Click here for Winding up speech 18th Meeting of Dewan Undangan Negeri Sarawak.
Winding Up Speech
YAB Datuk Amar Abang Haji Abdul Rahman Zohari
bin Tun Datuk Abang Haji Openg
The Chief Minister of Sarawak
on 22nd May 2017
at the 18th Meeting of Dewan Undangan Negeri
In Honour of All Sarawakians. 6
Opening Up the Local Economic Environment. 7
Big Data: Opening Up Social Data. 10
Digital Highway. 12
Digital Government. 15
Digital Economy. 16
Governance for Digital Sarawak. 16
Projects in the Immediate Future. 19
Talent Development. 19
Digital Village and Start-Ups. 20
Smart City. 22
Urban Centres. 23
LRT and Public Transport System... 25
The Development Bank of Sarawak (DBoS) 28
Negotiations with Petronas. 31
Devolution of Power. 33
Exemption from Cabotage Policy. 34
Bakun Dam... 35
Concluding Remarks. 37
Ahli-Ahli Yang Berhormat sekalian.
- Terlebih dahulu saya ingin mengucapkan syukur ke hadrat Allah S.W.T kerana di atas limpah kurniaNya setelah dilantik sebagai Ketua Menteri Sarawak yang ke-6, saya diberi tanggungjawab untuk memimpin Negeri Sarawak. Saya juga turut mengucapkan penghargaan dan terima kasih kepada Tuan Yang Terutama Yang di-Pertua Negeri Sarawak kerana telah memperkenankan perlantikan saya dan memberi kepercayaan kepada saya menerajui Negeri Sarawak yang tercinta. Saya juga ingin menjunjung kasih kepada Tuan Yang Terutama Yang di-Pertua Negeri atas ucapan pembukaannya Persidangan Mesyuarat Pertama Bagi Penggal Kedua Dewan Undangan Negeri Sarawak Ke-18 yang menyentuh pelbagai aspek pembangunan Negeri Sarawak termasuk ekonomi baru digital.
Saya juga ingin menjunjung kasih kepada Duli Yang Maha Mulia Tuanku Seri Paduka Sultan Muhammad Kelima di atas pertabalan sebagai Yang Dipertuan Agong Yang ke 15. Saya serta pimpinan Kerajaan Negeri, seluruh penjawat awam dan rakyat Negeri Sarawak ingin merakamkan ucapan tahniah ke bawah Duli Yang Maha Mulia Tuanku atas pelantikan dan pertabalan Tuanku sebagai Seri Paduka Baginda Yang Di-Pertuan Agong ke-15.
- Saya ingin mengambil kesempatan ini juga untuk menyampai rasa dukacita dan ucapan takziah saya kepada YB Datuk Amar Datin Patinggi Hajah Jamilah binti Anu di atas kembalinya ke rahmatullah Allahyarham Datuk Patinggi Tan Sri Haji Adenan bin Haji Satem, bekas Ketua Menteri kita pada 11 Januari 2017. Saya sebagai rakan politik dan sahabat rapat Allahyarham memang rasa terharu dan sedih di atas pemergian beliau dan saya berdoa agar Allah merahmati dan memberkati roh beliau. Bagi pihak Kerajaan Negeri Sarawak saya menyampaikan setinggi-tinggi penghargaan kami kepada Allahyarham di atas jasa dan pengorbanan beliau pada negeri dan rakyat Negeri Sarawak khasnya dan Malaysia amnya.
- Ahli-Ahli Yang Berhormat, dalam ucapan penggulungan pertama saya sebagai Ketua Menteri Sarawak, saya akan menyentuh beberapa perkara spesifik yang perlu diberi perhatian dan pengamatan Ahli-Ahli Yang Berhormat kerana masa depan negeri kita bergantung kepada arah tuju dan pendekatan pembangunan yang realistik serta pratikal demi masa depan rakyat terutama kaum belia sekarang yang akan menikmati hasil usaha murni kita.
- Saya mengucap terima kasih kepada Menteri-Menteri saya serta Menteri-Menteri Muda yang telahpun membantu menjawab serta mengupas perkara-perkara berkaitan dengan Kementerian masing-masing serta isu-isu yang dibangkit oleh Ahli Yang Berhormat dalam persidangan kali ini.
- It is an honour for me to speak to all Ahli-Ahli Yang Berhormat in the August House here, for the first time in my capacity as your Chief Minister.
- It is an honoured task, as well as a challenging task, for me to undertake – to lead Sarawak boldly into a new future which is being defined by the rapid changes that we see in the global economy and in the technology that is now revolutionising the way the whole world lives.
- We, in Sarawak, cannot afford to continue to be mere bystanders consuming this global technological revolution. We have to put our heads together to figure out how we can, together, leapfrog into the global technological frontier and participate in the global digital market place. We must find new ways to open up new opportunities in Sarawak for our young people. We must take seriously our responsibility to ensure that the world today and tomorrow also belongs to our children and grandchildren.
- It is important that we take big leaps into the right direction. It is important that we plan ahead strategically. It may be difficult, for some, to understand fully the big leaps that I am proposing we must undertake. The tendency is to mix up the ideas with implementation issues. When that happens, it is natural for smart alecks to make nasty remarks about those who give ideas, instead of challenging those ideas directly.
