Sabah afflicted with BMW in 2013 budget
The BN Budget 2013 unveiled by the Prime Minister Datuk Seri Najib Tun Razak on Friday 28th September 2012 is bad news for Sabah. The State remains afflicted with the BMW curse of Broken Promises, Marginalisation and Wrong Initiatives/Incentives despite a vote buying budget which promises many goodies in the form of outright cash handouts to tax cuts and incentives.
The RM251.6 billion Budget comprises of RM201.9 billion in Operating Expenditure and a small RM49.7 billion in Development Expenditure. Sabah will not have access to much of these funds and Sabahans would know better than to give support to a BN regime that was promised much in the past 49 years but have failed to deliver.
The three BMW curse afflicting Sabah is as follows:
Broken Promises
DAP Sabah kicked off a State wide series of "Janji Ditepati" public hearings in September 2012 to seek feedback from the people as to whether the promises made byBN / UMNO have indeed been fulfilled or not during the past 49 years of independence. The public hearings confirmed a consistent trend of broken promises starting from the famous 1994 UMNO 100-day promise to make Sabah into Sabah Baru, the eradication of poverty and the solving of the illegal immigrants problem and the provision of housing for all. The bad infrastructure such as poor roads, regular electricity and water cuts that are part and parcel of a Sabahan's daily experience is testament to the failing of the BN / UMNO government in Sabah. The so-called investment hot spot in the Palm Oil Industrial Cluster (POIC) in Lahad Datu looks quiet and abandoned. In short, the BN has failed spectacularly to fulfil any of their promises to bring development to Sabah and to raise standards of living to be on par with Peninsula Malaysia.
The BN 2013 Budget continues to fail to address crucial economic issues and as such those unfulfilled promises will remain unfulfilled. For example,
Sandakan Airport upgrading to International Airport as pledged by the BN during the Batu Sapi by-election in 2010. There is no mention of this in the 2013 Budget.Instead upgrading of airports will take place for the Kota Kinabalu / Labuan airports in Sabah and the Kuching / Miri / Sibu / Mukah / Padang Terbang Bario airports in Sarawak.
Developing palm oil downstream industry. In the Budget RM432 million is allocated for upstream activities such as oil palm replanting programmes. The Federal government is spending less for downstream industry transformation such as the development of high value oleo derivatives (RM127 million). A sum of RM72.5 million is allocated by Ministry of Plantation and Commodities for the POIC for the building of facilities. This funding cannot really help POIC since the root cause of the failure is not under-developed facilities in the site, but is more related to the initiative of encouraging Crude Palm Oil export rather than the development of downstream products. Sadly there is no assistance that has been offered in this budget to those over-taxed planters as well as the loss making oil refineries.
Providing basic infrastructure in Sabah. Sabah has been allocated just RM400 million for electricity and RM190 million for water projects in Budget 2013. This is nothing spectacular but rather a routine allocation announced in the annual budget. It is clear that the BN government has no political will to resolve the basic infrastructure problem in Sabah once and for all. A 5-year development fund for Sabah infrastructure is what Sabah needs and not a piece meal method of funding which is announced annually. Sabah's road network is only 35% tarred but yet our state only receives RM594.6 million for projects to build and maintain roads and bridges as compared to the RM2,724 million allocated for the same purposes in Peninsular Malaysia.
Marginalisation
The proportion of the budget expenditure allocated for development has been reduced from 31.5% in 2003 to 27.1% in 2007 and to 21.3% in 2012. Sadly, this worrying sliding trend continues in 2013 where the development expenditure is reduced further to only 18.6%, a record low in Malaysia's history.
This represents lower investment by the BN government, which will likely result in lower returns to the economy in future years.
How much is the government going to spend for Sabah's development? When tabulated the estimated development projects dedicated directly to Sabah is only about 6.5% out of RM49.7 billion. It means that out of RM251.6 billion budget, only 1.2% is allocated for Sabah development!
