SAPP Economic Plan for Sabah
SABAH PROGRESSIVE PARTY (SAPP) subscribes strongly to human potential, dignity
and the rights of all Sabahans, regardless of race and religion. SAPP reaffirms
its mission "to establish a trustworthy government and a progressive, just and
harmonious society" and to rejuvenate Sabah's position in Malaysia.
SAPP is determined to restore and preserve our solidarity and unity to protect
the economic interests of all Sabahans. The economic disfranchisement of
Sabahans has become a lot more serious. Today, Sabah is the poorest state in
Malaysia with the third lowest Gross Domestic Product (GDP) per capita. Sarawak,
where UMNO is not present, has the second highest GDP per capita. It is not
surprising that Sabahans' stakes in the state economy has become insignificant.
Sabah is the largest oil palm state in Malaysia but Sabahans own less than 15%
of the plantations. We also see the same trend in the wholesale and the retail
trades, automobile, workshop, manufacturing, housing and food sectors. There is
ignominious sign that Sabahans can expect little business opportunities and
well-paid jobs. Ten of thousands have left the State to seek jobs outside Sabah.
Realizing that many Sabahans become "economic refugees" in our own state, SAPP
Government will introduce and implement an economic plan that will directly
benefit Sabahans. SAPP Government will pay special attention to ensure the
present and future generations of Sabahans will have the opportunities to
partake actively in the mainstream development of the state and national
The heightened role by Sabahans in the growth of our economy does not have to be
at the expense of other Malaysians and foreign investors.
SAPP Government will implement the policy of greater economic ownership by
Sabahans on a mutually beneficial framework by expanding and accelerating
economic growth and improving the Government delivery system. The culture of
corruption must be flushed out and eliminated.
SAPP Government is confident that Sabahans, other Malaysians and foreign
investors can find attractive financial returns to invest in Sabah.
The economic direction that SAPP aspires is designed to spearhead a dynamic and
sustainable transformation of the state economic outlook that will benefit the
entire spectrum of society. SAPP is the Government for Malaysians in Sabah,
committed to voicing vehemently to the Federal Government in no uncertain terms
with regards to Sabah's rightful stake in Sabah's oil and gas resources in the
state's continental shelf.
SAPP Government believes that Sabah's competitive advantage can be realized
through a market-driven economy.
SAPP will work towards uplifting the economic pride of Sabah by implementing the
A. DELIVERY SYSTEM
SAPP Government will ensure that the system of award of Government contracts for
all business related activities are implemented fairly. Approvals will be given
within specific time frame if the terms and conditions are fulfilled.
B. HUMAN RESOURCES
SAPP Government will invest intensively in the development of human capital.
Sabah needs more knowledgeable, competent and confident human capital to propel
the growth of our economy at a sustainable rate.
SAPP Government will offer more scholarships, study loans and bursaries to
address the needs of skilled and qualified human resource for the various
segments of our industries.
C. DYNAMIC INVESTMENT ENVIRONMENT
SAPP Government will review and streamline various laws and policies to minimize
bureaucratic obstacles towards expediting the process of investment
The proposed Sand Monopoly and Scrap Metal Monopoly will be abolished.
SAPP Government will strengthen the Sabah ONE-STOP INVESTMENT CENTRE to ensure
an efficient, smooth and transparent, easy-to-understand process and speedy
approval of investment application by local and foreign investors.
SAPP Government will establish a Special Investment Steering Panel with members
comprising relevant ministers, officials and representatives from private
sector. It will implement economic policies and monitor the pace of investment
inflow and projects as well as the spinoff benefits that can be reaped by
D. LOCAL ENTREPRENEURS
SAPP Government will formulate programs to identify and nurture promising and
dynamic Sabah entrepreneurs. Sabahans of all races will be groomed to become
successful businessmen/women in their own rights.
