KOTA KINABALU: The Federation of Sabah Industries (FSI) has decribed the newly tabled national 2016 budget as one with ‘pressure’.
FSI in a statement yesterday is of the opinion that the budget is ‘pressured’, to address people’s welfare in light of challenging economic condition, whilst trying to balance against maintaining economic growth, and yet sticking to fiscal discipline.
In the context of Sabah, the necessary measures to allow the state to ‘catch up’ with the rest of the country have been identified, and contained within the 11th Malaysia Plan.
Being the slowest growing state, with declining GDP per capita, the 2016 budget being the First of Five under the 11th Malaysia Plan time scope plays a critical role in kick-starting the process, which unfortunately has come up short, the statement read.
FSI is of the opinion that with big allocations for Bus Rapid Transit for Kota Kinabalu, Pan Borneo Highway, agro and aquaculture activities, it would seem like the first year will be on ‘internalizing’ the state’s issues.
They are much needed no doubt, and essential for better living standards with better travel and food self-sufficiency, it said.
According to FSI, Sabah’s population of three million however cannot on its own sustain a vibrant economy, and it needs to be linked with external markets and resources to reach the scale of high-income nation in five years’ time.
FSI is of the opinion that the budget has failed to ‘externalize’ the state.
With no development assistance on ports, airports, downstream manufacturing, this budget has seemingly pegged the state’s growth to tourism inflow and domestic spending, with oil and gas taking a back stand.
“It might just not be enough. The 11th Malaysia Plan (11MP) is a grand plan to allow Sabah to catch up with the rest of the nation. With the depreciated Ringgit , the high income target of USD15,000 per capita is getting further out of reach for the state.
The budget is expected to demonstrate not just short-term strategy, but putting in place medium and long-term measures to fulfil the aspirations.
With higher minimum wage, greater than expected GST draining liquidity from the market, no port capacity enhancement, no air cargo hub plan, the state will see supply chain resource constraints; making it harder to move up the value chain for our natural resources such as palm oil and aquaculture.
“A weakened internal economy, be it service based or industrial based, will not be able to absorb skilled workers; pushing down wage growth,” FSI said.
FSI added: “This budget is ‘pressured’ in light of the current economic environment. It needs to internalize issues no doubt, but without beginning to externalize measures, it has inadvertently ‘pressured’ the implementation of 11MP, as logistical linkage such as port, air hub, even railway takes time to initiate, and we now have only four more years to go after this one.”