Saturday 18 November 2017

Abang Jo's winding up speech: He talks about Malaysia Ageement, Sarawak's rights and interests, Petros, DBoS and LRT



Winding Up Speech by Chief Minister Datuk Patinggi  Abang Johari Openg at State Assembly sitting on November 17, 2017.

6.            I am happy once again to speak to all the Honourable Members of this August House in my capacity as Chief Minister. As you know, I feel this as a great honour and a big responsibility as Chief Minister and I intend to take this job seriously and serve the people by ensuring greater prosperity in our home land Sarawak in the coming few years.

Chief Minister Datuk Patinggi Abang Johari Openg
Economic Strategy
7.            Sarawak is privileged to be endowed with an abundance of natural resources whose exports we have been dependent on as our main economic driver for many years. This has brought about rapid growth of our small economy. We have seen the rapid expansion of the urban centres as well as continuous growth in rural area and the improvement in the lives of our people.

8.            In the last 36 years from 1980 to 2016, our output in current prices rose by 9.2% per annum on average, while our population rose by only 2.2% per annum on average – which means that we have been experiencing an improvement in incomes per person by about 7% per annum.
This means that those living in Sarawak have been doing well as we all have been enjoying an improvement in our living standard. However, in the last few years, the currency has weakened and therefore our incomes in foreign currency terms have suffered also.
It affects us when we are buying foreign goods but not when we buy locally produced products. We in Sarawak therefore have to work harder and produce more local goods and services so that we can enjoy an even better standard of living.

9.            We have to work harder in using our skills and knowledge and make use of new technologies to create good jobs in Sarawak for our talented young men and women and good business opportunities to be made available for those who are keen to become entrepreneurs and businessmen. We want talent to find Sarawak an exciting place to live and work and play, so that we are building our new societies based on knowledge, skills, technology and capital.

Open Market
10.          The best way for our economy to create new opportunities is by encouraging competition in an open market. In the past when the local market was small and there was only room for one or two players, the most appropriate strategy was to encourage the growth of home players and to some extent protected against foreign competition. As the economy has grown by 23 times in the last 36 years in nominal GDP terms, I think the economy has grown big enough for competition to be encouraged in order to lower the cost of doing business and to lower domestic prices. By competition, I mean that we should not let one company to dominate in one or more sectors and that there should be at least two or three companies to compete in each sector. With competition, I hope to see consumers being given better deals by suppliers.

Open Economy
11.          Sarawak has always been an open economy because we are always encouraging imports and exports. But the economy can be made even more open in the sense that we should allow, in addition to competition among local companies, we should also allow foreign companies to come into Sarawak especially in areas where we are technologically deficient and we can ask these foreign companies to employ local people and transfer technical skills to our people. Even in this area, we have been open especially in Samajaya and Samalaju. Now that we are developing our hydropower supply, we shall continue to attract major companies to come to Sarawak and help us build our industrial economic base. There are great opportunities in this area especially with the interests being shown by Japan, South Korea and China.

Tuan Speaker,
Digital Economy
12.          Technology comes to us in all shapes and sizes and the latest we have to deal with is the digital technology. I have been talking a lot about the digital technology lately because I am passionate about it and because I think this is one of the best ways for us to be a developed state with high income for Sarawakians.
My purpose in focusing on the Digital Economy is ultimately to create good jobs for our young people and to increase economic opportunities for entrepreneurs and businesses. I think this is a point worth emphasising all the time. I am not showing that I am tech-savvy as alleged by Ahli from Pelawan but there is no other option for us but to move forward. I know Thailand, Indonesia and Vietnam have opted for this route. If we are not bold we will be left behind and possibly swallowed by technology and ICT applications of our neighbours.

13.          In the last 8 months since the first IDECS – the International Conference on Digital Economy Sarawak in April this year – many things have happened and I am happy to say that we are making good progress concerning the development of the Digital Economy.

14.          We now know that building the Digital Economy is about creating a new and better and more efficient way of living for the people of Sarawak. By saving time and money, the people of Sarawak can live in an efficient society. I think we can all agree on this.

15.          I am glad to know, from their responses, that even the Honourable Members from the opposite side of this August House are also in agreement with this notion of using the digital technology for greater efficiency and modernising our lives in Sarawak and creating new economic opportunities for everyone.

For this, I say – thank you. While what they say may sometimes sound like criticisms of Digital Economy Sarawak, in fact they are not criticism but sincere wish to be reassured that all will be well with our Digital Economy Sarawak because they do not know enough of the subject matter!

In order to give them the reassurance and also for the benefit of other Honourable Members of this August House who are on my side, allow me to elaborate on this important subject – even at the risk of me repeating myself many times over. I shall happily take that risk in the interest of clarity.
Digital Government

16.          The Digital Government is built around the concept of the digital identity of each citizen and how the personal information associated with that citizen is captured in digital form, stored in digital form and retrievable in digital form. The digital personal information may be stored in different computers servers by different government departments which collect and process them. The Digital Government is a digital platform of service built by the government where all the digital personal information of a citizen can be retrieved by the individual for the purpose of ensuring that the information is correct and in secured environment with tightly coupled audit trails for each personal data and transaction, all transactions with the government is up to date, and where the citizen can also ask for service from the government with the touch of a button from integrated platform and it covering the whole life cycle events of every rakyat from birth to death. For the purpose, we are developing a common platform of IDs and we might called it Sarawak ID.