SAPP Government will provide the technical and financial assistance to enable
local entrepreneurs to exploit new economic opportunities in all fields of
E. CABOTAGE POLICY
This issue is the root cause for the higher prices of goods in Sabah compared to
West Malaysia. The policy contributes to higher shipping costs that are passed
on to consumers. The inflated cost also hikes the prices of raw materials that
are imported for property development, manufacturing and other industrial
SAPP will undertake a comprehensive review and oppose any monopolies that will
weigh heavily against the economic interest of Sabah. The Federal government
must be persuaded to abolish the Cabotage Policy which is to Sabah's
F. OIL AND GAS INDUSTRY
SAPP Government will introduce economic policies to provide Sabah a substantial
stake in this critical sector in terms of royalties, and direct say in the
utilisation of these resources. These policies will also be reflected in the
direct participation of Sabahans in Oil & Gas based ventures as well as spinoff
opportunities and employment.
Sabah must be compensated appropriately for our gas that will be piped to
Bintulu for processing into Liquefied Natural Gas (LNG) for export.
G. PALM OIL INDUSTRY
SAPP Government will ensure that there will be more palm oil downstream
processing for value-adding to the economy and to create more job opportunities.
SAPP Government will constantly monitor to ensure this industry will be able to
compete efficiently in the global markets. SAPP will also explore additional
ancillary opportunities whilst increasing Sabahans participation especially in
line with the new Land reforms as presented on 8 November 2011.
H. TOURISM INDUSTRY
This is a mushrooming industry with huge revenue-generation capacity for Sabah.
SAPP Government will work closely with the tourism operators to develop tourism
to its optimal potential with creative packaging of inherent nature attractions
complemented by quality service, matching global trends and consumer taste.
SAPP is committed to improve basic infrastructure in the tourism zones and also
to uphold a high Sabahans participation in the industry as a whole.
SAPP Government will pursue an Open Air Policy with the relevant authorities.
I. TIMBER INDUSTRY
SAPP Government will design a policy to ensure the cycle of production at a
sustainable rate, maintaining the timber resource as a key contributor to the
state revenue over the long term. SAPP Government will make both qualitative and
quantitative analysis between direct timber export and local processing for
add-on value in terms of earnings derived and economic priorities to peg timber
exports at the competitive market price.
J. BIMP–EAGA REGION
SAPP Government will explore the opportunities available and to take full
advantage of Sabah's strategic location in this sub-region, particularly
Kalimantan's prosperity due to massive surface coal exports and oil palm
plantations and tourism potential.
SAPP Government will improve the sea ports and Barter Trade centres in Tawau and
Sandakan to capitalise on this growth potential. New barter trade centres at
Kudat, Semporna and Lahad Datu will be looked into seriously.
K. LAND AS AN ECONOMIC RESOURCE
SAPP Government will exploit the full utilization of land as the main
denominator to generate income and accelerate the economic growth of Sabah. The
objective is to be realized through the following strategies:
SAPP Government will revive the Sabah Padi Board to embark on a massive plan in
improving irrigation infrastructure without necessitating the construction of
any costly mega dam. Subject to strict environmental conditions and local
villages' interests, micro dam and mini dams for the triple purposes of
irrigation, flood control and hydro power generation for local benefits will be
SAPP Government will review and aggressively pursue the goal to make Sabah
self-sufficient in the production of rice.
SAPP Government will negotiate the monopolistic policy given to BERNAS and to
liberalize it to a competitive market.
SAPP Government will exploit this industry to its full potential, covering the
culture of fish, shrimp and oyster and alga culture such as seaweed farming.
Livestock and Poultry Industry
SAPP Government will raise livestock breeding especially cattle, water buffalo
and chicken to meet growing demand for meat and gradually reduce imports mainly
from Australia and India.
Food Processing Industry
SAPP Government will encourage the development of the Food Processing Industry
by providing the necessary infrastructure.
SAPP Government will set up "post harvest facilities" at strategic locations in
the State to facilitate small and medium size farmers. This will encourage
smallholders to venture into the planting of various cash crops and fruits on
their land or even in homesteads to increase their earnings.
SAPP Government will look into the development of Dairy Farming through joint
venture investments with companies that could share their expertise and
technology. SAPP will encourage the private sector to take part as joint-venture
SAPP Government will encourage the development of the Rubber Industry and will
ensure the interests of the smallholders are looked after.
SAPP Government will provide the necessary incentives to attract private
investors with the technical knowhow to develop the downstream Rubber Industry.
