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BUSINESS 2011
Saturday, December 31, 2011
Sarawak: Aiming for a high
SCORE amidst uncertainties Riding on strong domestic demand, potential generation from national growth agenda towards a promising 2012
POTRAIT OF A LEADER: Pehin Sri Abdul Taib Mahmud. – Bernama photo by Ghaz Ghazali
THERE is no denying that Sarawak – as with other parts of the world – will experience a tougher 2012 after going through a rather turbulent 2011. Just when the world economy was beginning to heal from a series of unexpected shocks – political unrest in the Middle East and North African regions that aggravated the alreadysurging oil prices; and supply disruptions arising from March-11 earthquake/tsunami disaster in Japan – the impact from ongoing financial volatility in the Western economy, particularly in Europe, could very well impede initiatives towards recovery. “The global economic prospect is expected to be more challenging in 2012,” said Chief Minister Pehin Sri Abdul Taib Mahmud in his speech during the tabling of Sarawak State Budget 2012 at the State Legislative Assembly in November. These circumstances are expected to dampen global economic growth for the year.
The International Monetary Fund (IMF) had revised downwards the world economic growth for 2012 to four per cent from its earlier projection of 4.5 per cent, while the world trade to downtrend by 5.8 per cent from an earlier forecast of 6.9 per cent – a decline of more than one per cent. Amidst such unfavourable backdrop, Sarawak remains cautiously optimistic, anticipating an economic growth of 4.5 per cent in 2011, and five per cent in 2012. “As the outlook for 2012 would be affected by the increasingly adverse external environment, strong domestic economic fundamentals are expected to support growth. The domestic sources of growth are enhanced further by the pragmatic macroeconomic policies and the implementation of various projects under the Economic Transformation Programmes (ETP),” stressed Taib, who is also the state’s Finance Minister. SCORE: The growth powerhouse With regards to the state’s growth story, the Sarawak Corridor of Re-
newable Energy (SCORE) stands out as the key generator towards attaining the goal for Sarawak to achieve a high-income state by 2020, and a fully-developed one by 2030. Even with concerns over the uncertainties in the US and Japan as well as the deepening of debt-sovereign crisis in Europe, the state’s five per-cent growth would be underpinned by the sustained expansion of private domestic demand and strong exports of commodities arising from high commodity prices and favourable regional demand. “Economic prospects in the region continued to look positive as well as supported by strong domestic demand and economic activities generated by the ongoing projects under the 10th Malaysia Plan and the SCORE area,” highlighted Taib. Launched in February 2008 by former Prime Minister Tun Abdullah Ahmad Badawi, SCORE is one of five core regional economic development corridors in the country. From 2009 until August 2011, it has attracted 14 mega projects worth a total of RM28.55 billion. “Sarawak leads the total investments with a proposed value of RM7.3 billion as at October, while Selangor is second with RM6.8 billion and Johor third with RM6.7 billion,” said Deputy International Trade and Industry Minister Datuk Mukhriz Mahathir recently. Out of the total RM7.3 billion investment so far this year, the deputy minister pointed out that RM4.2 billion, or 57.5 per
As the outlook for 2012 would be affected by the increasingly adverse external environment, strong domestic economic fundamentals are expected to support growth. The domestic sources of growth are enhanced further by the pragmatic macroeconomic policies and the implementation of various projects under the Economic Transformation Programmes (ETP). Pehin Sri Abdul Taib Mahmud, Chief Minister
CLOSE COMRADES: Taib shares a light moment with his Sabah’s counterpart, Datuk Seri Panglima Musa Aman (left). – Bernama photo
HALAL GROWTH NODE: The Chief Minister takes a closer look at the scale model of Tanjung Manis Halal Hub with wife Puan Sri Ragad Kurdi Taib (right). Accompanying Taib are Tanjung Manis Halal Hub’s executive chairperson Datuk Norah Tun Abdul Rahman (left) who is also Tanjung Manis Member of Parliament, and Halal Industry Development Corporation’s vice president Dr Abdul Malik Musharaf (second left). – Bernama photo cent, came from domestic direct investment (DDI) while RM3.1 billion (42.5 per cent) from foreign direct investment (FDI). As the name stated, the core of the SCORE would be its energy resources, capable of generating up to 28,000 megawatt (MW) of power, particularly hydropower – allowing the state to price its energy competitively and encourage investments in power generation and energy-intensive industries that could act as triggers for the development of a vibrant industrial development in the corridor. Tanjung Manis – The halal hub However, energy will not be the only piece in the whole corridor’s jigzaw. The state’s Industrial Development Minister Datuk Amar Awang Tengah Ali Hasan outlined that approved projects in SCORE would predominantly be in the energy-intensive industries such as aluminium smelting plants, polycrystalline silicon, metalic silicon and ferro alloy projects. However, two more companies – one biotechnology and the other agro-based, had commenced operations at Tanjung Manis Halal Hub. “These particular SCORE projects are expected to generate more than 10,000 job opportunities besides creating vast business opportunities through the spin-off effects,” said Awang Tengah, who is also Public Utilities Minister. At present, the country has 11 halal hubs, with more than RM6 billion in investments. In Sarawak, about RM1.8 billion in investments has been secured in the Tanjung Manis Halal Hub. Chief Minister Taib said the government would continue to develop infrastructure to enhance its halal hub initiative. In this respect, the port at Tanjung Manis Halal Hub would be extended soon to not only
GIANT POWERHOUSE: The energy behemoth Bakun Hydroelectric Dam on the Balui River west of Belaga has begun generating power in mid-2011. – AFP photo
STATE’S SYMBOLS: The State Legislative Assembly Hall stands majestically across downtown Kuching, providing a grand backdrop of the Sarawak River with festivelydecorated ‘perahu tambangs’ lining up the riverbank at the city’s side. – Bernama photo transform the state into the nation’s leading player in the halal industry; but also to tap into the trillion-dollar global halal market. He added that to date, the state had managed to attract high technology investments to develop Tanjung Manis to a level where the government could encourage the development of various biotechnology initiatives. “The halal hub would open up numerous job opportunities for the people as the industries here would require technical expertise such as basic life sciences and chemical engineering. “So huge is the potential of the halal industry that even if we only take one per cent of the global market share, that is easily equivalent to RM700 million. We will ensure that the halal hub industry develop further so that we could achieve more than the RM700 million worldwide market share.” Facing a challenging 2012
PULSE OF THE STATE: A view from the Sultan Iskandar Federal Government Complex at Simpang Tiga shows a vibrant city that is Kuching. — Bernama photo
The 10 priority industries in SCORE would ideally generate about 58,200 new jobs in the first five years to 2015, with the best
year being 2010. This would mean about 11,600 new jobs should be created each year, of which 620 a year would comprise professionals; 1,700 semi professionals; 700 support groups; and 8,600 general workers. Nevertheless, with the current backdrop of weakened global economic situation, the new year might prove to be a challenging one for the state. “For us to ride through this challenging economic environment, the government and the people must maintain unity and stability; and remain agile, resilient, productive and efficient,” stressed Taib. He advocated that the state must plan well ahead with greater foresight, and being able to enhance its capability so as to ensure that policies would be in the right direction to meet increasing challenges of global scenario and environment. “Most important of all, we can still continue to develop Sarawak to meet the expectation of our younger generation; and that means to restructure our economy so that we will be able to achieve high economy status,” Taib underscored.