Cyber Security
17.          I would like to take note of suggestion by member for Bukit Assek on Cyber Security. Of course, because we are dealing with the personal information of citizens, we have to ensure that the information is kept in a secure manner so that the information cannot be altered, be abused by other people with all the audit trails.
There are many frameworks that can be used to ensure that the databases are secure but this is not the place for us to go into detail. Suffice to say that one way is to ensure that the softwares used are developed by our own people so that we can modify and improve them ourselves without having to resort to external or foreign vendors. I think it is all right for our people to be trained externally but we must make sure that our people are of the right calibre both in skills and sound of mind.

18.          No cyber security system is fool proof so there is constant need for upgrading. A cyber attack, while unwelcome, is a good opportunity for learning to become safer. The security of a cyber system is no different from the security of a house.
No house, however secured, is safe from attacks and probably stands no chance when there is a deliberate attack. That is why most cyber systems keep their security issues on a low profile so as not to attract undue attention. But we know that they have to constantly be vigilant in order to watch out for any attack.

19.          In the case of Estonia, it suffered a serious attack in 2007 from an unfriendly neighbour. With the help of many “white hackers” around the world, they managed to limit the damage to a few webpages being shut down without too much damage to the storage systems because of the way the system was configured.
We are aware of the need for great vigilance over the security of our computer systems. Cyber security also covers such things as the security of physical systems and the integrity of software and personnel.

20.          In ICT development, one of the key issue on cyber security is that of the “back door” when the developer built in features that allow it to access the program for the purpose of sending information back to the developer as well as for troubleshooting from a remote location.
This “back door” therefore represents a vulnerability in the system which can be exploited by unfriendly parties or for unfriendly purposes. This is where the global discussion of the credibility of one infrastructure developer over another is all about. This may be a result of the intense fight for business by developers of different countries. In the case of Sarawak, we shall make it a policy that there should be no “back door” built into our systems as part of our cyber security measures. This means that Sarawak must build up our own core of cyber security experts in order to ensure that we have own local resources to build and protect our IT systems.

21.          In this respect, I see the development of our cyber security expertise as a major source of high-paying jobs for our talented young Sarawakians. When our cyber security is properly developed, I think we will have a good foundation for the growth of the digital cluster in terms of technological progress.

Tuan Speaker,
Big Data
22.          In trying to create new opportunities in the Digital Economy, I have been keen to push forward Big Data which I announced in last DUN that I would put out the first version by the first quarter of next year. I think we will start off with a simple effort as a trial run. The Sarawak Government at present has some 53 Terrabytes of data in all our government servers because we have been digitising our functions and services since 1980s. We have to identify which data are confidential and which are non-sensitive as well as which data would be useful to the general public. Our effort in this direction is to make a step forward in our commitment towards Big Data. We will launch our state open Big Data in April 2018.

23.          But most of Big Data will have to come from data of individuals collected by service providers such as mobile phones, social media, search platforms, e-commerce platforms and including e-wallet like our Sarawak Pay. The data of interest are not data of specific individuals but unstructured data of purchasers so that they can be collated and analysed en mass in order for marketing companies and our SMEs to forecast market trends and decide what the best for their businesses.
 Big Data is not just market research using digitalised data collected from sensors that are built into digital devices but also can give us solutions to our current problems without much delay if we integrate it with machine learning capabilities.

24.          The government’s strategy in Big Data is to take the first steps and the subsequent steps will be taken by the private sectors as they release non-sensitive data in the data pool for market research purchases. In most situations, these data are not free and a fee may be charged for providing them.

E-Commerce
25.          An area which can immediately take off in Sarawak is e-commerce. This does not require too much government intervention. Two big e-commerce platforms are already operating here in Sarawak – Alibaba and Lazada. Their platforms are here and they are training local sellers how they can put their products onto their platforms and run. They are also organising their fulfilment centres in Kuching. So, Sarawak is now ready for e-commerce for those who are interested in this business.

26.          At the government intervention level, the government is considering building specific e-commerce platform to solve specific problems such as the marking of rural products into urban centres and providing platforms for rural folks to operate and also to provide a common platform for eateries’ spots where our rakyat can order the foods by just using an app and later just pay using Sarawak Pay, and this common platform can also connect and provide seamless Business to Business (B2B) interconnectivity in their daily operations (ordering their supplies, online payment, stock monitoring. This is where Sarawak Pay will also come in to play an important role in monetising the rural economy. The dedicated e-commerce platform will cut out a large portion of the middlemen and help to increase profits to the primary sellers.

