Sabah may miss 2020 high income status target

Sabah

KOTA KINABALU: Sabah, as things stand, may not only not make it into the high income category by 2020, it stands in danger of being relegated to the bottom among the three worst performers, warned Sabah Deputy Chief Minister and Industrial Development Minister Raymond Tan. “Eight states will not make it as high income states.”

“Sarawak will make it at RM64,082 GDP per capita.”

Sabah, at RM27,496 GDP per capita, will be one of the states falling below the threshold level of RM50,000, conceded Tan. “The other seven states are Johor (RM42,355); Pahang (RM41,834); Perak (RM36,434); Terengganu (RM33,335.17); Perlis (RM28,322); Kedah (RM25,708); and Kelantan (RM16,055).”

In short, Tan was implying that Malaysia cannot be declared as a high income nation by 2020 as highly anticipated.

Tan was giving an industrial update on the eve of a meeting with the Federation of Sabah Industries (FSI) on the industrialization of the state and the National Cabotage Policy (NCP).

“In Sabah, the average monthly wage is RM1,400 while that in the peninsula is RM2,300 per month,” explained Tan. “In order for Sabah to hit the threshold of RM50,000 GDP per capita, the state would have to grow at 19 per cent per annum.”

“This is an impossible figure considering the target growth rates in Kuala Lumpur and Selangor, under the 11th Malaysia Plan (2016-2020) were at 7.5 per cent and 6.9 per cent respectively.”

He agreed that a growth rate of six to seven per cent per annum could be considered good. “For Sabah to surpass 4.6 per cent GDP growth, for example, the state would have to increase productivity and export, invest in the oil and gas industry and build more ammonia-urea plants and export the output. Sarawak is 20 years ahead of Sabah in the oil and gas industries.”

“Gas can be turned into chemical fertilizers and sold to plantations.”

The bottomline for Sabah, stressed Tan, would be diversification into downstream activities for backward and forward integration and value-added manufacturing. “Singapore, for example, has no raw materials. But it imports these and adds value to them before re-exporting for a good value.”

“Singaporeans are wealthier, as a result. There, workers make up 50 per cent of the fortune distribution while the 50 per cent went to the employers and the government.”

In Malaysia, said Tan, the employers had 40 per cent of the fortune distribution, while workers and the government had 30 per cent each respectively.