KUCHING: The 2024 State Budget has appropriated over half of the total development expenditure of RM7.8 billion for the rural population.
The budget is strategically designed with a specific goal – prioritising the economic development of Sarawak by focusing on the rural areas.
“It is crucial to grasp the significance of this approach. Firstly, the rural population constitutes nearly half of Sarawak’s total population. Secondly, the distribution of the population is not centralised. Thirdly, the land area is substantial,” said Dr Dzul Hadzwan Husaini, senior lecturer, Faculty of Economics and Business, Universiti Malaysia Sarawak.
He said this when asked to comment on the 2024 State Budget tabled by Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg today (Nov20).
“Given these characteristics, a substantial budget is necessary to bridge the rural-urban economic divide through efficient infrastructure and digitalization. This initiative is crucial to ensure that no Sarawakian is left behind,” he added.
He said, presently, the Pan Borneo Highway is expected to reach 100 percent completion by next year.
However, due to Sarawak’s unique geographical and demographic features, more initiatives are required.
In addition to the Pan Borneo Highway, the state government is currently funding the Sarawak Coastal Highway & Second Trunk Road projects. These projects aim to accelerate the convergence of urban and rural economies in Sarawak.
“Achieving this objective necessitates a significant financial commitment. As a result, we anticipate the transformation of more rural areas into urban centres within the next 5 years,” said Dzul Hadzwan.
He noted that the 2024 revenue is sourced from four main categories: tax revenue, non-tax revenue, non-revenue receipts and federal grants and repayments. Tax revenue, primarily driven by contributions from the oil, gas, and commodity sectors, accounts for the highest contribution.
However, he said, heavy reliance on this sector for income is not sustainable in the long term. To ensure long-term fiscal sustainability, the state government must restructure the revenue system. It should be noted that the economic framework is structured as a circular model.
He added that if government spending is effectively circulated, our fiscal position in the long run becomes more sustainable. This underscores the need for the government to embrace a circular economic model, where each expenditure generates returns for the state government rather than external entities, including the federal government. These returns can then be directly utilised by the state government to support the local population.
Taking ART urban transportation as an illustration, he said its services will be accessible to all Sarawak residents, including foreign workers and high-income individuals. The expansion of the state’s economy correlates with increased returns from ART, as its utilisation becomes widespread in the market.
These returns can be directed toward the development of social and economic sectors. The sustainability of targeted assistance is assured, as it is underpinned by returns from domestic circular economic activities.
A similar principle holds for the Sarawak Coastal Highway & Second Trunk Road project in the future. If there is political resolve to impose toll charges, it will enhance the state’s sustainable returns.
The benefits of coastal highways will extend beyond low and middle-class residents to include wealthy individuals, corporate sectors, and those from outside Sarawak who migrate and travel within the region. Providing these facilities for free to such individuals is deemed unfair. Successfully implementing this approach would enable Sarawak to restructure its revenue sources in a more sustainable manner.
“These returns can then be allocated in the form of monthly cash assistance to needy groups and financial aid to students. In summary, each government expenditure should prioritise being healthy, sustainable and responsible,” he added.