Talent Development
27.          In ensuring that the Digital Economy in Sarawak is developed mostly by Sarawakians, we have to develop talent of young Sarawakians in the Digital Economy. The development of the talent of young Sarawakians in the Digital Economy is important for two main reasons. Number One is to provide them with good jobs. Number Two is to ensure that our cyber security is good and tight.
28.          Of course, there are Sarawakians who have studied or are studying subjects such as Electrical and Electronic Engineering and other areas of the electronic technology. These are obviously qualified engineers who will form the core of the Digital Economy Cluster in Sarawak. They are important talented local resource for us.

29.          But the Digital Economy is a very wide area of business which involves all kinds of people. The most obvious are people who are good in coding so that they can develop and maintain programs and other softwares. The focus of coding is now not only for websites but increasingly on mobile devices. These mobile applications are the ones that are driving the Digital Economy – which we can see from service industries such as banking, ride-sharing and even the Digital Government.

30.          We also need people who are artistic so that they can design programs that are user-friendly and are attractive to the users. The psychology of the user experience has now become an art which, when combined with technology, has also developed into big businesses. The best example is Apple which is ideas and art combined beautifully with technology.

31.          Among the young, there is great interest in animation and gaming and I think this is an area where there is a great potential for growth in the local Digital Economy and Sarawak perhaps one day can be one of the International Game Producer. Most kids are cooped up at home with their computers. This “cooping up at home” is not healthy.

But this situation can be transformed into a healthier environment whereby larger arenas are created in the local economy for these youngsters to engage in their interest and interact physically with other young people and others. They can be encouraged to compete among themselves. They can be encouraged to create new games.

32.          In the Digital Economy, there is a need for all kinds of talent. Not only in electrical and electronic subjects but also on the artistic side – designs, etc. including sales, if I may add. Many of these skills can be taught simply because they are technical in nature.
Courses can be conducted to introduce to them the subject matter, and they can be taught in classes or they can learn by themselves. The subject matters can also be how to install a server, how to maintain a server, how to solve problems when the computer system is down in the office. There are many technical areas in the Digital Economy which are really job opportunities for our young people when they are properly trained in the required skills.

33.          It is for this reason of training our young people and graduates with the necessary technical skills required by the Digital Economy that Sarawak signed a Memorandum of Agreement with Huawei last week on the 10th November 2017.
On the Sarawak side, the signing party was the Centre of Technical Excellence or Centexs which will play the role as the first South East Asia Regional Certified Specialist Training Partner, for local Sarawakians as well as for those from abroad with focus on young people from the Asean region. Programs will deal with the current technologies including wireless, microwave and fibre, and other areas such as data centres, telecommunications, energy supplies, hardware installation, as well as mobile application development. I think this is a necessary and good step for Digital Economy Sarawak.

Tuan Speaker,
Digital Innovation Entrepreneurship
34.          I now wish to move on to another related topic which I think is important for the future of the Sarawak economy in general, which also includes Digital Economy Sarawak. The topic is entrepreneurship.

35.          Entrepreneurship is a relatively new topic in the Sarawak economy. The old definition of entrepreneurship is businessmen dealing with government  to bid for government contracts.
36.          The new definition of entrepreneurship today in Sarawak is the business of using our brains to solve problems and find solutions for which we will make money. Our focus is on innovation and creativity and not on government handouts. The entrepreneur is an economic adventurer who goes out into the world constantly looking for opportunities to make money by solving problems of the world. The world is his or her oyster, as they say, and they live freely in the global environment participating in what is good for human societies and the world. The new entrepreneurs today are keen to make the world a better place, by being an agent of change, by disrupting the old ways of life or old business models, but also by protecting the natural environment. With hope and courage, the new young entrepreneurs march forward into the world and trying to save it, while enjoying their lives.

37.          The new entrepreneurs rely not on the government, for they consider the government to be restrictive, but on themselves with assistance from business leaders who have been ahead on the entrepreneurship journey.  This is a refreshing new way of creating the business environment in Sarawak, as it has been in many other parts of the world today.

38.          There is an entire whole culture of innovation and entrepreneurship among the young today even in Sarawak with mentoring from some experienced people who can either by quite old or quite young. The government has no monopoly over entrepreneurship. The government shall leave it to members of the private sector to develop your own individual and unique ecosystems to explore niche opportunities in the local and global environment in order to take advantage of a weakness who can be strengthened for the good of societies in general. The global success of innovation comes from the simple solutions to universal problems which are suffered by every human being on earth.

39.          What the government will do for innovation in Sarawak is laissez faire, that is the non-interference in the business of the private sector, allowing and even encouraging you to do whatever you dare to envisage for yourself or society – but of course without breaking the law. You do not need permission within the law. Outside the law, you know you should not do it – unless you want to challenge the law, which is another story. I wish to see innovation being encouraged across the board in the economy. (WHITE ECONOMY).
 There will be many pools of young talents who congregate among themselves according to their interests and visions. There is much to be said for a less than favourable environment for innovation for, they say, necessity is the mother of invention. There will be many false leads and false starts. Success is not promised to everyone in the real world of entrepreneurship. Success, as they say again, is preparation meeting opportunity. If you are not prepared, then you have to study and learn and do your homework. You not only need a vision but also an idea which you have to present as a project proposal. You have to develop your business model and come up with a business plan. Then you go out to look for opportunities to sell your project and business proposals to potential investors who have money and are looking for good ideas to make money.

