Musa Aman become Chief Minister in March 2003 on the plank of development. At that time the Sabah government inherited empty coffers; and an inertia prevailed in almost every sector of development. The government had its tasks cut out for it- giving Sabah the development path, it was craving desperately, while putting the state’s economy back on the tracks. The state has an irony since its very inception. The irony is that it has been endowed with rich natural wealth yet it miserably failed to leverage upon this wealth due, mainly, to lack of requisite infrastructure and bad governance.
True to its promise with the people the Musa government made successful efforts to set things right in priority sectors including roads, irrigation, electricity, water supply, agriculture, tourism, employment etc while at the same time improving the fiscal health of the state. A special feature of this endeavour has been that in last 13 years with Musa as chief minister development did not suffer slackness at any point of time; and there has been a continuity in development process.
Musa Aman had a job to do, and he did it as well as he could by presenting a RM 3.49 billion budget for 2016.
In his State Budget 2016 proposals Musa Aman has proposed a RM3.49 billion budget which comes with a surplus of RM29.9 million.The budget comes with an estimated revenue collection amounting to RM3.520 billion.
I was full of trepidation because of the huge expectations from the Budget. This was clearly a make or break Budget for the Musa government as it would have lost the benefit of the doubt, which it has enjoyed until now, as last year Sabah tabled a surplus budget of RM3.812 billion with a surplus of RM49.2 million. Moreover, the fear was that with the Malaysia’s ringgit currency slid past 4.0 to the US dollar for the first time in 17 years, pounded by concerns over Malaysia’s economic growth and political uncertainty stemming from 1MDB, heightened by Malaysia’s deteriorating terms of trade, high debt, and a fragile fiscal position highly dependent on oil-related revenue, the Sabah government could get scared and veer away from the path of developments. It is indeed to the credit of the Sabah government that they have proven our fears to be unfounded with another surplus budget for 2016.
Themed “Prudent Budget, The People at Heart”, Musa’s budget proposal emphasised on the need to consolidate existing state resources with a demand for effective and efficient management. It makes sense when Musa said the government formulated the 2016 budget by taking into account the global economic environment. “Even though the rate of economic growth is somewhat slowing down in Asia and globally, the state’s economic fundamentals still remain strong, due to our wealth of natural resources such as crude oil, palm oil and forest products that are still in great demand in the world market. “However, it cannot be denied that as an economy dominated by the production of major commodities such as crude oil and palm oil, the state revenue collection could be affected due to fluctuation in commodity prices and foreign exchange rates, Musa said in the State Assembly.
The Budget is replete with forward looking whose cumulative positive impact will be significant in the coming years. For me the five most important features of the Budget are:
First, its emphasis on infrastructure development by proposing an allocation of RM1.373 billion. Of these RM441 million will be allocated for economic development, RM212.7 million for social development and RM44.56 million for administration. This is buttressed by allocating RM1.5 billion for special expenditure. Infrastructural development is given the attention it deserved.
Second, agriculture sector which is Sabah’s main economic strength will be given top priority with an allocation of RM456.9 million. Out of which RM169.85 million will be allocated to carry out various agricultural development projects including the Permanent Food Production Park project, Agriculture Research Programme, Paddy Planting Development Project, Rubber Replanting Programme and Palm Oil Downstream Industry Development. Even fisheries sector will be allocated RM47.76 million to increase fish production and fishery products to 423,360 metric tons per year.
In addition the Chief Minister announced that the livestock sub-sector was allocated RM122.8 million. Livestock sub-sector recorded a gross production valued RM1.106 billion last year and expected to increase this year hence reducing the State’s food bill from year to year.
Third, the Budget’s focus on improving the business environment especially for the micro, small and medium enterprises is laudable. This includes providing infrastructure amenities and creating a conducive environment to all investors in the existing industrial parks such as Kota Kinabalu Industrial Park (KKIP), Palm Oil Industrial Cluster (POIC) in Lahad Datu and Sandakan as well as Sipitang Oil and Gas Industrial Park (Sogip).
In fact in the industrial and manufacturing sector, the state registered a total investment of RM572 million in manufacturing this year of which RM92 million represents foreign investment involving 28 companies and generating 1129 job opportunity. Since 2011, total investment in manufacturing and industry sector had achieved a total value of RM13.9 billion, generating 11,115 job opportunities.
Fourth, the Chief Minister cum Finance Minister has shown that he is not beholden to any fiscal dogma and has his attention focused sharply on the need to raise investment. He has demonstrated this by opting for a more moderate glide path even though the States’s economy growth is expected to register a moderate growth of around 3.5 to 4.5 per cent.
Fifth, the chief minister has allocated a total sum of RM290.08 million for the implementation of programmes in eradicating poverty and improving the peoples well being. More than 20 villages under Program Kampung Sejahtera (PKS) are being planned to be developed for 2016. This shows the government is always sensitive to the people’s plights and taking steps and measures necessary to ensure the welfare and prosperity of the people are safeguarded.
That the Budget has not disappointed, despite the high expectations, is in itself creditable. More creditable is that it has not succumbed to populism despite ringgit sliding, low oil prices, 1MDB fiasco, Ranau earthquake and the Abu Sayaff kidnapping. The Musa team has done well to make this a growth and investment oriented Budget while at the same time retaining and indeed increasing outlays on social welfare measures.