Tuesday, October 19, 2010

Budget 2011: Sabah & Sarawak Marginalised

With a whole series of multi-billion ringgit mega projects headlining Datuk Seri Najib Abdul Razak's Budget 2011 which seeks to be an integral step in “transformation towards a developed and high-income nation”, it has become clear as day that Sabah and Sarawak which became part of Malaysia on 16 September 2010 continues to remain marginalised and will be hard-pressed to significantly benefit from the Federal Government plans.

Purely by reviewing the budget speech by the Prime Minister last Friday and tabulating all the projects which have been listed, West Malaysia is the by far the biggest beneficiary, with our comrades in Sabah and Sarawak the biggest losers.

The value of all the projects cited which are specifically located in West Malaysia amounted to a massive RM109.74 billion and this will include some of the headline projects such as the RM40 billion MRT system for the Klang Valley, the RM26 billion KL International Financial District (KLIFD), an estimated RM10 billion worth of new highways, a RM10 billion mixed property development in Sg Buloh by EPF as well as the RM5 billion controversial 100-storey Warisan Merdeka.

In contrast, projects which are specifically for Sabah and Sarawak amounted to a meagre RM9.55 billion only or only 8.0% of the total value of these projects cited in the latest budget.

Is this continued marginalisation justifiable in the country's pursuit to become a high-income nation when it is Sabah and Sarawak who have contributed among the most to the Federal Government coffers, but who are ironically also at the same time most in need of funding to raise the standards of living of its people.

Over the past 6 years, the Federal Government has been heavily dependent on the income contributed from the oil and gas sector, especially from Petronas which finances the government in the form of income taxes, dividends, export duties as well as royalty payments. These contributions have formed an average of 40% or more than RM60 billion annually of the Federal Government's total income over the past few years. Based on 2007 data, both Sabah and Sarawak contributed 44.5% in terms of crude oil as well as 64.1% of natural gas production in the country, demonstrating the immense contribution from these states to the Federal Government.

At the same time, based on the 9th Malaysia Plan Mid-Term Review, Sabah and Sarawak remains among the poorest in the country. According to the report in 2007, the incidence of poverty in Peninsular Malaysia is 2.3%, while that in Sarawak is nearly double at 4.3%, and in Sabah its nearly 7 times higher at 16%.

Even these figures are highly suspicious and reeks of under-reporting as the state of basic infrastructure development in Sabah and Sarawak is drastically below that of Peninsular Malaysia. Based on 2009 data from the Ministry of Rural and Regional Development, 41% of both East Malaysian states are without rural water coverage, while the figure is only 10% in Peninsular Malaysia. The gap is even bigger for rural electricity coverage, when 23% is not covered in Sabah, 33% not covered in Sarawak but only 0.5% not covered in Peninsular Malaysia.

It is hence nearly impossible that poverty levels in Sabah and Sarawak as only 16% and 4.3% when 41% are without rural water while 23% and 33% are without electricity respectively. It's hard to imagine that it was only in 1970 when Sabah was the 2nd richest state in Malaysia after Selangor (which included Kuala Lumpur then) and today, it is by far the poorest.

What's more, despite constituting more than 60% of the land mass in the country, Sabah and Sarawak combined has only 6,390 km of paved roads while the Peninsula has more than 3 times the length at 21,589 km.

The vast contributions by the 2 East Malaysian states led by BN state governments to the BN-led Federal Government when contrasted against the meagre returns to the people of Sabah and Sarawak. It is not hence completely not surprising that the people of Sabah and Sarawak believe that they have been royally screwed and we have a Commonwealth Games gold medalist who chose to don Sabah colours and not that of Malaysia.

Table: Projects Listed In The Prime Minister's Budget 2011 Speech

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