Sarawak secures RM15.7 bln in investments amid pandemic
24 Oct 2021
Caring for people’s health during the Covid-19 pandemic while managing the economy and maintaining the political stability of the state is not an easy task.
Yet, against all odds, Sarawak managed to secure RM15.7 billion worth of domestic and foreign direct investments, with some of the discussions being held only virtually.
Amid the pandemic, some of the potential investors had also been willing to come to the state and undergo a two-week quarantine to seek certainty and make a prompt decision about their plans.
It was at a time like that the Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan and Sarawak trade and industry officials had to answer all their questions and entertain the investors outside their working hours and even during weekends.
In an exclusive interview with Malaysian National News Agency (Bernama) journalists Hamdan Ismail and Diah Mohd Jaiz here recently, Awang Tengah, who is also Sarawak Minister for International Trade and Industry, Industrial Terminal and Entrepreneur Development, shares the state’s recipe for success and future plans to enable Sarawak to achieve the status of a high income and developed state by 2030.
While detailing the challenges and hard work undertaken by the state government, the Deputy Chief Minister remains optimistic that all the efforts will benefit the people from all walks of life and that they will be able to enjoy better socio-economic development in the future.
Following are the questions and answers recorded in the special interview:
Bernama: Amid the Covid-19 and against all odds, Sarawak has managed to lure investors to revive its economy as evidenced in the RM15.7 billion direct investments secured over the past two years. What are the initiatives and strategies implemented by the state government in ensuring that Sarawak continues to be one of the country’s top magnets, especially for foreign investors?
Awang Tengah: Yes, having to deal with the Covid-19 pandemic for almost two years is indeed difficult for us all, and it affects our economy and our people at all levels.
We are grateful that even during these challenging times, there are some investors who are still keen on investing in Sarawak even without meeting us face to face. We can only meet virtually. Over the past two years, we have secured a total of RM15.7 billion in investments and Sarawak has continued to be the main investment destination in Malaysia.
This was made possible by the policies set in place by Tun Abdul Taib Mahmud (now Yang Dipertua Negeri) when he was the Chief Minister, and then continued by his successor the late Tok Nan (Datuk Seri Adenan Satem) and now by Datuk Patinggi Abang Johari Tun Openg, according to the situation.
The existing policy (on investment), a business-friendly policy, is one of the policies that attract investors, and in this case and apart from the incentives from the Federal Government, we, the state government, also provide our own incentives especially in terms of very competitive electricity and water tariff, land premium and even a rebate if the investor is able to complete the project within the stipulated time period.
We have succeeded in that area, but more needs to be improved in terms of facilities in the industrial estate. This is important for the investors. We are very fortunate in terms of our very strategic location, only six hours to China by flight, and we are upgrading our road connectivity, our sea connectivity (ports), and air connectivity (airports). We upgrade it from time to time and our telecommunication systems are being further improved in a bid to move to Industry 4.0 and towards a digital economy.
We have forged cooperation with many parties, especially business entities in Sarawak who constantly provide us with input on what areas should be given priority. They also have their own networks with their counterparts from several other countries. At the same time, we have our civil servants and government officials who are so efficient.
I would like to explain that sometimes these investors come here and they want to know how to invest, what are the terms and conditions to do so and they want to make a prompt decision. Sometimes when they are here, even outside office hours or on a weekend, I will call them and meet them.
Whatever is in our jurisdiction, we will decide there and then. To the investors, time is money. If my officers call them for a meeting on a weekend, they are ready. They truly appreciate that. We have been able to meet some of their needs especially in terms of manpower and we also discuss how many workers are needed for the field being ventured into.
We also plan and work with institutions of higher learning, technical colleges according to the needs of the industries. Alhamdulillah, so far, by providing a good business ecosystem, they want to invest here and because of that Sarawak has become an investment destination either mainly from FDI (foreign direct investment) and also DDI (domestic direct investment) in Malaysia.
We are not only competing with other countries, but also with other states in Malaysia. This is healthy competition.
Bernama: On investments in the industrial sector, are there investors who are keen on starting a new industry in Sarawak and if there are, when will the development of the new industry begin?
Awang Tengah: The Sarawak Government, through the post-Covid-19 development strategy has set six economic sectors to be given emphasis, namely manufacturing, agriculture, commercial, tourism, forestry, communications, and social services. These sectors will be strengthened with seven enablers – digital transformation, innovation, basic infrastructure, transportation, utilities, renewable energy as well as education and human capital development.
