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.
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| 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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