The economic growth in Sabah is basically driven by the flagship regional economic projects which is the Sabah Development Corridor. Five regional growth corridors have been launched since year 2007 to leverage the comparative advantage of different regions. Besides the SDC, there is Iskandar Malaysia, tbe Northern Corridor Economic Region (NCER), the East Coast Economic Region (ECER) and the Sarawak Corridor of Renewable Energy (SCORE).
Sabah position can be more fully appreciated when the budget allocation is analysed for the said five Regional Corridors.
Development Expenditure Operational Expenditure 2012 2013 2012 2013 Iskandar RM308.5 million (31.5%) NA RM62 million (47.7%) RM55 million (44.7%) NCER RM51.6 million (5.3%) NA RM20 million (15.4%) RM20 million (16.3%) ECER RM349.6 million (35.7%) NA RM32 million (24.6%) RM32 million (26%) SCORE RM62.3 million (6.4%) NA RM8 million (6.2%) RM8 million (6.5%) SDC RM207 million (21.2%) NA RM8 million(6.2%) RM8 million (6.5%) Total RM978 million RM1,327 million RM130 million RM123 million Table 1: Development and Operational Expenditure for Five Regional Development Corridors, excerpted from 2012/2013 Economic Report and 2013 Budget
It is noteworthy that the Sabah Economic Development and Investment Authority (SEDIA), the agency that facilitates SDC will only receive 6.5% of operational expenditure provided by Federal government compared to the 21.2% of development expenditure spent in 2012. There is a gross imbalance when Iskandar receives about half of the total operational expenditure budgeted for regional development. For that matter, Johor which does not have any oil and gas reserves but sites in the state have been chosen as locations to develop a downstream petrochemicals industry! This is despite the fact that a huge crowd gathered on September 30th at Kg Sungai Rengit in Johor to protest against the RM60 billion petrochemical project that will see thousands of villagers lose their homes and livelihoods. The BN, for reasons only known to itself, has sidelined Sabah for the the development of the petrochemical industry even though Sabah is an oil and gas producing State. Sabah's contribution to the national coffers is huge and coupled with its underdeveloped status, it should naturally gain more in the budget especially in terms of the Development Expenditure.
Wrong Initiatives/Incentives
There are some good things coming out of the Budget 2013. A good example is the price uniformity programme. However, the so called "price uniformity programme" is a "conditional whereby the program is only applicable to Kedai Rakyat 1 Malaysia (KR1M) stores in Sabah, Sarawak and Labuan. This is, in short, the promotion of a monopoly that will be imported from Peninsular Malaysia.
The more than 57 KR1M stores to be set up in East Malaysia will in fact create an uneven level playing field resulting in the genuine local stores losing out on price differential. The local stores have been selling at higher prices because of the much disliked cabotage policy and the government's inability to manage and control rising prices of consumer goods. While the quality is questionable, KR1M stores which can offer lower price goods through direct government aid and managed by the Peninsular based grocery retailer, Mydin, which will slowly but surely cripple the businesses of many local genuine Sabahans.
The Budget 2013 is therefore a reflection of the core ideology of its proponent - the BN / UMNO government. BMW - Broken promises, Marginalisation and Wrong Initiatives/Incentives have plagued Sabah over the last 49 years and kept us backwards regardless how many goodies are distributed to make the voters happy. On the other hand, the Pakatan Rakyat's alternative 2013 budget pledges a New Deal for Sabah and Sarawak, which includes an increase of petroleum royalty from 5% to 20%. BN / UMNO is taking advantage of its position as the government of the day to spend the taxpayer's money and to waste revenue from our natural resources in preparation of the 13th general election due to be called by the middle of 2013 at the latest. The irresponsible spending that marks the BN's 2013 budget is increasing our national debt to unsustainable levels that will propel Malaysia in the direction of a bankrupt country.
Let us Ubah before it's too late.
