KOTA KINABALU: The Gabungan Rakyat Sabah (GRS) government has managed the state’s finances well in its first year in power but its performance is nothing to jump for joy about – the coalition has not done enough to make the economy sustainable, says an economist.
James Alin said GRS should not overuse the Covid-19 pandemic as an excuse as the people expect the state government to take different measures from its federal counterparts to bring the state out of the rut.
Cash handouts and food baskets, while helpful, were akin to “putting a bandage over a deep wound”, as they provided only temporary relief. The people needed jobs and a stable economy, he said.
“A week before Christmas (last year), chief minister Hajiji Noor tabled the 2021 budget which was designed for the ‘people’s prosperity and sustainable economy’, but have we really prospered since?” he said.
The GRS government came to power after winning last year’s state election and marked its first anniversary on Sept 26.
Alin contended that the state government had employed a “wait-and-see attitude” towards Putrajaya, which had caused unhappiness among the people who had hoped it would not be too dependent on the federal government.
“If there was nothing they could do on their own during the pandemic, why do we need a state Cabinet?” he asked.
He said the positive note was that the GRS government adhered to a prudent fiscal policy by running a budget surplus of RM178.7 million, only spending within its means.
Trade was also in surplus, with more exports than imports.
“These two indicators would increase the state’s creditworthiness in the eyes of the federal government, our only and biggest creditor by far,” Alin said.
He suggested that the state take fewer federal loans but look to international financial markets, which offer the lowest interest rates, once the value of the ringgit appreciates.
“That said, our economy is far from being sustainable. The GRS government has not done enough in attracting new foreign direct investments and portfolio investments which would lead to the creation of better and high paying jobs.
“Our gross national income would definitely be higher if and when more Sabahans are investing abroad. It’s not too late for GRS to consider investing in Sabah homegrown businesses so that they would be able to operate abroad,” he said.
Alin was also doubtful over the RM4.3 billion approved by the Malaysian Investment Development Authority (Mida) for foreign investments, as mentioned by Hajiji in the state assembly recently.
“That may be pleasing to the ear but will it materialise by the next state election in 2025? It hinges on whether the government will be able to reduce the high cost of doing business in Kota Kinabalu compared to other cities in Malaysia.”
He noted that Hajiji had said that Sabah’s gross domestic product (GDP) has contracted by 9.5% in 2020.
He said it took Sabah three decades to achieve a GDP per capita of US$5,000. “Sadly, the new middle-class Sabahans have been falling hard and reverted to where they were before, largely as lower income people. The GDP is estimated to further shrink by 15% this year.”
Alin said the unhappiness felt by Sabahans could be measured by three indices: the prevalence of inflation, unemployment and the number of people infected by Covid-19.
On the first, there is not much spending as most people have lost their jobs and remained unemployed.
On the second, the unemployment rate of 6% meant 117,800 people were jobless between January and September 2020. At the same time, there were at least 83,100 job vacancies.
On the third index, he argued that the GRS government, together with the previous and current federal governments, had failed miserably to manage the number of people infected and suffering from Covid-19.
“If people look up these scary statistics and compare it to the situation before the state election last year, was it not annus horribilis for GRS in its one year in power?” he asked.
Political economist Firdausi Suffian said the Sabah Maju Jaya development plan had covered much of the coalition’s Aku Janji election manifesto.
So far, he said, the notable achievements by the GRS government was in managing to collect RM1.25 billion in sales tax on petroleum products from Petronas and bringing in investments worth RM2.3 billion through a collaboration with a South Korean copper foil manufacturer to build a production plant in Sabah.
Firdausi also praised the state government for giving all 73 asseblymen an equal allocation of RM100,000 so they could help their constituents.
“But we have yet to see any significant progress on reforming or digitalising the state civil service,” he said. - FMT
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