- In implementation, for sure, there will be many technical issues that need to be solved. For these, we must leave it to the technical people to solve technical problems. I hope to make myself clearer today.
In Honour of All Sarawakians
- I strongly belief that Sarawakians are strong and resourceful people. We have many Sarawakians who have done very well for themselves in various fields, at home and around the world. There are many Sarawakians in the global diaspora because they are searching for a suitable environment that allows them to be at their best. While they may be working overseas, I know that most, if not all, of these Sarawakians are still very much Sarawakians at heart.
- Of course, we are very proud of Sarawakians who have chosen to stay back at home and contribute to our homeland and ensure that Sarawak continues to grow richer in our very own culture and identity. Sarawakians at home are known for our racial tolerance and social cohesion, choosing to live in peace and harmony, and helping each other to overcome the difficulties that life often throws at us when we least expect them. It is this esprit de corps among all Sarawakians, both at home and abroad, which makes us proud as Sarawakians, for it allows us Sarawakians to live a life that is both meaningful and purposeful.
Opening Up the Local Economic Environment
- I am going to state the obvious, in order to make a point.
- It is possible for Sarawak to grow much faster, and achieve a higher standard of living, if we can make our local economic environment more conducive for entrepreneurship and business ventures.
- One of the best ways to improve our local economic environment is to open it up.
- By “opening up”, we mean making our local economy more accessible for everyone so that anyone who wants to make a good life for themselves will have a chance to do so here in Sarawak.
- In “opening up” our economy, we are also exposing ourselves to the challenges that will come domestically as well as from overseas. In responding to these challenges, we cannot just close ourselves further in and protect our comfort zone. We must indeed search for new opportunities created by these new challenges. We cannot close our minds to new ideas. We have to open up. We have to look to the future.
- In “opening up” our economy, we want new opportunities to flourish in Sarawak, from ideas that come domestically from among our young generations of Sarawakians as well as young people from other countries who find Sarawak fascinating as a place to work and live. Talent is important for Sarawak and we welcome all talent, both local and global.
- The primary focus of “opening up” Sarawak is therefore to create new opportunities for business ventures and jobs. New business ventures come from good ideas that can provide solution to problems in real life.
- Good ideas can come from new ways to solve the problems that we find in everyday life not only in Sarawak but also elsewhere in the world.
- Good ideas also come from new ways to link and network Sarawak with the rest of the world.
- We must constantly re-invent ourselves in order to make ourselves relevant to the world of today. It is the constant search for this relevancy to the constantly changing world that creates the new opportunities for all of us in Sarawak, young Sarawakians as well as old Sarawakians, of all races.
- In “opening up” Sarawak, we must also be vigilant in ensuring that our borders are secure, that we tighten our control over immigration, that we protect the strategic interests of Sarawak and that we are in control of our own destiny. There are those who say that there should be no control and there should be free movement of money and people for the economy to be vibrant and dynamic. Freedom and liberty are excellent ideals which we can only foster within an environment which is stable and controllable by us.
- In “opening up”, therefore, we mean that we wish to be connected with the rest of the world. We can either build ourselves up domestically and then venture abroad, as some of us have done.
- Alternatively, in areas where the global economy is very competitive, we must invite global companies to set up their offices in Sarawak and invest in projects here. In either case, we must make sure that our environment is conducive for both domestic investors and global companies as well as local and foreign talent.
- With our small population scattered over a huge landmass, Sarawak cannot be a place for cheap labour. Our labour is cheap only because high-paying jobs are insufficient.
- It is therefore important that our strategy to grow Sarawak at faster must be to encourage investments in high-tech ventures where talent is the major driving force.
- For talent, I strongly believe that Sarawakians are among the cleverest and more intelligent people in the world. We must create good jobs for them so that we can retain most of our clever Sarawakians back in Sarawak and build this country of ours.
- If we do not do that, we will be hollowing out our professional people and be left only with the very old who stay behind to guard their houses and their other assets while our economy remains stagnant.
- We must get our Sarawakian talents, in collaboration with global talents, to build the Sarawak economy and position ourselves strategically in the world.
Big Data: Opening Up Social Data
- In the digital world, “opening up” means that data of the government, the industries and private individuals are shared, so that the data from all different sources are linked together to provide new information that are useful for the general public. Or the data are analysed so that trends are identified and future needs satisfied in the market place. This sharing of data of the whole society is what is called Big Data.
- Big Data forms the basic core of the Digital Economy that Sarawak must leapfrog into. Big Data allows for the sharing of data so that the complete demand and supply situation are analysed and brought into control. With Big Data, the demand preferences of the consumers are be analysed, appropriate products or services designed, made and supplied to, and the necessary payments made. Big Data therefore opens up a whole new world of opportunities for businesses as well as for the government in providing useful services to the general public.
- Most of the databases of the government departments and agencies in Sarawak are already digitised, but in separate dedicated servers. I now want government servers to be linked so that non-personal and non-sensitive data can be shared and made accessible to the general public.
- I wish to announce that we shall roll-out our first version of the Sarawak Big Data by the first quarter of next year 2018. The Sarawak Big Data will represent a small but first step in our journey of a thousand miles in the development of the Digital Economy of Sarawak. Our database now is still small. But we shall provide sufficient capacity for it to grow with the Digital Economy. The Sarawak Big Data will become a new strategic asset for Sarawak in the years to come, and the Sarawak Government shall own it. Of course we will continue to secure our important data that will not be made accessible to enemy to prevent any abuse or misuse.
