Empower Sabah on trade ties with Kalimantan, govt told

 

Kinabatangan MP Bung Moktar Radin said Putrajaya should let the state government develop economic ties with Indonesia independently.

KOTA KINABALU: Sabah deputy chief minister Bung Moktar Radin’s call for the federal government to empower the state in developing economic ties with Indonesia has received the support of economists.

They believe Sabah should move quickly in order to make up for lost time if it wanted to capitalise on the potential boom coming from Indonesia moving its capital to East Kalimantan.

Bung told the Dewan Rakyat recently that Indonesia was already working on major highways in Kalimantan with the nation moving its capital to Borneo in the near future.

He said Putrajaya seemed to be unaware that Indonesia was doing this and was also not doing anything to leverage on the possible economic benefits, especially for Sabah and Sarawak.

“If the federal government thinks this is down to the relationship between Sabah and Indonesia, then empower us. Give us the power to negotiate. So far, there’s no movement from Putrajaya on the matter,” Bung said.

Sabah UiTM senior lecturer Firdausi Suffian said the federal government appeared to be inflexible when it comes to trade relations, unlike Indonesia where various administrative functions, including trade-related activities, are already being de-centralised to its regional or provincial governments.

However, he advised the Sabah government to maintain the status quo while continuing to apply the necessary pressure on Putrajaya.

“There must be concerted efforts from the state Cabinet and assemblymen,” he told FMT.

“But it is essential for the state to come up with a strategic plan to forge fruitful trading relations with Kalimantan. The state needs an economic plan, not just empowerment.

“When venturing into a new market, the role of the state is crucial in order to send a signal to the private sector and also instill confidence on doing business.”

Firdausi also called for the Sabah government to first tell the federal government what they want.

“Then streamline the various trade-related activities with Putrajaya and decide which are the activities the state could be empowered to do. This is not difficult. It’s just a question of priority.

“If the government can come up with an agreement with Pakatan Harapan, then they can also streamline some of the trade-related activities or decentralise them to the state,” he said.

Economic spillover

James Alin said having some connectivity from Kalabakan in Tawau to Kutai Kartanegara, a regency in East Kalimantan, which will host the future Indonesian capital, would bring some economic spillover, especially in the east coast districts of Tawau, Lahad Datu and Semporna.

Alin, a Universiti Malaysia Sabah (UMS) senior lecturer, said the Indonesian government is already planning to connect East Kalimantan and North Kalimantan to Sabah.

“At the moment, the gross domestic product (GDP) of East Kalimantan and North Kalimantan combined is much larger than Sabah’s GDP because they produce more oil than us,” he told FMT.

“Not opening our borders is a ‘beggar thy neighbour policy’. It’s not good for us as we are going to lose more.

“For now, North Kalimantan is still depending on Tawau for goods but this is going to change because Indonesia is going to build mega seaports in East Kalimantan and east Sulawesi, which is separated from us by the Makassar Strait.”

However, he said, Sabah is more developed than East Kalimantan and North Kalimantan now and therefore is in the best position to take advantage of Indonesia’s future plan.

According to Alin, the state government must find other ways to open Sabah’s borders to the two Indonesian provinces as matters related to customs, immigration, quarantine and security fall under federal jurisdiction.

He urged the Sabah government to start upgrading all its seaports in Tawau, Sandakan and Semporna, which all belong to the state, so that more export and import activity can take place with East Kalimantan and North Kalimantan.

“This would allow a larger volume of barter trading, which is also under state jurisdiction, between us and them.

“Our oil and gas workers must also be trained and certified up to international standards so that they can work there,” he said.

Alin added that the Sabah government must also explore avenues with the East Kalimantan and North Kalimantan governments to create and develop an industrial zone together.

“They will be very happy to work with us on friendly terms because of close relationships between people on both sides of the border,” he said.

Quoting an example of such ties, he said the state of New Mexico bypassed the US government in deciding to work with the Mexican states of Chihuahua and Sonora under the Maquiladora initiative, which started in the mid-1960s.

Briefly, the programme allows foreign companies to open and operate manufacturing-related businesses in Mexico and later export those goods to other countries while making the most of the country’s labour and tax benefits offered under the initiative.

“It is still doing well today. Other than that, the US state of California works closely with the Baja California state of Mexico to develop coastal tourism together to avoid bureaucratic problems with the US federal government,” he said.

Chief minister Hajiji Noor had previously said the federal government has given the nod for the construction of the road connecting Serudong in Tawau to Simanggaris in Indonesia.

This is following the move to relocate the Indonesian capital from Jakarta to East Kalimantan.

Expected to cost RM600 million, the project will include a customs, immigration, quarantine and security (CIQS) complex at the Serudong-Simanggaris checkpoint.- FMT