other revenue resources including potential investments in strategic industries that would generate future dividends for the State.

The recent issuance of two Oil Mining Leases for onshore fields to Petros under the Oil Mining Ordinance 1958 is also one of these key measures towards generating future revenue for the state.

Hydrogen economy initiatives

The GPS government has taken bold steps to promote clean energy industry by exploring the hydrogen economy, diversifying from traditional energy sources. Honourable members may note that, the federal government in their 2021 Budget have acknowledged and supported Sarawak’s foresight on the development of hydrogen economy in Malaysia.

Earlier this month, SEDC, Sumitomo Corporation and ENEOS (a subsidiary company of Nippon Oil) made a bold decision to invest with a strong commitment to explore mega hydrogen production in Bintulu and to achieve export potential.

Earlier this week I witnessed the signing of MoU on Green Hydrogen Commercial Exploration between Sarawak Energy Berhad and Petronas. The Sarawak government will provide support for all these initiatives by the private sectors.

These developments signify the conviction of private sectors on the immense potential of hydrogen production in Sarawak. I can also sense the confidence of international investors to turn crisis into opportunities, in pioneering the development of green hydrogen in this region.

The investment will contribute not only to localise production of alternative energy, but also reinvigorating the local economy and creating job opportunities, having the effect of killing three birds with one stone.

Sarawak oil and gas overall policy

The Sarawak government is committed to create a stable and attractive environment for companies, both local and from overseas, to invest in the oil and gas industry in the State.

Our state laws such as the Oil Mining Ordinance 1958 (OMO 1958) ensures the protection of the interest and investments of companies undertaking oil exploration and mining in Sarawak, so that the industry can grow sustainably in a well-regulated and business friendly environment.

Since 1970s, the focus of oil mining in Sarawak has been in the offshore areas of the State where significant reserves of oil and natural gas has been discovered and currently being produced.

Although there have been significant exploration efforts since 1980s by various international oil and gas companies onshore, the results have been very modest.

However, through a focused approach including the application of new technologies, we remain hopeful that we would be able to discover commercial reserves onshore, which will augur well for the State’s economic development. 

Sarawak’s involvement onshore exploration

In the winding up speech by my honorable Deputy Chief Minister, he mentioned about Sarawak’s involvement in onshore exploration. Nonetheless, I would like to reiterate what he has mentioned as this is very important for the state.

The enforcement of OMO 1958 is a test of Sarawak government’s efforts to exercise our constitutional rights to regulate oil mining and to take complete control over the exploration and production of petroleum within the territorial boundaries of Sarawak including that in the onshore areas.

This commitment is exemplified by the issuance of Mining Leases to Petros in respect of two blocks, one in the Adong Kechil West in Miri area, and the other in the Engkabang Area South of Marudi.

With this arrangement, the Sarawak government, through Petros, will have the control of, and legal title to, all oil and natural gas produced from the onshore areas.  petros will also have the rights to appoint contractors, or enter into ventures with investors to explore and produce the oil and gas from the onshore areas in Sarawak.

By enforcing our constitutional authority over the distribution of gas through Distribution of Gas Ordinance, 2016, the Sarawak government will further strengthen the role of Petros in spearheading the state’s involvement in the oil and gas industry especially in the downstream sectors. With these rights, we are able to secure natural gas supplies needed to pursue the State’s socio-economic development agenda. 

These initiatives will ensure greater opportunities for Sarawakians and Sarawak companies to participate and invest in the oil and gas industry as well as acquire expertise, knowledge and technology to develop oil and gas industry in the State.

Projek Rakyat Sarawak

The State government under GPS implements development according to the mould of Sarawak, for the sake of the people of Sarawak. We see the People’s Project, especially rural development projects, as a very important endeavor and a trust that we need to fulfill to the people.

I am very happy because the impact of the implementation of the People’s Project has begun to be enjoyed by all walks of life in Sarawak. Areas that used to face critical water problems have now had clean and treated water supply.

Villages and longhouses have also enjoyed electricity supply. Isolated areas have also been successfully connected to billions of ringgit worth of roads and bridges.

Social safety net

The honourable member for Kota Sentosa has raised his concern on the poverty rate in Sarawak. I wish to inform this august House, our poverty eradication programmes have proven to be effective.  Data from Department of Statistics Malaysia shows that based on Poverty Line Income (PLI) 2004 of RM765, poverty rate in Sarawak has been reduced from 21.0 percent in 1989 to 6.7 percent in 1999. 

Even if we use the latest PLI of RM2,131 in 2019 for Sarawak, the poverty rate has also shown a drop from 11.9 percent in 2016 to 9.0 percent in 2019. 

I acknowledge that more need to be done to help this vulnerable group. For this reason, we will intensify our intervention by bringing them into mainstream of development through physical connectivity, improve their skills and create more income generation activities.

Furthermore, in 2021 Budget, my administration will also give special attention to implement social safety net programmes. Substantial amount has been allocated to implement these programmes covering a whole spectrum of our society in particular the less privileged. This will help to cushion the impact of Covid-19 pandemic on the vulnerable groups in our society.

