As Sarawak moves progressively into the next level of the development, which will be increasingly challenging, it is imperative that efforts must be focused towards structuring and transforming the State economy to achieve a developed State status by 2030.
While the State should be quite pleased with its progress and achievement there are still so much more that need to be done particularly in transforming the rural areas to catch up with urban development.
Understandably, the State Government will not able to do it alone but require all the necessary efforts of the Federal Government especially in providing good and public facilities and infrastructure such as schools, clinics, hospitals, roads, bridges, wáter and electricity supplies in rural areas.
One of Sarawak’s biggest challenges is to reduce the development gap between the rural and urban areas, not only in terms of infrastructure but income of the people. Therefore, the State 2017 Budget has allocated more than 50% of development allocation of RM2.9 billion to rural areas.
Essentially, Sarawak, being a developing State, must have a budget that is biased towards development in order to stimulate a desirable level of economic activities and sustain growth. In this connection a sum of RM5.9 billion or about 73% of the total budget is allocated for development and the balance of RM2.2 or 27%, for operating expenditure.
This is in line with the Government’s commitment to give greater focus on the implementation of programs and projects in rural areas to open up greater opportunities for development in rural areas for the benefits of rural communities Essentially, the Budget has to focus on the key objectives to achieve a more balanced development and support a desired level of economic growth
The 2017 Budget also takes into special consideration “The Sarawak Transformation: The Way Forward”. In this regards, three (3) Cabinet Committees that have been formed have identified several Key Result Areas for implementation.
The State Budget 2017 set aside a total allocation of RM817 million for the transformation initiatives. Out of the amount, RM797 million is for developing development expenditure while RM20 million is for operating expenditure to further economic growth and development.
The previous Chief Minister, the late Datuk Patinggi Adenan Haji Satem, who was also the Minister of Finance, said concerted efforts must be made as a factor to drive productivity and efficiency. The State must manage and control operating expenditure to avoid suffering from a Runaway Operating Budget and optimize the use of available resources and minimize wastage. The budget gives special focus on enhancing the effectiveness of financial management and the efficiency of delivery system.
He said the development allocation gave priority to commerce and Industry and productive sectors such as social and community development, general administration, transport and communication, public utilities and Agriculture and Land Development.
The State revenue for 2017is projected at RM5.3 billion: Tax Revenue is expected to be at RM1.25 billion comprises the following, RM53.9 million from forestry royalty and premium; RM440 million from sales tax, of which, RM320 million is expected from Crude Palm Oil and Crude Palm Kernel Oil while RM120 million from lottery; and RM271 million from raw water and mining royalties, land rents and others.
The Non-Tax Revenue is expected at RM3.9 billion derived from the following major components namely RM1.5 billion from cash compensation in lieu of oil and gas rights, RM755 million from dividend income, RM1.011 billion from interest income, RM300 million from land premium, RM120 million from cash compensation in lieu of import and excise duties on petroleum products and RM137 million from others including licenses and service fees, permits and rentals.
Non revenue received is expected to be at RM21 million, mainly from forest liquidated damages and disposal of assets; and Federal Grants and Reimbursements is expected to be at RM150 million.
A sum of 5.706 billion is proposed for Ordinary Expenditure for 2017. Out of this total allocation, RM2.2 billion is for operating expenditure and a sum of RM3.5 billion is proposed to be appropriated to the Statutory Funds, to finance development programs and projects.
The 31% for grants and fixed payments, comprising operating grants to Statutory Bodies and local authorities, servicing of public debts and payments of gratuities, pensions and scholarships and RM34 million for the procurement of assets and RM10 million for other operating expenses.
The estimates on the Development Expenditure for 2017 have taken into consideration among others the commitment to complete the implementation of the on-going projects as well as the capacity of our State agencies to implement projects during the year.
A sum of RM5.646 billion, out of the total provision from development expenditure, will be funded by the State while RM282 million will be financed by the Federal Government through reimbursable loans and grants.