- With Big Data, the government and the private sector are opening up our databases to the world and therefore subjecting it to external cyber-attack. Cybersecurity therefore must go hand-in-hand with Big Data. In fact, we must first establish our framework for cybersecurity before our Big Data can be rolled out.
- Furthermore, so long as Big Data is made available to the world, we must keep constant vigilance over cybersecurity. Cybersecurity is not only about clear and present danger but also potential new sources of attacks. The knowledge and talent that is required to ensure that the cybersecurity in Sarawak is tight means that we must seriously encourage the development of cybersecurity as an industry in Sarawak. In other words, the essential core of the Digital Economy for Sarawak consists of the twins of Big Data and cybersecurity.
- In addition to Big Data and Cybersecurity, I strongly believe that the success of Digital Sarawak rests ultimately on the speed and coverage of the physical infrastructure of cables and fibres which I shall call our Digital Highway.
- Currently, Sarawak has an average speed of up to 100 megabits per second (100 mbps) per household in the urban areas as they can be connected to the UNIFI broadband.
- The problem therefore lies in the rural areas where some are currently being penetrated by satellite services which are slow, occasional and very expensive. The average speed in the rural areas which has access to the internet is about 2 to 4 megabits per second (2-4 mbps). The relay of signals through the wireless channel require a Line-of-Sight between two towers and in the mountainous interior of Sarawak, many more towers are needed.
- This is why I have said the 1,200 towers that we currently have throughout Sarawak are not enough as they cover only the urban centres and even in the urban centres there are many blind spots. Furthermore, as we increase the speed, the load gets heavier and heavier and more towers are needed to be built closer to each other. This is why I have said that we need at least 5,000 towers in Sarawak, an additional 3,800 towers if we want to do justice to our ambition of becoming a Digital Sarawak that is good for all Sarawakians, in the urban centres as well as in the remote villages.
- If I have my choice, I want all those 5,000 towers up by tomorrow! This gets my implementers worried, but my point is that they should be worried and figure out how quickly those additional 3,800 towers can be put up on the ground all over Sarawak.
- I have allocated sufficient funding to the RM1 billion for this and other purposes. So money is not the problem.
- My ambition in building sufficient towers and connecting up all households in Sarawak so that the whole of Sarawak can benefit from the digital age through tele-medicine (where doctors in urban centres can advise nurses in rural areas), e-learning (where students, and even teachers, in rural areas can also tune in to the many online courses available), and e-commerce where rural farmers can advertise and sell their products.
- I have just spoken about the coverage. Now, let me turn to the speed of the internet. I want the internet speed on mobile to be at least up to 100 mbps per household in densely populated area and between 20 to 50 mbps in low and sparsely low populated area which is sufficient for the current latest 4G technology. In the near future with 5,000 towers we can even migrate to 5G technology with new spectrum allocation.
- For us to achieve the target of up to 100 megabits per second (100 mbps) per household, we have to ensure that there is sufficient speed in the backhaul – the main pipe, if you like. From this main pipe will be drawn out to smaller and smaller pipes until they reach the smallest pipes in people’s homes.
- The current speed at the backhaul today is 1.3 terabits per second (1.3 Tbps). I announced early last month that I want the backhaul speed to be 2 terabits per second (2 Tbps) to make our foray into the Digital Economy Sarawak-wide meaningful. That announcement has been received by those who did not understand to be a gross exaggeration. It was misunderstood as tera-bytes which is the size of the files and not tera-bits which is the speed of the data transmission. So, please remember that the 2 terabits I mentioned is for the backhaul speed which is the speed for the main pipe and not the speed to the household which is an average of 100 mbps depending if it is UNIFI or mobile.
- I wish to announce here that Telekom Malaysia after my statement at IDECS Conference on 3rd and 4th April 2017, has now graciously responded to the Sarawak intention and they will now increase the backhaul speed not just to 2 terabits per second (2 Tbps) but to 4 terabits per second (4 Tbps) by June this year 2017. Thank you TM for being so supportive of Sarawak!
- The government shall spearhead the development of the Digital Economy with the development of Digital Government.
- Digital Government is not e-Government where you can do a few basic services online. Digital Government starts with establishing a way to identify each individual in digital form, so that all digital transactions he or she has to undertake with the government or elsewhere can be linked. The digital identity of individuals forms the basis of the Digital Government.
- Digital Government allows a new approach for the government to deliver its services to the people. The modern world is now strongly mobile-phone based. I therefore want the Sarawak Government to make a significant presence on the mobile phones of Sarawakians in the coming months. The Digital Government of Sarawak shall be fun, easy to use and friendly to all users. The mobile phone shall be the major interface between the government and the people for most services which can be delivered digitally.
- As you know, we already have the Official Portal of the Sarawak Government under www.sarawak.gov.my. That is a good start. I believe it can be expanded and enhanced.
- Digital Government can work with the private industry to come up with information that can help solve problems that we now face in our economy. The solutions to current problems give rise to a whole new world which is called the Digital Economy.