There are already investors who are showing interest in investing in new fields, especially in green energy, and also in the hydrogen industry. In fact, we have recently held a virtual meeting with investors from Australia who are interested in investing in the hydrogen industry. Last week, the Chief Minister and I had a virtual discussion with investors from Korea who incorporated several large companies such as Samsung, Posco, and Lotte Chemical. They are interested in investing in this field and the investment is quite huge.
In the oil and gas sector, we will accelerate the development of this industry both at the upstream and downstream levels. Emphasis will be given to downstream sectors such as the petrochemical industry. Some are already being implemented now and many more companies are also showing interest in investing in this sector especially in the petrochemical, downstream activities on the oil and gas.
In this regard, we have also appointed a consultant to formulate a master plan for the oil and gas industry, especially high-value downstream activities. involving the areas of Samalaju, Bintulu, Kidurong, Tanjung Manis, Lawas and Kuching.
In the timber sector, we are currently the largest producer of vernier plywood. We export this product especially to Japan, Korea and China and we will further develop the wood-based industries, especially towards high value-added products, as in furniture.
For the agricultural sector, several local and foreign companies have also shown keen interest in investing, especially those using the IoT (Internet of Things) platform. This is in line with the ruling Government’s efforts to develop this sector and the objective of making Sarawak a net exporter.
Bernama: The Sarawak Corridor of Renewable Energy or SCORE, which is now 13 years old, is sure to be a major investment focus area in Sarawak. Apart from SCORE, are there other areas in Sarawak that have been identified as new investment focus areas?
Awang Tengah: SCORE is a development corridor covering the central and northern parts of Sarawak and it attracts a lot of foreign direct investment (FDI). We have expanded the SCORE area and under RECODA, we have created three agencies – Upper Rajang Development Agency, High Land Development Agency, and Northern Region Development Agency. Why do we set it up? This is due to the fact the SCORE area is very large, so we set up an agency that will be able to focus on a specific area, taking into account the strengths in that particular area.
For sure we want to emphasise the development of infrastructure such as roads, bridges, water supply, electricity and telecommunications so that we can plan what (type of) development should be built. For example, in Hulu Rajang, there is the Hulu Rajang Development Agency. This is where Bakun Hydro and Murum, and also Baleh (which is under construction) are located. That is not only to give us enough electricity supply but the area can be developed as a resort.
It will be an attraction for ecotourism, and due to its vast area, it can be developed according to the suitability of a place, such as for commercial aquaculture. It has its own resources and uniqueness and has even been declared as a National Park. This is a strength for us to develop the tourism sector, especially ecotourism.
We have a lot of our own strengths. Samalaju is a vast industrial area, home to multinational corporations with a total investment that has now reached RM28.43 billion with an estimated annual spinoff of RM4 billion. To date, a total of 6,654 job opportunities have been created, and 68 per cent are local workers. All these investment activities recorded an export value of RM9.4 billion in 2020. Apart from SCORE, we will further expand Sama Jaya High-Tech Park in Kuching. This is a prime location for high-tech-based industries. Thus far, there are already several multinational companies operating, and it involves big investment.
It has been a successful investment at Sama Jaya High Tech Park with a total of 13,761 employees, and job opportunities were created with 99 per cent of them locals, including in management or upper levels. The total investment in Sama Jaya has now reached RM17.5 billion, with an annual spinoff of RM667 million. For 2020, the export value of Sama Jaya High Tech Park is RM6.93 billion. We will expand further, as several multinational companies are interested in investing in this area.
At the same time, we will set up Furniture Parks in Kuching and in Tanjung Manis. This is our way of attracting foreign and local investors to get involved in the production of high-value wood products. For now, there are already investors from China who are interested in investing in these parks.
We also provide venues for agricultural development, such as Food Basket in Betong, Sarikei and Mukah. We will develop Agro Park in several areas, such as Lubok Tamang, Asajaya and Sungai Baji in Sarikei. This is to attract investment in new fields or to further expand their investment. We also emphasise the development of industrial estates in small towns statewide.
At the very least, we must have one industrial estate in every division, not only for foreign and local investors, but it is also important to provide opportunities for small and medium enterprises (SMEs). SMEs are something that is important for the economic development of the state and the country. We emphasise the development of Anjung Usahawan (entrepreneurs corridor) which is implemented in several divisions, districts, sub-districts and villages.
This concept allows individuals to engage in the processing sector, such as food processing, and at the same time, they can also promote their products. It is important for us to assist these SMEs, as they contribute significantly to the economic development of the state and the country. Hence, the ministries, together with other agencies, will continue to focus on providing premises and help them in terms of capacity building, capital, and promoting their products. The state government has also set up STATOS (Sarawak Trade and Tourism Office) in Singapore and the Sarawak Pavilion in Kuala Lumpur with the goal to help SMEs penetrate a wider market. InsyaAllah, we will set up similar offices in Brunei and Pontianak, Indonesia soon.