The 2017 Budget has taken into consideration various challenges being faced from both domestic and external fronts, takes cognizance of the latest global development and anticipates possible outcome that can have an impact on the development of various sectors in the economy.
The rural areas are blessed with vast agriculture resources, which can be harnessed through modernizing and commercializing the agriculture sector, which is no longer just about farming but a business that will raise the income of farmers.
In this connection, the State government will look into the overall supply chain, which includes revitalizing and improving products and marketing, increasing private sector investment and commercializing research and development of the local farmers.
A total of RM80 million is being allocated to revitalize and improve the products and markets of local farmers namely to strengthen the distribution network through the setting up of collection, processing and packaging centers at Layar Station, PPK Lundu, Temudok Station and individual Quick Freezing (IQf) Tarat.
A sum of RM20 million will be allocated to provide better accessibility between the farms and markets by developing more farm infrastructure. Another RM52 million is being set aside to improve production of agriculture produces through the provision of agriculture incentives for planting of coconut, sago, pepper, oil palm, swift let farming, rehabilitation of existing orchards and to increase cattle population through cattle integration within oil palm estates.
Datuk Patinggi Adenan believed Sarawak must create new growth impetus by leveraging on tourism as the key driver in the development of new and diversified tourism products, attractions and events that will transform the tourism industry. Obviously, Sarawak must develop a strong brand in the tourism industry. It must assign experts to conduct research and identify the most suitable brands, which are not limited to tourism. Budget 2017 allocates a total of RM8 million for the purpose. It also allocates RM4.5 million to organize more chartered flights to bring more tourists to the State.
Datuk Patinggi Adenan said a sum of RM12.3 million is being allocated to improve tourism infrastructure and conservation and restoration of heritage while RM18.5 million is being allocated for the enhancement and development of tourism products, which include reimaging Rainforest World Music Festival, AIFFA, Kuching Waterfront and Brooke Dockyard maritime Museum.
Besides, a sum of RM2 million is being allocated to develop Sarawak Apps for digital marketing and RM2.7 million to develop Tourism Satellite Account for accurate and reliable data on tourism expenditure, arrival and departure for strategic planning.
Obviously, entrepreneurship is the key figure of economic development, the pivotal force of change in the market system that can create wealth from opportunities. Nevertheless, the State’s business population is still small in spite of many economic opportunities being created in the process of development.
Clearly, the current scenario warrants necessary intervention by the Government to assist people, young people in particular to harness them with knowledge and creativity in starting up business.
Of course, the target groups must necessarily comprise low-income group, technically incompetent individuals and graduates, who are keen to venture into business. An allocation of RM8.7 million is being made in Budget 2017 to carry out various activities on entrepreneurship development during the year.
Datuk Patinggi Adenan said as more than 50% of the State population is residing in urban areas, proactive approaches must be made to manage the challenges brought about by the rapid urbanization.
He said comprehensive urban master plans will be formulated to ensure an orderly development of major towns. Besides, the State Urban Renewal Master Plan will be formulated to guide the re-development and renewal of urban areas.
In this regards, traditional villages around the urban centers will be re-developed in phases to take care of the livelihood of the people. Urban critical mass is crucial to create more vibrant economic activities create more employment and business opportunities for the people, the young people in particular.
He believed efforts to expand the urban economy will develop niche factors of cities and towns whilst giving more recognition to the informal sector as one of the economic growth factors. Budget 2017 allocates RM30 million to develop more hawkers markets and entertainment centers in Kuching, Sibu, Miri and Bintulu.
In this connection, the State Government will intensify participation of the private sector in the waterfront development to increase economic activities along the waterfronts. Besides, rundown areas and dilapidated buildings will be re-developed and retrofit for commercial purposes.
Datuk Patinggi Adenan said the State Government would establish Sarawak Public Transport Authority to plan, manage and regulate the public transportation system, which must be speeded up particularly in Kuching city.
He said the State government would work closely with Federal Government to address flooding in a more comprehensive manner. In this connection, the Urban Land use master Plan will be enforced as part of strategies to reduce occurrences of flash food in urban areas.