- The Digital Economy is about finding new approaches to creating customers and creating greater efficiency in the economy. The current focus is creating new customer experience. Customers do not merely consume physically. Customers are now more particular about how they are being treated, how they are being served, whether personal attention is being given to them, whether they are being served efficiently.
- The Digital Economy therefore opens up a whole new world of opportunities for the private sector especially the younger generation. This is an area where the Sarawak Government shall actively encourage and incentivise young entrepreneurs.
Governance for Digital Sarawak
- To take the first step into the digital economy world, the Sarawak Government shall be tabling a new ordinance to govern the development and management all aspects of the digital world in the next DUN sitting before the end of this year 2017.
- The proposed ordinance shall provide the legislative framework for establishing a new entity to be called the Sarawak Multimedia Authority. The SMA shall be the Sarawak Government outfit and shall be set up by early January 2018.
- I shall personally be driving the formation and development of the SMA to ensure that our policies for the Digital Sarawak are properly formulated and developed to ensure the most benefits that can be derived from this new economic dimension for the people of Sarawak and the Sarawak economy. I shall personally take the chairmanship of the Sarawak Multimedia Authority.
- The Sarawak Multimedia Authority shall be guided by a Board of Directors who are experts in various aspects of the digital world. The role of the SMA is to set policies and standards for the development of a world-class standard Digital Sarawak on several key areas including Digital Infrastructure, Cybersecurity, Digital Government, E-commerce, Talent development, Digital Village and start-ups and R&D in digital technology.
- The Sarawak Multimedia Authority shall further create and oversee the development of two new entities: the Sarawak Digital Economy Corporation and the Centre of Excellence for Digital Economy.
- The Sarawak Digital Economy Corporation, or SDEC, will also be fully owned by the Sarawak Government. SDEC shall be managed by local talent, to be headed by a CEO and guided by a Board of Directors who are experts in the digital technology and digital economy. The role of SDEC is to implement the policies and programmes for the development of Digital Sarawak in line with the policies of the SMA.
- SDEC shall undertake trigger projects to stimulate the Digital Economy as well as to encourage the private sector to participate and flourish in the Digital Economy.
- SDEC shall also responsible for the Digital Highway, Big Data and the Big Data Analytic Engine and managing the implementation of Cybersecurity, E-commerce and talent management.
- Another area to be formulated by SMA is Digital Village. The Digital Village is an ecosystem for start-ups, entrepreneurs, investors or even government agencies to develop and express their ideas and innovation. SMA will develop a framework for managing Digital Village for youths. SMA through SDEC will oversee the development of state owned Digital Village and encourage the setting up of similar environment by the private sector. In order to support the young technopreneurs, SMA will also facilitate technopreneurs to get fund and access markets through the Digital Village.
- The role of the Centre of Excellence is to undertake R&D activities and to advise SMA of any developments which require a change in policy or standard. The Centre of Digital Excellence shall invite as partners, universities as well as reputable researchers and practitioners, of both local and global origin. The key areas of R&D shall be smart cities, tourism, agriculture and other economic areas. While R&D will be carried out locally, our hope is for Sarawak to be an example of a successful Digital Economy.
Projects in the Immediate Future
- Let me announce several projects that we shall undertake in the next three years.
- Of immediate concern is that we have properly trained young people who can drive immediately into the Digital Economy. There will be those who are already in the Digital Economy, doing programming, web design and creating content. There are also those who are already in angel financing who are looking out for promising start-ups. They will be immediate beneficiaries when we open up Big Data by the first quarter of next year 2018.
- In the meantime, we can try to populate the Digital Economy with young people including graduates by encouraging them to get ICT certification for various types of jobs in the digital world. We have collaborate with Huawei on exploring ways to help Sarawak in developing our Digital Economy including training of talents. The training modules are currently available online and I encourage all interested parties to take a look and be involved. I am working on getting people certified on Digital Programme such as done by Huawei or any other reputable programmes by the third quarter of next year. After that, SDEC will provide a longer-term programme for knowledge and skills training and certification.
- To encourage people to get involved in start-ups, the Sarawak Government shall allocate a budget of RM10 million a year for the Sarawak Digital Start-Up Fund. This fund will provide a basic supporting allowance for young people whose proposed projects have been approved for development as a start-up. The funding will start by early next 2018 and I would like to see at least 100 start-up projects by the end of 2018.
- Those who have successfully developed their start-up projects, they will need additional funding in order to develop their projects further. I will set aside fund for this purpose. I have already allocated RM30 million for setting up of the Digital Village to undertake this start ups programmes which I intend to launch by August this year.
- For e-commerce, we shall introduce a portal that is suitable for our local producers but is connected to the global digital market. There are many levels by which the e-commerce can be developed.
- In the short term, we can immediately promote the cottage industry as well as seasonal fruits and food which often crops up now and then in various remote parts of Sarawak.
- I can imagine that the e-commerce can be up and running in a very short time, such as by the end of this year, I think we may need more time to ensure that our transport and logistics and the complete supply chain.
- For tourism, we shall develop a mobile application for visitors to use when they arrive in Sarawak. It shall contain games for them to play using the local environment. It shall provide information concerning the nearest places to eat and drink, entertainment, accommodation and medical care services.
- For health tourism, we shall develop and encourage private hospital with packages to attract visitors to use our quality healthcare services in Sarawak, starting with Kuching.