Another focus is the shipping industry. We plan to develop an area in Tanjung Manis and turn the Tanjung Manis Marine Engineering Park in Paloh, in the Mukah division, into shipbuilding, repair, and marine engineering industrial area. Of the country’s 100 shipyards, 60 of them are located in Sarawak, especially in Sibu and Miri. It has great potential, and currently, they have built ships for export to Australia, the United Arab Emirates, Singapore, Indonesia and Vietnam, and in Europe. This is an industry that has the potential to grow.
Bernama: Apart from being a preferred destination for investment in the country, another success achieved by the Sarawak government is in terms of diversifying revenue generation methods, and this is seen in the implementation of the state sales tax on petroleum products since 2019. How do you see the people of Sarawak have benefited from the implementation of the tax?
Awang Tengah: We implement the state sales tax for some petroleum products meant for export. It has increased Sarawak’s revenue. It is made based on the powers that we have, in line with the powers stipulated under the Sales Tax Ordinance. We are grateful to receive sales taxes of RM6.8 billion.
It is one of the ways of engineering revenue made by the Chief Minister, and this revenue allows us to implement more strategic projects to develop the state. It is important as it enables us to help people affected by Covid-19. Fortunately, we have this additional income, especially to help those in the B40 and M40 groups. There is also the business community, as well as enterprises that have been adversely affected. We know some have gone bankrupt and some have lost their jobs.
Apart from the initiatives launched by the federal government during the pandemic period, the state government has also launched the Sarawakku Sayang Special Assistance (BKSS) 1.0 to 7.0 packages, and on Oct 14, the Chief Minister announced BKSS 7.0+ involving an allocation of RM5.3 billion. InsyaAllah, through the Budget 2022, the Chief Minister has stated that we will launch BKSS 8.0 to help those affected, including SMEs, so that they can revive their businesses, as well as one-off cash assistance for B40, bachelors, newborns as well as mothers who have just given birth.
The state government also channelled an allocation to the Sarawak Disaster Management Committee (SDMC), amounting to RM97 million, for the purpose of managing the Covid-19 pandemic.
Bernama: Holistically, the Sarawak government, led by the Gabungan Parti Sarawak (GPS), has succeeded in pursuing the development agenda in Sarawak, despite the Covid-19 pandemic and uncertain economic growth. Since its inception in 2018, there may be a formula that serves as GPS’s recipe for success in governing Sarawak.
Awang Tengah: We are grateful, from Tun Abdul Taib to the late Tok Nan and now Abang Jo, Sarawak has maintained its political stability and has a stable government, a government that has a policy of not wanting to marginalise any party, a policy that wants to focus on efforts to develop Sarawak and improve the well-being of the people.
A solid foundation for us to continue to develop Sarawak is political stability, and the integrity of the government supported by the people. Secondly, we have a peaceful state and its people, although multiracial, and in terms of religion are also different, but we all live in harmony, united, and cooperate with each other. Our differences are not a problem for us in Sarawak, but a strength.
When we established Unifor (Unit for Other Religions) it was welcomed by all communities, including the Muslim community. For Muslims, we already have the Islamic Religious Council and the Islamic Religious Department. We set up Unifor to create a harmonious society, living together even though we are of different religious beliefs. This (move) is very much welcomed by our people. This we have to safeguard; political stability and the integrity of the government are very important.
If our situation is chaotic, we will not feel safe; this is important. In terms of investment, we will continue to improve the ecosystem and environment, which is conducive to investors. We plan, InsyaAllah, by next year to set up Sarawak Invest, to make it easier for interested investors to know what the investment conditions are and what incentives they can get.
For Malaysia and Sarawak to continue to progress, we have the desire to make Sarawak a developed state with high income by 2030. We need political stability and a strong government. We need to make sure that we are stable, and that the government has a vision of how to develop the state.
So, let us work closely together and strengthen unity to ensure political stability, and this government (GPS) will continue to strive to safeguard the interests of society in developing the state. At the same time, we will continue to fight for our rights which may have been deliberately or indeliberately eroded, as enshrined in the Malaysia Agreement 1963 (MA63).
We will continue to fight because these are the rights that should be returned to us. We are thankful that there is a venue to discuss this matter, with the Prime Minister resuming negotiations through the Special Council on MA63.
Several of our demands have been fulfilled, and whichever have not, we are committed to continuing with the negotiation to resolve the issues. We will continue doing this, not only for Sarawak but also for Malaysia, so that our beloved country will always move forward with a strong spirit of unity and solidarity.