L. SABAH ELECTRICTY SDN BHD (SESB)
SAPP Government intends to reverting SESB back to a state-owned entity, geared
towards adequate generation and efficient distribution of electricity which is
crucial to spur Sabah's economic growth. If SESCO owned by the Sarawak State
Government is viable and successful, there is no valid reason that Sabah's own
SESB cannot be similarly viable and successful.
M. SUGAR AND SALT FACTORY
SAPP Government will revive the proposed Sugar and Salt production in Kuala
Penyu and Matunggung respectively to produce these essential condiments for
state consumption and export.
N. FINANCIAL PRUDENCE
SAPP Government will affect comprehensive measures to ensure prudent management
and utilisation of state funds within the purview of transparency and
accountability. At the same time, SAPP Government will find ways to generate
additional revenues from oil and gas and from land, taking into consideration
that land is the paramount resource asset in any economic venture.
O. STATE BUDGET
SAPP realizes that since 1970s, 70% of State revenues were derived from timber
royalties alone. However, in the last 30 years Sabah economy has been
restructured that the sources of State revenues were diversified and timber is
only one of the main contributors.
In the 1980s, Sabah State's annual revenues reached its RM 1 billion. In 1990s,
revenues hovered at RM2 billion. By 2000s, State revenues touched RM 3 billion.
The exponential in the State budget is rapid as reflected by the 2011and 2012
budget of RM3.6 to RM 4 billion.
The main sources of revenues currently are from palm oil sales taxes at RM 1
billion, petroleum royalties RM 800 million, land revenue RM 150 million forests
RM 100 million, water sales RM 120 million, rents and returns on investments RM
800 million, revenue in lieu of export duties and excise on petroleum products
RM 120 million and the federal capitation grant RM 50 million.
In comparison to the Sarawak's State budget of RM 5.7 billion in the fiscal year
2011, SAPP Government is confident that Sabah's State revenues can achieve RM 5
billion by the year 2015.
This budget will be able to sustain the momentum of Sabah's development and able
to save for the future. The revenue is expected to be derived by way of:
Close monitoring of royalties on oil and gas, including those new,
significant discoveries in shallow waters off Sabah producing an addition 7
billion standard cubic ft. per day.
Review of payment (revenue) in lieu of export duties and excise on petroleum
Exercise State right over land by requiring land taxes on the Petronas gas
pipeline from Kimanis to Sarawak border, and other Pertonas installations in
Reinstating public auction of prime urban commercial lands.
Allowing palm oil mills to convert their agricultural land status into
industrial land status.
Revising timber royalties consistent with market prices.
(This expected revenue of RM 5 billion does not take into account the
probability of successfully claiming 20% in petroleum royalties, which at 20%
would give Sabah additional revenue of RM 3 billion per annum based on the 2011
The additional RM 1 billion in the annual revenue by 2015 SHALL be reinvested as
RM 100 million per annum in Heritage Fund (instituted in 1997) for future
RM 500 million for State Consolidated Fund for Sabah's development
RM 100 million for Sabah Palm Oil Council, which will be set up to nurture,
promote and protect the Sabah Palm Oil sector.
RM 200 million for Food Production and Security, including self-sufficiency
in rice by 2018.
RM 100 million for human resource planning and training, in order to reduce
Sabah's over dependence on foreign labour, and to raise the income and living
wage based on the productivity of local employees and workers.
P. ECONOMIC GROWTH - GROSS DOMESTIC PRODUCT AND WEALTH CREATION
It is essential that Sabah's economy grow at a sufficient rate of at least 5% to
8% in order to expand the economic cake for all to share and to reduce poverty.
Towards this end, trade liberalization, delivery system and transparent
approvals are crucial to provide a favourable investment climate. SAPP feels
that the 3.5% GDP growth rate in the current and recent years is grossly
inadequate compared to the national GDP growth at 5.5%. Sabah has achieved, in
the past, 7% to 9% growth.
SAPP Government shall endeavour to achieve 5% to 8% GDP growth per year by way
of empowerment of the business sector and encouraging private sector
investments, making it easier and healthier to do business in Sabah and
providing the needed infrastructure for the economy to grow efficiently.
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With the support of the people and a strong mandate for SAPP, SAPP Government
will bring new hope and a better Sabah for all Malaysians living in our beloved
State of Sabah.
SAPP – A NEW HOPE FOR SABAH!