- In the longer term, we shall establish a virtual museum on a portal with 3D images of places of interest to attract potential visitors to Sarawak. We can also add in the virtual reality of a particular longhouse for an immersive experience.
- In the medium term, for healthcare especially in the remote areas, we shall introduce tele-care whereby doctors and medical experts in various parts of urban Sarawak can advise nurses in remote areas on how to handle more serious cases especially for the ageing population.
- For agriculture on a more managed and high-tech scale, we shall promote smart farming in urban and suburban areas for fruits and vegetables with the use of sensor-technology and automation.
Digital Village and Start-Ups
- For agriculture, we shall also encourage the curation of the supply chain so the consumer knows exactly the inputs in the whole supply chain. This is especially important at a time when there is grave concern over pollution and the contamination of food products.
- In manufacturing, in the medium term, we shall encourage the automation of the production of kek-lapis which is traditionally a labour-intensive and time-consuming process. The challenge is to ensure that the taste from automated production is as good if not better than the hand-made version. Information can be provided to the person supervising the production so that the output can be personalised.
- In the medium term, we shall introduce Industry 4.0 on a pilot project for furniture-making, whereby the production of furniture is modernised and fully controlled from design to the sourcing of raw materials, production and marketing.
- We shall introduce several short-term projects to make Kuching City smarter.
- As a pilot in Kuching, we shall provide a mobile application that will provide information on the different modes of transportation that are currently available, with respect to time of arrival of the next bus, the nearest taxi, the nearest vacant parking lots and the payment of parking fees. This will reduce the time waiting for public transportation.
- In Kuching as well, we shall provide a full coverage of high-resolution video cameras in busy areas to allow face detection and enforcement. This will deter petty crimes and improve the security of the city centre through video data and surveillance.
- The government shall work with telephone companies to enable micro-payments so that an alternate payment system can be developed to help those who do not have banking accounts. This will improve on the payment of small amounts through the mobile phone for both locals and visitors.
- Cities around the world are competing among themselves to attract talent by building liveable cities. The most vibrant city in the world, for many, is London which has managed to reinvent itself many times over the years. London seriously considered built a comprehensive underground public transport system in 1890. The London Underground together with the regional railway lines going northwards helped in the development of London as a business centre with affordable housing built in the suburbs. As the city became empty at night, cultural shows were developed to encourage people to stay back in the city. London today is a global cultural centre, as well as a largest financial centre in the world. The financial centre is located in the City of London which is only 1.12 sq. miles in size and governed by the Mayor of London.
- Other cities in the world that powerful city brands are Paris, Los Angeles, New York City, Singapore, Tokyo, Shanghai and Beijing. They are measured by their “assets” – attractions, climate, infrastructure (particularly transport), safety and economic prosperity. Their mentions in social media and media are also important.
- It is therefore important that if we want to jump-start the Sarawak economy to a higher level, we have to focus on developing our capital city of Kuching into a world-class urban centre, not only for visitors but also for our own people.
- I believe that for Kuching City to grow physically in an orderly manner, we must plan the city ahead for the next 30 to 50 years at least, if not a hundred years. We must have a long-term vision. London benefited from the long-term vision of its earlier planners, and so did Paris in 1848 under Napoleon III who created the current basic structure plan for the city. We will all not be here when our vision comes to fruition by then, but at least we are laying the foundation for our future generations.
- The history of big cities of the world confirms the idea that the development of big cities actually complements and provide growth of opportunities in the rural areas as the two are interdependent. Rural areas will provide the necessities of urban areas through an efficient transport and logistics system.
LRT and Public Transport System
- The core structural plan for Kuching City and for the Greater Kuching area must be the public transport system which will be the catalyst for the future growth of the city. The full public transport system will be an integrated one, with the Light Rail Transit (LRT) as the core and complemented by the Bus Rapid Transit (BRT), taxis and private cars. There will be designs for cyclists and pedestrians.
- The key benefit of building a proper public transport system is that it allows for a lower cost of living for its inhabitants, with affordable housing combined with cheap public transportation. We will build communities around the stations of the LRT and BRT, with schools, food courts and commercial centres.
- By designing properly the expansion of the Kuching City and the Greater Kuching area, we can ensure that the necessary land areas are set aside for public facilities, especially the public transport system and the parks and greens.
- Kuching City shall build sufficient capacity to house the expected increase in talents which will form the critical mass and heartbeat of the city.
- The development of each mode of public transport system, be it the BRT or the LRT, will be guided by the expected demand and the suitability of each mode to serve the needs of the people. The LRT will be developed in stages to serve as triggers for the development and growth of Kuching and its surrounding areas.
- In the long term, we can envisage Greater Kuching to encompass not just Kota Samarahan and Padawan, but also Bako, Damai, Lundu, Bau, and Serian. The centre of that public transport system is the Kuching International Airport with connections to various parts of Kuching City itself.
- If we are looking at the medium term, by its current pace of natural growth, the population of Greater Kuching the car ownership could rise by 25% from 320,000 to 400,000 cars. We are at the threshold of getting into the LRT system.
- But the population of Kuching City and Greater Kuching can grow faster than the current pace of natural growth. When Kuching is properly planned, with good connectivity in ICT and transport, the natural rate of growth of the population will rise by more Sarawakians staying back or coming back to live as good jobs can be found at home. We can also envisage Sarawakians from other part of Sarawak coming to live in Kuching because good jobs can be found here. Furthermore, foreign talents may wish to come and live and work in Kuching because good jobs can be found here.