40.          But the government will provide some encouragement to entrepreneurs as well. The government will be on the lookout for good entrepreneurial ideas especially from start-ups. Select start-ups will be provided with assistance in the form of access to basic facilities and mentoring in the expectation the ideas can be developed that are good enough to attract funding. The efforts of the government in the development of entrepreneurship in Sarawak will be encapsulated in the project called the Digital Village. Apart from this, the Ministry of Modernisation of Agriculture, Native Land and Regional Development will also encourage agriculture entrepreneur who has potential to be develop through the concept of venture capital program.

Tuan Speaker,
Sarawak Multimedia Authority
41.          I have spent a significant amount of time delving into the finer points about Digital Economy Sarawak in this august House because many Honourable Members want to know if I know what I am talking about the Digital Economy and whether I can assure them that Digital Economy Sarawak will succeed. There is no point in speculating about the future which is unknown. What I know is that we must work to make a success of Digital Economy Sarawak. I will work with all my colleagues and I hope that the Opposition will also give us support in this project for the good of the people and their constituencies.

42.          All the ideas that we have of Digital Economy Sarawak must be implemented properly. To ensure that, I am going to streamline all the projects through the Sarawak Multimedia Authority. The primary purpose of the SMA is to make sure that the ICT development including Digital Economy Sarawak are implemented properly in Sarawak – whether by the federal Malaysian Communications and Multimedia Commission (MCMC), or by SACOFA, or by the private telecommunications companies, or by SAINS, or by any other entities operating in Sarawak.
The SMA will monitor all ICT developments in Sarawak. The SMA will set policies on all issues pertaining to ICT developments. This is the only way I think we can control and determine the future of Sarawak in the digital era.

43.          I am heading the SMA because I am also the Minister in charge of the Digital Economy and Telecommunications. As Chairman of the Board of Directors, I will have other members who are experts in Digital Economy and the ICT. The Board will deal with all matters including policies pertaining to the Digital Economy and the ICT. In this way, decision-making on policy and projects can be centralised at the SMA. Concerning matters where the Government needs to make a decision, the SMA will advise the State Government. As Chairman of the SMA, I shall have a clearer picture of the issues that will be presented to the Cabinet. I think this is a practical and efficient system. As CEO of the Government, my direct involvement in the SMA will ensure that I will be taking full accountability for the outcome of this initiative. No responsible leader would embark on an initiative but not ready to shoulder the responsibility of seeing it through.

44.          For the SMA to have teeth, it must also have implementing agencies to over-see the implementation of projects. This is why the SMA also deals with financial matters, such as revenues, donations and making profits. All those implementing agencies will be parked under an umbrella organisation called the Sarawak Digital Economy Corporation or SDEC which will be a wholly owned subsidiary of the SMA. SDEC will be run by a professional expert in the field of ICT. The areas where the SMA will set policies and where SDEC will implement including all the areas which I have elaborated at some length earlier in this afternoon. They are: Digital Government, Cyber Security, e-Commerce, Digital Infrastructure, Digital Innovation Entrepreneurship, Centre of Excellence, Talent Management, among other areas which may be decided later on.

45.          The question concerning how private sector can operate within the digital industry will be answered by the SMA and SDEC after they have been operationalized. It is a bit premature to deal with operational issues at the moment. Moreover, at the present moment, there are already companies operating in the digital industry, so the field is wide open there even as we speak.
46.          In order for the private sector in Sarawak to be stimulated by the Digital Economy, SDEC will farm out as much of the jobs at it has to get done as possible to the private sector. This is because we want to give good jobs to Sarawakians. But we have to make careful checks that we do not give jobs out to contractors who then farm them out to those overseas. This defeats the purpose of trying to build our home expertise.

Tuan Speaker,
Sarawak Rights, Interests, Consultation
47.          Our way of doing the Digital Economy by the setting up the SMA – the Sarawak Multimedia Authority – is our way of exerting Sarawak rights and interests in the digital matters. This is not to say that we do not appreciate the efforts of the Federal Government through the MCMC and other entities in implementing its digital policies on Sarawak.

We do. But what we are saying is that Sarawak also has our own vision and mission too concerning these matters and we also our expectations of the desired end-results.
In exerting our rights and interests, we are also exerting our right to consultation on all matters that affect us dearly. Surely, our right to our own government, as represented so clearly – and sometimes very loudly – is expressed so obviously by the existence of this August House which is even now sitting.

Malaysia Agreement 1963
48.          The rights of Sarawak are enshrined in the Malaysia Agreement of 1963 which is an international treaty which has not been amended by all the signatory parties as peers. The signatory parties are the Federal Government, the Sarawak Government, the Sabah Government and the United Kingdom Government. The Federal Government alone on its own cannot amend an international treaty.