These safety net initiatives, including micro-business development programmes, will help to replace loss of income for poor households and enterprising individuals. It will also help to counter the economic drag of the pandemic by providing a financial stimulus that would generate multiplier effects during recovery period.

This is what a caring government does, protecting those most in need, and giving them a helping hand to recover from the crisis.

Appeal for financial assistance under BKSS

The GPS government has paid a total of almost RM800 million to 397,000 households and 392,000 single B40 individuals eligible for BKSS B40. This assistance has alleviated their financial burden in the face of adversity from the Covid-19 pandemic.

The GPS government, which is concerned about the people’s problems, has opened the door to those who have dropped out of this aid to appeal. Based on the appeals received on the closing date of May 31 2020, a total of about 82,000 household heads and 40,000 single B40 individuals have met the set criteria and are eligible for this assistance.

Therefore, I am pleased to announce a special payment of RM250 per month for a period of six months to 82,000 B40 household heads who have been successful in the appeal. Partial payments will be made this year and the rest next year.

Meanwhile, 40,000 B40 single individuals who succeeded in the appeal will be paid a one-off RM500. Payment will be made in December 2020.

Through this approval, in total, the Sarawak GPS government will spend a total of RM943 million of which RM800 million has been paid through the IRB list while RM143 million will be paid to 82,000 household heads and 40,000 B40 single individuals who have dropped out but are eligible for this assistance. This means that under BKSS the GPS government pays a total of RM943 million to 479,000 household heads and 432,000 B40 single individuals, That is 921,000 Sarawakians, the highest aid among the states and the second largest after Prihatin Nasional.

Sarawak civil service

My administration recognised the support and contribution of the Sarawak civil service under the leadership of the honourable State Secretary in implementing our policies, delivering development programmes and projects as well as public service to the rakyat. Many business processes and procedures have been simplified for the benefit of the rakyat.

I am happy to note that our Sarawak civil service has been instrumental in ensuring that most projects are well implemented and executed in a timely manner, especially people centric projects such as Projek Rakyat and Rural Transformation Projects (RTP). This shows that the Sarawak civil service is able to rise to the occasion to meet the ever-increasing expectation of the people, even in challenging times as this year.

During the Covid-19 pandemic, members of the Sarawak civil service and the federal civil service including doctors, nurses, health workers, uniformed bodies, Immigration and other frontline personnel have also worked tirelessly to protect our rakyat. Syukur Alhamdulillah, the Covid-19 pandemic has been well contained to a manageable level.

In doing so they have risked their own safety and sacrificed their comfort. There also countless other members of the civil service who are working behind the scene, away from the glare of publicity, but working diligently in their respective work places. To all of them, I say THANK YOU.

Thus, the GPS government greatly appreciates the contribution, sacrifice and commitment of the Sarawak civil service officers and federal public service officers in performing their duties and responsibilities professionally in this challenging situation.

Therefore, the GPS government has decided to give a special incentive payment equivalent to one and a half months (one and a half months) basic salary or a minimum of RM2,000 to Sarawak Public Service officers, and will be paid before the end of this year.

Also not to be missed is the welfare of federal public service officers who have contributed their services in Sarawak. These Federal Public Service officers will be paid a one-off incentive of RM500 in the first quarter of 2021.

Solid support of the people

The 2021 Budget that I have presented is a roadmap to a future that embodies Sarawakians’ values and aspirations:  opportunities for all; a rising standard of living; and a sustainable, peaceful Sarawak.

This future is within our reach. But just as it took the collective efforts of all Sarawakians to rise and build an even stronger economy, it would also need all of us to work together to meet the challenges that lie ahead. It will not be easy.

But I strongly believe as a united and hardworking Sarawakians, I am very optimistic about Sarawak’s future than I am today.

I know that when we are united in the face of challenges, we will emerge stronger and better than before. I know that when we work together, there are no limits to what we can achieve. Together, we will move forward to innovate, to create opportunities, and to make Sarawak stronger than ever before.

The government is cognisant that the implementation of the economic plan cannot be successfully delivered by the Government alone. Therefore, I call on the private sector to play their part in ensuring our 10-year plan towards Sarawak as a developed State by 2030 is successful.

At the same time, I like to call on the rakyat to remain steadfast, brave and diligent in prevailing over the current economic challenges and emerge even stronger after this episode.

Insya-ALLAH, with the cooperation, persistent effort and solid support of all, our beloved Sarawak will become a prosperous and developed State by 2030.

Conclusion

Finally, I take this opportunity to thank Datuk Amar Speaker who has conducted the DUN sitting in an orderly and excellent manner.

Thanks also to all the government officials and staff of the House who have carried out their duties with patience and excellence.

I would also like to take this opportunity to wish a Happy Deepavali and a Merry Christmas to all Sarawakians who will be celebrating it.

We will continue to give priority to Sarawak. Together we take care of Sarawak, Intu Sarawak.

I beg to move.

Thank you.