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Monday, February 13, 2012

My Brief Notes On Anwar Ibrahim's Promise Of 20% Oil Royalty To Sabah




  • Datuk Seri Anwar Ibrahim has been quoted that he would increase Sabah oil royalty from 5% to 20%.

  • Other opposition leaders like Datuk Dr Jeffrey Kitingan went even further by promising 50%. But in order to achieve this, Dr Jeffrey has to depend on Dato Seri Anwar's support.

  • As an MP Sabah I do not have any reason to reject such wonderful proposal. More money for Sabah is obviously good for us.

  • Unfortunately, I am also painfully aware that Anwar has not been fully forthcoming in his proposal.

  • In Parliament, I posed a question that if Anwar increased Sabah’s royalty to 20%, could he guarantee that he would not reduce Sabah’s existing percentage of allocation in his federal budget for 2013 or in the Eleventh Malaysia Plan?

  • I reminded the opposition that Sabah had been consistently given biggest percentages of allocation by the federal government both in the Malaysia Plans and its annual budget.

  • For example Sabah received RM20.3bil out of RM230bil and in First Rolling Plan of RMK10, Sabah received RM10.7bil out of RM98.5bil.

  • My concern is, while Datuk Seri Anwar may increase Sabah’s share of the royalty, he also may have to reduce Sabah allocation in the 11th Malaysia Plan.

  • We may end up the same of even worse off! That is why I asked for a guarantee. None of the opposition MP at that time stood up to reply to my argument.

  • Increases in royalty for Sabah, Sarawak, Trengganu and Kelantan would easily amount to more than RM10bil a year. (Sarawak and Trengganu produce more oil than Sabah).

  • Dato Seri Anwar knows very well that the additional RM10bil given to the four oil producing states mean RM10bil have to be taken away from the budget of other states in West Malaysia.

  • I do not think Dato Seri Anwar dares to say to the people from the non-oil producing states, “I am sorry, I have to cut your allocation because I need to give RM10bil to Trengganu, Kelantan, Sarawak and Sabah!”.

  • The people there will reject him. This is unaccetable to him since he needs their votes desperately to win Putrajaya.

  • It is very likely that Sabah may be getting higher oil royalty but in the end will get lower overall funds from Federal Government under Dato Seri Anwar Prime Ministership.

  • So far he has not given Sabahans a guarantee that it will not happen! 

  • For every ringgit given to Sabah, Sarawak, Trengganu and Kelantan, that one ringgit must come from somebody.

  • The money does not fall from the sky.

  • Some states must be willing to sacrifice their portion of the federal budget. Some projects in West Malaysia must be cancelled. The question is who and what needs to be sacrificed?

  • Or will Dato Seri Anwar spend less on security, health, education, infrastructure, public utilities, social etc given the fact he has to spend more on royalty?

  • Dato Seri Anwar must answer these tough questions so that people understand and convinced.

  • Remember, Anwar wants to maintain subsidies, refuses to increase taxes,  is against higher government’s debt and proposes spending more on royalties. How in the world is he going to juggle these finances?

  • And Sabahans still remember how Anwar as Finance Minister and Deputy Prime Minister consistently refused PBS’ request for higher royalty.

  • Pakatan Rakyat has also said that the "savings" or "proceeds" in billions from their anti-corruption drive and renegotiation loop sided deals will be used to finance the increase in royalty.

  • Yes I have heard that too. As someone who sits in MACC committee, I hope they will succeed. Any effort to abolish corruption must be supported and encouraged. I am sure Sabahans share the same view as mine.

  • But my concern is not about the effort to check corruption. It is more about Dato Seri Anwar’s rationale of including “savings from corruption eradication and renegotiating loop sided deals” as part of his government’s revenue.

  • Can Dato Seri Anwar estimate how much yearly savings he gets from anti-corruption effort? Can he comfortably project such revenue with a high level of accuracy and use the figure to plan his budget?

  • Can Dato Seri Anwar force those IPPs and highway toll concessionaires to renegotiate their agreements immediately after he swears in as Prime Minister? Or will he face prolonged and protracted battle which could take years to settle?

  • If yes, will his budget revenue projections fall short and hence disturb his spending plans?

  • I have never heard any government in this world using projected savings from corruption as the basis of preparing its national budget. That is utterly irresponsible. The budget will be in a mess.

  • Any "savings" due anti corruption drive should be construed as bonus, not to be included in the estimating government's revenue.

  • So when Dato Seri Anwar says he will finance the royalty increase from corruption eradication savings, one has to be worried.

  • My take is he will have to eventually cut allocations meant for other states in Malaysia or alternatively cut alllocations to critical sectors like education, rural infrastructure, health and security. Either way the non-oil producing states and Malaysians in general, deserve to  know the facts.

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