49.          We in Sarawak continue to exert our rights under MA63 because if we don’t look after ourselves, nobody else will. Sarawakians have been too trusting. Now, Sarawakians are even more vigilant, because many of our native sons and daughters are now highly educated, can read and write, and are aware of what is going on.

We do not want wool to be pulled over our eyes. We can see clearly now. We will do due diligence in all our agreements. We are exerting our rights under MA63 because we want to safeguard our economic interests for the present and future generations of Sarawakians. It is about reclaiming what God has given us for our fair share of the earth.

Sea Border and Mining Rights
50.          Our rights over our offshore resources were taken away by Acts of Parliament and not by this august House. The Continental Shelf Act, 1966 vested the rights with respect to the exploration of the continental shelf and the exploration of its natural resources in the Federation and be exercisable only by the Federal Government.

The Territorial Sea Act 2012 limited Sarawak’s territorial sea limits to 3 nautical miles. This Act purportedly was enacted to, amongst others, to comply with the United Nation Convention on the Law of the Sea, in which Malaysia is a signatory. Under this Convention, the territorial seas of the nation states are limited to 12 nautical miles.
However, by unilaterally reducing the territorial sea of Sarawak to 3 nautical miles, the territorial sea of Sarawak is reduced by 9 nautical miles. This affects the rights of the State to the natural resources within the territorial seas.

51.          The Petroleum Development Act 1974 provides that all the rights to exploration and exportation of petroleum both onshore and offshore in the Federation including Sarawak are placed under the sole authority of Petronas.
This clearly is an act to exploit the petroleum resources of Sarawak. By agreeing to compensate us in cash, an amount which we all now consider to be inadequate, the Federal Government has acknowledged our rights to our petroleum resources.

52.          While the Petroleum Development Act 1974 (PDA), gives Petronas the right to explore and mine for petroleum in Sarawak.
Our right to issuing mining leases are listed as part of the rights of Sarawak in the Federal Constitution.

The power of the State to issue mining leases remains in the State List of the Federal Constitution. We must exert our mining rights.
In exerting our right to mining, we are saying that, even if the PDA has vested the rights to exploration and export of petroleum to Petronas by the Federal Government, it does not mean that the Petronas has the right to simply enter into Sarawak territory, be it land or sea.
Before Petronas can operate in Sarawak Territory, Petronas must obtain the necessary licenses or leases to operate within Sarawak’s territory.

53.          In exerting the mining rights of Sarawak in our own sovereign territory, we are not saying that we are not friendly to the petroleum business in Sarawak.
We welcome the development of the petroleum industry in Sarawak. We have even set up Petroleum Sarawak Berhad or Petros to develop the petroleum industry in Sarawak.
We have no intention of disrupting the normal business of the petroleum industry in Sarawak when we exert our mining rights under the Federal Constitution.

Tuan Speaker,
54.          I think this is the time, better now than never, for Sarawak to set up a high level special task force for the purpose of exerting our rights over our own natural resources as enshrined in the Federal Constitution, IGC Report and the Malaysia Agreement 1963.
This special task force shall look at all ways and means for us to exert our rights. Having a line of communication with the Federal Government on our rights is only one of the ways.
Doing whatever we can in Sarawak to exert of our rights is another way. We shall have to put our heads together. In the words of my late predecessor, Pehin Sri Adenan Satem, all that what we are doing here is to reclaim our rights as enshrined in the Malaysia Agreement 1963 and which have been encroached by the federal authorities.

Tuan Speaker,
Royalty and Compensation
55.          Our first shot on our rights was fired three years ago when we sought to increase the petroleum royalty from 5% to 20%. I must admit that we have not succeeded in getting the 20% per se.
The crash in the oil price has created problems for government revenue as well as the viability of oil companies. Many oil companies has closed shop. At a time like this, trying to change the business model now is a very sensitive matter.

56.          But this does not mean that we are not pursuing our interests in petroleum. An increase in the petroleum royalty is an easy way to raise cash for Sarawak.
Since then, we have learnt that there are more ways than one to skin a cat. We have learnt to be a bit more sophisticated in our approach to raising our stake in our petroleum resources and making it work for us.

Petroleum Sarawak Berhad
57.          In addition to the royalty, we are now building our oil and gas industry in Sarawak. This is the purpose for setting up Petroleum Sarawak Berhad (Petros). We want more Sarawakians to be involved in the petroleum business in Sarawak. This will increase the income of Sarawakians who work in the petroleum industry. I think the skills that we build here will be invaluable to Sarawak. We want to use our own gas to power the development of other industries in Sarawak as well. Oil and gas are depleting resources and we have to leverage on them to build other non-oil and gas industries as a means of diversifying our economy.