- In fact, the challenge for city planning today is how to redesign the city that is attractive to technology-savvy talents of the millenniums who are very happy to live in small comfortable rooms with just their laptops and their mobile phones – and of course an internet connection. They of course also want a good public transport system as they may not wish to own a car.
- It is therefore possible for Greater Kuching by 2030 to have a population of more than a million people such as 1.2 or 1.3 million. This will be a good critical mass for the Kuching population and economy to grow.
- The strategic thinking now is to accelerate the expansion of Kuching City out into Greater Kuching by first building the basic structure of the public transport system with the LRT as the core and supplemented by the BRT and private taxis. The complete structure of the public transport system for the long term should by then have also already been planned. Around the basic structure will be built the required capacity to accommodate the planned increase in population. The ultimate weapon for transforming Kuching into an attractive place for young local and foreign talents is the Digital Economy with our fast speed internet.
- I am suggesting that the initial basic LRT structure should be the Kuching International Airport that goes to Kuching City, Kota Samarahan, Damai, Padawan and Serian. We can build the required real estate around these LRT stations based on the concept of TOD (Transit-Oriented Density) development. If we do not start building our LRT now, our land cost will increase in future and we may need more roads, more highways as well as more flyovers to be built which will cost us billions of ringgit.
- I wish to assure the August House that I am talking on the advice of my planners who have been working on this since early this year and based on the study that has been done by experts from Hong Kong and Singapore.
The Development Bank of Sarawak (DBoS)
- I am proud to announce that Sarawak Government was given the approval on the 31st March 2017 to establish our own development bank to be called the Development Bank of Sarawak or DBoS. I wish to express my gratitude to the Prime Minister for agreeing to my request to form this important strategic financial institution. The new financial model that I institute will trigger further economic development for Sarawak.
- Traditionally, development banks devote financial resources to projects deemed strategic by the government but which banks may see no commercial viability. Development banks usually make the mistake of encouraging failures by funding ill-conceived projects run by incompetent people. Development banks traditionally borrow from the market or corporates but not the general public in order to fund their operations.
- I wish to assure this August House that the proposed Development Bank of Sarawak shall be set up properly and run professionally and DBoS shall play a leading role in the development of Sarawak now and for many fruitful years to come. I shall ensure that the people running the Development Bank of Sarawak are professionals and banking experts and I shall solicit the assistance of the central bank to help us to ascertain that the proposed candidates are also people with credibility and integrity.
- The proposed Development Bank of Sarawak shall be wholly-owned by the Sarawak Government. It will be structured in such a way as to limit the liability of the Sarawak Government from risks in the operations. The proposed Development Bank of Sarawak shall be funded principally through deposits of the Sarawak Government and its agencies as well as through the deposits of big companies through the money market but not the deposits of the general public in the primary money market.
- The main role of the proposed Development Bank of Sarawak shall be to finance strategic projects for the Government of Sarawak.
- In doing so, DBoS shall also be in a position to lead in the development of the financial market in Sarawak by encouraging more lending and borrowing in Sarawak in order to stimulate economic activities among the private sector in Sarawak.
- In this connection, DBoS shall also encourage the funding of strategic projects in Sarawak by financial institutions with regional offices in Sarawak.
- DBoS shall complement but to not compete with the local bank branches so that its resources can be used to leverage more strategic projects as well as to spread the risks of its lending activities.
- Of particular importance to Sarawak is the development of entrepreneurship and DBoS shall lead the local banking industry in the provision of seed capital to start-ups and new ventures, especially in the area of the Digital Economy.
- As traditional banking and finance is constantly being challenged to by the Digital Economy, DBoS shall play an instrumental role in spearheading the development of digital finance or fintech in Sarawak.
- In fact, the establishment of DBoS shall provide good jobs within the bank as well as in the economy, especially in the area of cybersecurity, risk management of capital and other assets, management and governance and integrity.
- DBoS can also encourage the investment and ownership by Sarawakians of strategic assets in Sarawak by development investment funds which can be subscribed by Sarawakians in the form of bonds and the investment funds
- In the longer term when DBoS has helped to bring about the development of Sarawak and therefore having the necessary banking expertise, DBoS may fund strategic projects outside Sarawak, if need be, and which may be owned by Sarawakians in order to increase the return on capital.
- I believe that once the proposed Development Bank of Sarawak is properly established, which could be within the next 12 months, the development of Sarawak shall take on a much more directed and determined course, with prudence always by its side.
Negotiations with Petronas
- On negotiations with Petronas, I wish to state that I shall pursue the negotiations which were started by my predecessor. In doing so, I have to take cognisance of the fact that we are negotiating within an unfavourable environment when the price of oil is low and the cost of production is competitive.
- Under such a situation, the request of a 20% royalty, though still in our agenda, has to be managed with care. It does not mean that the Sarawak Government is abandoning the request but only when the global oil situation improves significantly will it be meaningful for a meeting between Petronas and the Sarawak Government be resumed on the issue of the oil royalty.
