THE sunset at Tanjung Aru beach, Kota Kinabalu, Sabah is majestic. Locals and foreign tourists laze at the sprawling beach here to be mesmerised by one of the greatest sunset views on earth every evening.
Indeed, this is not the only place in Sabah that enthrals visitors. Along the long winding coast of windy Sabah are other pristine beaches and crystal clear waters for diving and snorkeling.
Tourism is a key revenue generator for Sabah, apart from its rich natural resources.
The state is popular with international visitors due to its location facing the South China Sea. Large arrivals have come from China and South Korea.
According to the 2019 statistics of Sabah Tourism Board (STB), local and international tourists in 2019 totalled 4.195 million, up 8.2% year-on-year. Out of this, international arrivals constituted 1.469 million, a rise of 7.9% over 2018.
Among the foreign tourists, mainland Chinese – deprived of opportunities to holiday at white beaches in their homeland – form the largest group. In 2019, they numbered 598,566 – accounting for 41% of foreign tourists. South Koreans ranked second with 396,660 trips.
Other foreign tourists come mainly from Asean, Japan, Taiwan, Australia and New Zealand, Europe and North America.
Awakened to the need to explore the tourism potential of this state, the Sabah authorities have in recent months implemented some high profile projects to make the state more visible in the world of international tourism.
The launch of Club Med Borneo development in Kuala Penyu by Sabah Chief Minister in November 2019 was a watershed event for Sabah tourism.
Until that event, Sabah was perhaps the best-kept secret holiday destination in Asia. Completion of the resort is slated in 2022.
In January 2020, STB announced a new branding: Enchanting Sabah. Its improved website is beautifully crafted with colourful scenic photos.“Sabah has always been known as an eco-destination way before the term ‘eco’ became popularised.
Our conservation efforts should be commended, from having the Sepilok orang utan rehabilitation centre since 1964, Selingan island turtle hatchery since 1977, to the Bornean sun bear conservation centre in recent years. Soon to come is a pangolin sanctuary, ” said Ken Pan, chairman of STB, at the launch.
For a land so beautiful on Borneo Island and imbued with so much economic potential, it seems unfair that this “Land below the Wind” has not captured the attention of many.
Perhaps many people are unaware that apart from tourism, Sabah is actively developing its export-oriented manufacturing sector.Sabah’s approved investments in the manufacturing sector had increased by 535% to RM890.7mil within the first nine months of 2019, compared with RM140.9mil in the same period in 2018.
Data released by the Sabah Ministry of Trade and Industry show that as of June 2019, a total of 776 manufacturing projects with investments worth RM19.9bil had been implemented.
There is a suggestion to add Sabah into China’s Belt and Road Initiative (BRI) so as to capture more local and international investments.
Indeed, Sabah is already serving as a regional distribution hub for import trade, break bulk and onward shipment to key Asean markets. The removal of the cabotage policy for Sabah, Sarawak and Labuan in June 2017 by the federal government has allowed easy access to goods from foreign markets.
The removal of the longstanding policy, which means Sabah, Sarawak and Labuan do not need to import goods via ports in Peninsular Malaysia, has helped cut the cost of living in Sabah.
Additionally, the removal of the cabotage policy has enhanced trade efficiency for international shipping lines.
The major ports in the state are managed by Sabah Ports Sdn Bhd.
This unit of Suria Capital Holdings Bhd operates all the eight ports at Kota Kinabalu, Tawau, Lahad Datu, Kunak, Kudat, Sandakan, Sepanggar Bay Container Port and Sepanggar Bay Oil Terminal. But more should to be done to propel Sabah’s economic development.
Shipping cost has remained an issue for trade.
The low volume of export shipment from the state generally necessitates importers and exporters to wait until a shipment has reached its required cargo threshold for the sailing trip to be profitable.This incurs extra costs in container and storage fees, which further adds to the total freight cost.
Hence, it can be seen that Sabah is facing the disincentive of higher freight costs and port handling charges compared with ports in the peninsula and other Asean countries.The current state of ports in Sabah is another urgent issue the government must address.
While Kota Kinabalu port facilities can cater for big international ships, other smaller ports are under-equipped. Jetties, small ports and their docking yards cannot entertain mother vessels.
Crane-loading capacity is another area needed for improvement, in terms of age and load factor.
An upgrade or purchase of newer ship-to-shore cranes will increase existing container terminals’ annual handling capacity of 20-ft equivalent units (TEUs) as well as the possibility of catering for 40-ft equivalent units (FEUs) to make specific ports appealing to larger ships.
Building up shipping infrastructure to boost port productivity and accommodate various vessel sizes will help draw more local and foreign players to service Sabah port routes, and in turn boost trade with more attractive shipping rates.
Sabah has other untapped economic potential beyond tourism, forestry, oil palm, producing furniture and marine-related products.
Expanding its resource-based industries is one of the ways to increase the volume of export cargo, given the existing high cost for ocean and land freight, as well as vessel frequency.
But to do this, the government must develop inland transportation infrastructure and open up the interior. Currently, higher storage prices of goods in the rural areas of Sabah can be attributed to land freight factors, as the lack of direct infrastructure linkage from ports to rural areas raises transportation costs and time spent.
Many remote towns and villages require a combination of intra flights, sailing up rivers, and road transportation or even by foot to access goods and supplies from larger towns.
Industries in the interior require better road infrastructure for transportation of finished goods to sea ports.
Current poor road conditions and the distance of industrial parks to ports have posed a major turnoff for investors, otherwise attracted by Sabah’s development potential.
The Pan Borneo Highway Sabah is expected to improve road connectivity and bring the state to a higher level of socio-economic development.
Trade-wise, Sabah’s prominent location in the South China Sea holds appeal for East Asian commerce and China’s BRI, envisaged to create a positive impact on the state’s economic development.
In the interior, the state has tremendous potential for the manufacturing sector.
This potential has not been unlocked due to the shortcomings in logistics and poor planning by previous state governments.
It is not difficult to visualise a Sabah with a thriving manufacturing sector that is well supported by efficient logistics and solid infrastructure if there is a political will and capable management.
Sabah can be an economic powerhouse if the foundation is well-laid today.
Lynn Cheah was CEO of Eastspring Investment Bhd. She is now a private investor. The views expressed here are the writer’s own.
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