58.          The increase in royalty is also an attempt to raise the revenue of the Sarawak Government. This could be done also by the Sarawak Government taking a major stake in any of the petroleum operations in Sarawak, including on a production sharing contact (PSC) basis.
Of course, in any commercial dealings, the Sarawak Government will have to undertake due diligence to ensure that proposal are commercially viable, with the help of Petros.

Role of the State Secretary and The Civil Service
Tuan Speaker,
59.          I wish to correct the erroneous impression some Honourable Members have concerning the conflict of interest in the appointment of the State Secretary as a Director in Petronas and PETROS.
The State Secretary is appointed to the Board of Petronas for the basic reason of monitoring and protecting the interest of Sarawak in our petroleum resources. We should be glad for Sarawak that the State Secretary is in Petronas because he acts as the official conduit between Petronas and the State Government. Furthermore, there is simply no conflict for the State Secretary because he is NOT and never been a member of PETROS. I am indeed surprised that we have Honourable Members in this august House who are very capable of dreaming up things for which there is no reality.

Tuan Speaker,
60.          In this sitting, some honourable members also raised matters related to the role of the State Secretary and The Civil Service.
61.          There is a further charge that too much powers are concentrated in the State Secretary. We must realise that the State Secretary is not a person but an institution and a statutory post provided in the State Constitution for which certain specific functions are prescribed which the person holding that position must perform by himself or by committees of persons or a task force as directed by the Cabinet of which he is the secretary.
Those powers are not personal powers. The principle job of the State Secretary is to ensure that the Civil Service implement properly the policies of the government of the day.  As you know, I am also making sure that the boards of statutory bodies and GLCs comprise government representatives as well as professionals and experts in their fields. As a result, the role of politicians is kept minimal in these statutory bodies and GLCs.

62.          I wish to emphasize that most of the positions held by the State Secretary are statutorily provided for and therefore are expressly authorised by this Legislature. These statutory positions come with the post and many of them have also previously been held by his predecessors as part of their duties.
Furthermore, I can confirm that none of the positions held by the State Secretary has infringed any State laws and the person sitting on the board need not necessarily by him but can be his representative acting on his behalf. I and my Cabinet are very happy and appreciative of the performance and efficiency of the Civil Service. On the hindsight, sometimes I begin to wonder our friends from opposite bench are running out of issues and ideas to talk in this Dewan. Just my hindsight.

Tuan Speaker,
Development Bank of Sarawak
63.          I am happy to say that the Development Bank of Sarawak was officially launched on the 3rd November earlier this month. DBOS will start operations first thing next year with a paid-up capital of RM500 million. DBOS is set up by the Sarawak Government for the specific purpose of funding strategic projects and develop specific sectors in Sarawak. Setting up a development financial institution to direct the funding resources in Sarawak is the right of Sarawak and we shall do that with collaboration with all the banks and the other financial institutions in Sarawak. In this way, DBOS plays a leading funding role for Sarawak as it provides direction for the future development of Sarawak and where investors should be focusing their resources in. In other ways, DBOS also plays the role of providing bridging finance, so to speak.

64.          The direction of development in Sarawak in the coming years is clear: the Digital Economy, the oil and gas sector, urban transport system, infrastructure, private healthcare, modern farming and renewable energy. DBOS is a development financial institution that lends money at competitive interest rates because it has to pay market interest rates for deposits it gets from the Sarawak Government and its agencies. Therefore, DBOS will be run on a commercial basis, making all due diligence on the project proposals it receives. DBOS will work with other banks and financial institutions to fund projects together in Sarawak. I also would like to express my appreciation to my cabinet colleague for agreeing that no politician are appointment in the board as I expect the bank to be run professionally.

Tuan Speaker,
Balanced Development
65.          There is a sentiment expressed in this august House which says goes like this: What is the point of going for advanced stuff such as the Digital Economy when there are people in remote areas who do not even have such basic amenities as water and electricity. I think this is a legitimate issue which I now wish to address in some detail.
66.          If a government has all the money in the world, the government will make sure that no one shall be deprived of basic amenities that now constitute a comfortable modern life. But no government in the world has all the money to do all the things it wants to do. That is the reality. This is where the careful use of scarce resources is at the heart of every economic calculation. It is from scarcity that the concept of opportunity cost arises.
Opportunity cost is the cost in the loss of opportunity when you use a scarce resource to do one thing thereby rendering all other things undone. Economic prosperity comes when scarce resources are used to do productive things. Economic depression comes when scarce resources are used to do unproductive things.

67.          Bearing all these things in mind, I think that the proper approach to the issue that is facing us is a balanced approach to our development. We should balance the strengthening of our economic foundation and improving the wellbeing of our communities. While we may argue that the end purpose of all economic activities is for the wellbeing of our people, at the same time, it is true also that if we do not take care of our economic future, then we are likely to be in no position to help our people in future.

68.          The current trend now is the rapid urbanisation of the population around the world. No doubt this must be one of the biggest impacts of the globalisation of information. Once upon a time, the rural communities around the world live in happy isolation, thinking that their world is the best of all possible worlds.