- In the meantime, however, in lieu of the royalty increase, I have decided that we should continue to pursue our interests in the development of the oil and gas industry in Sarawak, and further negotiate with Petronas ways and means by which Sarawak can participate in both the upstream and downstream activities of Petronas in Sarawak.
- The Sarawak Government will form a Sarawak-owned commercial entity alongside Petronas to explore and produce oil and gas in marginal or brown fields in Sarawak that have feasible potential to produce oil and gas.
- Furthermore, Sarawak will also participate in downstream activities. I am glad to inform the august House that, as a pilot project, Sarawak has embarked on the manufacture of methanol and its derivatives with the gas assigned to Sarawak. Based on a pre-feasibility study for a proposed methanol and methanol derivatives plant project in Bintulu, an agreement was signed on 22nd April 2017 for Petronas to supply natural gas to the proposed project and for the sale of methanol from the proposed project to Petronas.
- The Sarawak Government is also actively negotiating with Petronas on the details of the shareholders agreement on the 10% equity in the MLNG Plant Train 9. We are also working with Petronas for a larger equity in MLNG 2 plant. Let me emphasise here that Sarawak’s equity in the MLNG projects is our privilege and not anybody else is allowed to participate in these projects.
- Petronas has also been directed by the Sarawak Government that Sarawak must be consulted on the utilisation of gas from any new fields. This is to ensure that Sarawak has the first right of refusal in using the new sources of gas for the development of our oil and gas industries as well as the development of other industries in Sarawak.
- In fact, as the result of the several agreements recently signed, Petronas has committed to supplying 450 million standard cubic feet per day of natural gas for the power and non-power sectors development in Sarawak.
- Furthermore, Petronas has committed to a baseline value of RM2.1 billion worth of contracts to be awarded to Sarawak companies each year. Since 2013, Petronas has given RM15.8 billion worth of contracts to Sarawak companies. The number of Sarawak licensed or registered companies with Petronas has increased from 314 in 2013 to 420 in 2016. We will continue to develop ways and means to enhance the participation of Sarawak companies in the oil and gas industry.
- I wish to announce that Brooke Dockyard, which is Sarawak Government-owned, has been awarded the Bokor and Anjung projects for offshore Sarawak with a total worth of RM490 million. The scope includes design, construction, offshore installation, hook up and commissioning (the entire value chain of an offshore development project. This confidence paves the way for further involvement in marginal fields offshore Sarawak which we can capitalise on.
Devolution of Power
- The devolution of power process, which started on the 20th January 2016, between the Sarawak Government and the Malaysian Federal Government, has so far been progressing smoothly and surely.
- The first phase involved administrative empowerment and resulted in an agreement on 13 points of empowerment. Some have been implemented while others are still being implemented.
- The second phase concerns constitutional and finance, particularly on the issues of oil exploration, mining and gas, legislation, land and revenue from land, federal and state works, education and labour, and state public service. Priority is being given to financial matters, oil, mineral and gas including distribution of gas and revenue from land.
- On the issue of finance, it is agreed that a review be conducted as per the Review of Special Grants under Article 112D of the Federal Constitution. Included is the issue of import and excise duties on petroleum products.
- The Federal Government also agreed that Sarawak has the authority to pass laws on the distribution of gas in Sarawak and the Gas Supply Act (Amendment) 2016 shall not apply to Sarawak.
- Furthermore, the views of Sarawak on the issue of Revenue from Land (Stamp Duty) and Territorial Sea Act 2012 had been forwarded to the Federal Government.
Exemption from Cabotage Policy
Datuk Amar Speaker,
- I wish to thank the Prime Minister for agreeing to the exemption of Sarawak from the Cabotage Policy with effect from 1st June 2017.
- The Cabotage Policy is a policy that is used by nations to consolidate international shipping trade through one port for ease of control as well as for the efficient of domestic transportation and logistics. It is usually envisaged that domestic transportation and logistics is by way of road and rail.
- In the case of Sarawak, which is separated from the Port Klang by the sea, the conventional idea of cabotage does not apply simply because there is no efficient transportation between Port Klang and Kuching, for example. In the case of Sarawak, which becomes part of Malaysia not by natural geographical proximity but for political reasons, it is correct for us to pursue Sarawak-centric policies which therefore require that international shipping should be allowed directly into the main port or ports of Sarawak.
- No doubt our domestic transport and logistics system is still very basic, simply because the volume is small. We have to build the volume to have the critical mass for domestic cargo movements in order to enjoy economies of scale and hence lower costs.
- But it does not help when the cost of goods, due to the low volumes, is also being burdened by additional costs that come as a result of the roundabout transportation route that must be followed in pursuit of cabotage.
- With the exemption of Sarawak and Sabah and Labuan from the cabotage policy, I hope to see more international trade directly to each of these three areas, as well between us. Of course, we will continue to trade with the Peninsula which will continue to be a major trading partner for Sarawak. But the exemption allows Sarawak to become a centre of our own world and trade directly with other nations as well. As a result, I expect an increase in both international and domestic trade in Sarawak, and a faster pace of economic activities.
- I am proud that Sarawak has managed to reclaim the ownership of Bakun Dam, for it is a major strategic asset from which we can derive much benefits in the long term.
