‘Same old, same old’ Sabah must change its ways

Dr Firdausi Suffian.

SO many projects and so much development and investments are flowing into Sabah. But do Sabahans see the windfall? That is the question on many a Sabahan’s mind.

Sabah is one of the richest states in the country. It has been and continues to be one of the main contributors to the country’s GDP, on average 5% pre-Covid-19 pandemic.

Sabah can be considered an economic powerhouse of the country. In terms of resources, it contributes 45.5% of the crude palm oil production, about 42% of the crude oil and is also the third largest contributor to Malaysia’s agriculture industry.

Despite all the substantial contribution and being endowed with rich resources, Sabah continues to lag behind in socioeconomic development.

This is quite a paradox – on one hand the state is rich but on the other hand, poverty and the unemployment are the highest in the country, at 25% and 8.2% respectively.

The unity government has promised to focus on development in Sabah but the key stumbling block to economic progress in the state has always been associated with lack of administrative decentralisation and fiscal autonomy.

Considering the importance of autonomy and speeding up development project, Prime Minister Datuk Seri Anwar Ibrahim’s administration has made unprecedented moves on returning rights to Sabah, first, granting gas distribution rights; decentralising decision-making to the state for development projects under federal funds for projects valued at RM50mil and below; and increasing the special grant up to RM260mil.

In the recent Budget 2023, the Federal Government allocated development funds for Sabah amounting to RM6.5bil, the largest amount ever received by the state.

Furthermore, the Prime Minister mentioned that revenue from the petroleum in the state will be used for poverty alleviation programmes.

All these efforts can revitalise the state government’s Sabah Maju Jaya development plan to improve the well-being of the people in Sabah.

On the state front, for the past three years, we saw that the Sabah government had managed to secure substantial investments.

According to International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz, Sabah’s investments reached RM11.5bil in 2022.

Now, the primary question is that does the so-called man on the street feel the development or change?

Many people are struggling after Covid-19 tanked our economy. The employment rate had not been expanding for states like Sabah even before the pandemic. The unemployment rate is high in this state – in the second quarter of 2022, it stood at 9.1% and then dropped to 8.2% in the fourth quarter but this number remains high when compared to pre-pandemic levels.

Cost of living is another problem that is related to wages, which in Sabah are relatively lower than in other states. Cost of living, however, is not, and has been compounded by higher food prices.

The problem with low wages in Sabah is because most jobs created in the state are for mid- or low value-added activities.

This is a structural economic issue. For example, there is not enough expansion of the downstream industry, limited transition into the industrial sector, and the state depending much on resource extraction activities, which are low-paying jobs.

This is a classic “resource curse phenomenon”, which has been voiced out by many economists. Due to this phenomenon, the Sabah median household income is ranked the third lowest in the country.

Again, we need to ask about those investments being brought into Sabah, which were said to have created 4,566 jobs in 2022. Are they really for mid- and high-skilled job industries for locals, especially for the young people?

So, it is hoped that all the billion ringgit investments and the CCA and other deals with Petronas can generate semi and high-skilled jobs for Sabahans.

After GE15, it is an opportune time to make meaningful changes for Sabah. Political fluidity means political leaders depend so much on one another.

This also means that Sabah can demand what is rightful to the state that can bring about economic progress. Come Sept 16 this year, it will be 60 years since Sabah, together with Sarawak and Malaya, formed the Federation of Malaysia.

Our economic progress cannot be “same old, same old”. A vital component that has to be present for economic progress is effective policy implementation.

So, if we plan to have game-changer policies, they have to kick start now and let Sabahans see and feel the progress.

> The writer is deputy chairman of the Society for Empowerment and Economic Development of Sabah (SEEDS), an independent think tank group based in Sabah. As a trained political economist, he has conducted research on Sabah politics, Sabah’s economic development and federal-state relations.