With the Internet today, however, they can see that there is a paradise outside their villages and the bright lights of the cities are calling them. We can see in recent years the mass migration of poor communities from Africa and the Middle East to Europe, the biggest pull being London which is a city that is globally renowned in all the commonwealth countries.

69.          This happened most dramatically also in Japan when in its heydays of the 1990s when the Japanese government refused to recognise the falling-out of its economic base as a result of the rise of China as a manufacturing hub, they pump-primed the economy by printing money and the reckless building of physical infrastructure.

If you go to the Japanese countryside today, you will see world-class roads, good bus and rail networks, and even shopping malls even in very small rural towns. These infrastructure facilities were built no doubt also for political reasons because, as in many countries, the majority of the votes are in the rural areas.
But you will also realise that there are very few young adults. Most are the elderly and the very young. All the able-bodied young Japanese men and women have gone to the big cities in search of their dreams. While we imagine good infrastructure to the rural areas will bring about economic development, it is also equally likely that it may bring about the depopulation of the rural communities as it makes the flight to the cities so much easier.

Urbanisation
70.          The World Bank showed that urbanisation around the world has grown from 34% in 1960 to 43% in 1990 and 54% in 2016. By 2045, more than 80% of the world population would be living in cities. While the World Bank argues that high incomes are generated mostly in urban centres, the source of the high incomes are high value-added jobs, the economies of scale in mass transit and mass housing and mass feeding in cities, and the general high pace of economic activities among the highly skilled urban workers. At the same time, the urban challenges are affordable housing (not necessarily low-cost housing), urban poverty and healthy cities, among others.

71.          For Sarawak the population demography have changed from 70% rural and 30% urban in 1970s to about 40% rural and 60% urban currently.  In the context of development in Sarawak, we see the major cities and towns to be Kuching, Sibu, Bintulu and Miri. The sub-urban areas and smaller towns are those that lie just outside these cities and towns.  Further out will be the rural villages which are in the interior but still accessible by roads. There are the many small ones which are located in remote and isolated locations which are mostly not accessible by roads but accessible by rivers. We recognise and are aware that the real challenge for development is in bringing even basic amenities to these remote villages.

72.          Our strategy in developing basic infrastructure throughout Sarawak will be integrated. The integration of the delivery of public utilities, including telecommunications, is an area which the Government shall now wish to implement. For isolated and remote communities with no access by roads but only by rivers, our strategy is to integrate the delivery of all the services for water, electricity and telecommunications.

73.          In cities, big towns and suburban areas, there is no problem except the delivery of uninterrupted services at the level that is adequate not just for social usage but also for economic activities. Our target is to deliver 100 mbps in these urban and suburban centres and other areas of economic importance such as major tourism attractions. In rural areas, our target is to deliver between 20 to 50 mbps. They will also have roads, water and electricity. The member for Kota Sentosa indicated that this is too ambitious but in reality this approach has changed with high speed internet. The year 2030 is only 13 years from today and as a responsible government we must be prepared from today and not wait until next 13 years for us to start building our internet connectivity. By then it is too late. I am sure our member from Kota Sentosa now face speed deficiency too.

Tuan Speaker,
Building Critical Mass and Branding
74.          We all know the strategic problems of Sarawak. We are big geography with a tiny population in an isolated location. Our big geography means that it is costly to build the basic infrastructure to cover the whole land. Our tiny population means that we are not suitable for labour-intensive industries while our large landmass is inclined to force us to focus on agriculture. We do not have the critical mass in the population. Our relative isolation means that our communications with the rest of the world is also expensive. It raises our cost of doing business. Our cost of transport and logistics is made even more uneconomical by its low volume. We do have some extremely challenging issues to tackle.

Greater Kuching as Smart City
75.          For economies of scale, we must develop Kuching strategically into a major competitive city with sufficiently skilled workforce.
As people from small towns and villages naturally converge in big cities, let Kuching be that city that retains Sarawakians who are looking for big opportunities, instead of abroad.
There is plenty of room for Kuching to grow., to Kuching population in general has been growing at a very slow pace of 1.5% per annum in the last 7 years 685,000 people.
 Kuching City, the North and South combined, has an estimated population of 360,000 people in 2017. Padawan itself has an estimated population of 303,000 people, Samarahan about 95,000 people and Serian about 101,500 people.
Therefore the greater Kuching now has the population of 1 million people. The pace of population growth is likely to be constrained by the lack of good jobs and business opportunities in Kuching.
 For Kuching to be vibrant, it must be economically viable. We expect the population of Kuching to grow to 1.2 million people in the next 10 to 15 years so that we can have even a better critical mass.

76.          We must plan Greater Kuching for growth in a systematically manner. Growth of the city will be triggered by the development of the Digital Economy which we are now actively pursuing.
We hope to create good jobs for talents among Sarawakians. We have to attract talent from overseas to come to live and work here in Sarawak as well.
A private education industry will attract students and create talents. A private healthcare industry will attract visitors to come on a regular basis.