- It is not clever to say that because Bakun Dam is in Sarawak and if we trap it within our borders, we can exploit it for our benefits, almost for free. It is not clever because, without ownership, we do not have full control of the dam and therefore the dam may not be maintained in the best manner that it can be. Because it is a strategic asset which we must treasure, we must therefore own it and take care of it.
- The price for the Bakun Dam is RM2.5 billion in cash and RM5.6 billion in net debt outstanding as of end-December 2016. The Federal Ministry of Finance continues to provide Government Guarantee and Letter of Undertaking to the loans. The RM2.5 billion cash buys the entire equity of the Sarawak Hidro Sdn. Bhd., as well as the Special Rights Redeemable Share.
- The RM2.5 billion in cash will be paid for by SEB’s internally-generated funds and loan facilities. The net debt of RM5.6 billion will be repaid purely by the cash flows generated by the Bakun dam facilities itself over the remaining duration of the loan of 15 years as against the asset life span of the dam which will last even more than the 60 years generation licence period given by the government.
- This indeed makes very good business sense. The Bakun Dam is commercially-viable. Once the debts are paid, the Bakun Dam will become another source of income for the Sarawak Government.
- Furthermore, by retaining the control of Sarawak over the Bakun facilities which include the hydro lake, the whole Bakun area can be opened up for development – which many of us have hoped for - for broader social-economic benefit including tourism, recreation, aquaculture, community development as well as conservation.
- By owning the Bakun Dam, Sarawak is truly the largest power generator in Malaysia. This allows Sarawak to ensure that our power supply is reliable, as we can integrate the Bakun Dam with the Murum Dam and bring about a better management of our power generating capability.
- This better management of our hydropower capability allows us to have the ability to attract global digital companies to come to Sarawak and set up their Server Farms which is the underlying hardware for cloud-computing.
- This is why I am in charge of energy as well as the digital economy, so that I can ensure that the critical components of our economy are integrated with each other in order to generate greater economic value for Sarawakians.
- In sum, buying back Bakun Dam is very good news and logical acquisition by the State Government.
- Let me conclude.
- During my first 100 days, I have announced a number of initiatives which have caused so much apprehension among the DAP members that they are now in “hot soup” and “hot air” themselves. My initiatives are to leapfrog our economy into the current global digital frontier. Those who do not have the courage to embrace bold ideas, instead of leapfrogging, we find them living under the coconut shell.
- I want to repeat here to everyone in the August House that as long as I am the Chief Minister, I will ensure that all my initiatives as I have explained earlier will be implemented. If anyone has any doubt of my capability and promise, you are “hot air” yourself. Not like what happened in Penang under DAP which until today have not been able to implement their LRT as promised. I sympathise with Ahli YB for Kota Sentosa who has been deceived by his counterpart in Penang. Our LRT will be funded by our own financial model and not direct Federal funding.
- Our financing model for our strategic projects will not be as Ahli YB for Kota Sentosa and Ahli YB for Padungan have envisaged which was a primitive and coffee-shop- type of business funding method.
- We know that the Sarawak economy is still growing but not as strongly as we have been used to. This is not our fault. The growth of the world economy had been pulled up by the rise of China. The current economic consolidation of China has brought about a fall in commodity prices to lower but more sustainable levels.
- We therefore have no choice, if we want to get out of our dependence on natural resources, but to get into the digital world, which has been growing by leaps and bounds, creating millionaires by the day. We must create good jobs for our young in Sarawak so that Sarawak can grow faster.
- It is urgent to develop the urban centres in Sarawak. Kuching will take the lead. We need to increase and intensify the urban centres so that a good public transport system based on the LRT but complemented by the BRT, private taxis, private cars and cyclists can be built. We should focus our attention on the creation of new housing areas to cater for a faster increase in the population as we attract talents to urban centres.
- The Sarawak Government shall spearhead this digital development but we will leave it to the private sector and the young entrepreneurs to do whatever they can do best to make a living and a name for themselves. The Sarawak Government will provide all the necessary incentives to help young start-ups to formalise their operations. We shall encourage greater digitisation and more automation, especially in the city centres, agriculture, manufacturing and services, including tourism.
- We shall use the availability of our energy to attract global digital companies to host their operations in Sarawak. For this, we need to upgrade our digital infrastructure to world-class level. This we will push.
- We shall not forget the rural villages which we want connect in order for us to bring them tele-medicine, e-learning and e-commerce. The growth of the rural areas will be accompanied by the development of the transport and logistics of Sarawak, to ensure that we development complete supply chains.
- This is my vision and indeed the vision of Barisan National for Sarawak.
- God willing, it will come true.
- Akhir kata, saya mengucap terima kasih kepada Datuk Amar Speaker ke atas penggendalian persidangan kita kali yang cukup kemas dan teratur. Dengan kesempatan ini juga saya mengucapkan Selamat Hari Gawai kepada semua kaum Dayak yang akan meraikannya, “Gayu Guru, Gerai Nyamai, Lantang Senang, Chelap Lindap, Nguan Menua”. Kepada umat Islam yang akan menyambut Bulan Ramadan, saya mengucapkan selamat berpuasa dan selamat menyambut Hari Raya Aidilfitri. Saya mendoa agar Ahli-Ahli Yang Berhormat dan sekalian yang hadir, selamat kembali ke destinasi masing-masing dan terus memberi perkhidmatan yang terbaik untuk rakyat jelata.
Sekian, terima kasih.