Urban Transport System
77.          We shall build the Greater Kuching as a Smart City based on Transit Oriented Development (TOD) with a good public transport system structured on the Light Rail Transit (LRT) supported by integrated auxiliary transport systems like BRT, taxis, ride-sharing services and private vehicles.
Indeed, there is a lot we can do to make Kuching City and the Greater Kuching area into a liveable urban conurbation. We must also densify our city centre to attract young talents who are happy to live in compact housing packed with modern amenities.
Kuching should no longer just belong to Kuching people. Kuching should play host to the whole world. Kuching has the attraction of both the modern and the very ancient. We should price our attractions properly because our natural assets are unique in the world.

78.          Building all types of infrastructure is the responsibility of the government of the day like roads and other basic amenities. As for the LRT, it is also the responsibility of the government to mitigate urban population travel woes which is another form of cost centre. Better still, to anticipate the potential travel problem as Kuching grows.
The ultimate purpose is to minimise economic opportunity costs without too much expectation for its ROI because we expect a lot of future spin-offs from that infrastructure development. We know that the private sector and the general public will be the obvious major beneficiaries.
In other words, if we cannot achieve commercial viability we have to ensure economic feasibility where social benefits are greater than financial costs. We therefore cannot see the development of the LRT in isolation but as a trigger to a larger scheme of things.

The LRT can be one central piece in a larger fit whereby the overall result of the entire scheme is a net gain for the city, even in financial terms when all the related elements are taken into consideration.
I take note the suggestion of member for Kota Sentosa who propose that the government should commission the construction of a trans-Sarawak railway System not only to carry passengers and cargos.
 I certainly have that in mind as well but let us start with the Light Railway Transit (LRT) first. Don’t run before you can crawl as he himself and other members of opposition has been propagating. Of course I never lose sight of the needs of other parts of Sarawak in the year to come.
I find that the wishes from the other side in this August House seem to be in a confused state of mind.

Tuan Speaker,
79.          Finally, I wish to put emphasis of Sarawak as an attraction for visitors of all kinds – students, businessmen and the casual tourists.
So far, Sarawak has been and still is being marketed primarily as a tourist destination – a destination for the casual tourists. This should not be the case. Sarawak has many more attractions for many different kinds of visitors, including naturalists and environments and anthropologists.
I think Sarawak has a brand that can be successfully marketed in generic terms for the purpose of positioning Sarawak strategically in the world – the image of a place where people must come, to visit and stay, and live, work and play.
After we have branded Sarawak broadly and strategically, then we can focus more narrowly on tourism, education, healthcare, industries and other specific sectors. As a matter of fact the word ‘SARAWAK’ itself is now already a brand.
 Apart from our famous food such as Laksa SARAWAK and Kek Lapis SARAWAK, the diversity, harmony, peace, multiracial and multi religious tolerance has made ‘SARAWAK’ a well known Brand amongst the unhappy lot of people in others parts of Malaysia and the world at large.

Tuan Speaker,
Special Incentive For Sarawak Civil Servants
80.          Over the past years the Sarawak Civil Service have performed extremely well despite its small workforce of only 22,549 (inclusive of local authorities and statutory bodies).
This number has been contained for many years which reflects their efficiency despite the heavier responsibility and the rapid growth in workload in terms of projects and program over the years.

81.          In recognition and appreciation of the dedicated service of the State Civil Service which has contributed to the progress and growth of the State development benefiting the Rakyat, I am pleased to announce that the State government for the first time will give SPECIAL INCENTIVE PAYMENT to all civil servants of the state civil service equivalent to ONE MONTH BASIC SALARY or a MINIMUM of RM2,000.

82.          This special incentive payment is also in view of the commendable financial performance and healthy financial position of the State, which is attributed to their committed service, prudent spending and discipline financial management of the civil service.
The State has the financial capacity to undertake this special incentive payment involving an estimated sum of RM45 Million. The special incentive payment will be made in December 2017.
83.          I trust that this special incentive payment will further motivate our civil service to continue with their excellent service delivery. 

Conclusion
84.          I have spoken at length on many issues because we have to do many things together at the same time. Things are not likely to succeed if we do them one by one. This is because we are dealing with a community of people and each must have a role to play.  As I lay out my ideas, I hope I do not give the impression that I will be the only person in Sarawak doing everything for Sarawak. No, on the contrary, I am creating opportunities for more people to get involved, those with the skills and talent to do great things for Sarawak. This is really the time for all Sarawakians to come together to create opportunities for ourselves in Sarawak.

85.          I stand to be guided and corrected in policies or projects. I do hope that those in the know would come forward and give their advice to the government. I am always willing to listen. I am pleased to hear from the Honourable Members on the Opposite side of this August House that they are supportive of the things that the Sarawak Government is now doing. Thank you for your support. You are also apprehensive about the implementation. I do understand.

86.          I am also grateful for the support from Honourable Members from my side of the August House for their support. Many of things we are doing are new to Sarawak. We only have hope and faith and courage, combined with skills and determination. Together and God willing, we shall succeed.

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