Sarawak has been able to maintain good financial rating or investment-grade credit rating position in spite of the global financial and economic turmoil that have adversely affected credit standings of some well established rated sovereigns, sub sovereigns and corporate entities around the world. Notable are USA, France and Italy.
Moody’s has affirmed the State’s investment grade credit rating at Baa1 with positive outlook, while Standard & Poors also affirms the rating at A-with stable outlook. The domestic rating agencies namely Rating Agency Malaysia (RAM) and Malaysian Rating Corporation Berhad (MARC), have also maintained the rating at AAA.
These are commendable investment grade ratings that reflect the strong confidence of international rating agencies on the State’s sound financial position and effective financial and fiscal management. The State government deserves to be congratulated for adopting prudent financial management policy to weather through the challenging global economic environment and at the same time maintain the tempo of development at a sustainable level.
The State has again been accorded a ‘Clean Certificate’ for its 2010 Public Accounts for the ninth consecutive years. The track records show that the State Government has conducted its financial affairs in a transparent, accountable and prudent manner in line with the applicable rules and regulations. It is incumbent upon the State to continue to manage the financial resources in a more disciplined manner in order to keep up with the good track record and remain financially healthy in future.
In other words, the State must strive to ensure that the financial position remains sound and the socio-political environment continues to be stable. It is more critical for the State to sustain the commendable credit ratings in view of the efforts to attract direct and indirect investments in a bigger way in future.
As the global economic environment is anticipated to be increasingly challenging next year, it is crucial that the State must adopt prudent financial management policy to weather through it. For example, it must put in place strategic measures to strengthen financial discipline and management at every level.
Besides, the State must also continue to instill the culture of financial discipline and prudent financial management to preserve strong financial position for long-term financial sustainability. More importantly, the State must be able to maintain fiscal flexibility and autonomy and conserve resources for the future generations.
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| Miri City |
The proposed budget for 2012 is expected to yield a surplus of RM79 million on the basis of an estimated total revenue of RM4,043 million against a total ordinary expenditure of RM3,964 million. The State needs to spend within its means in order to keep sufficient financial reserves to meet future challenges. More importantly, it must continue with a balanced or surplus budget policy to ensure that the State’s financial position remains strong and sustainable in the long run.
Chief Minister, Pehin Sri Haji Abdul Taib Mahmud, in tabling the budget 2012 at the State Legislative Assembly yesterday, says the State economy is expected to record a favorable growth of 4.5% in 2011. The growth will be underpinned by the sustained expansion of private domestic demand and strong exports of commodities arising from high commodity prices and favorable regional demand. However, uncertainties in U.S. and Japan and the deepening of debt-sovereign crisis in Europe may have impact on its growth.
He says the private investment activities are expected to expand by 5.4% in 2011 partly driven by the government strategies in encouraging the private sector to spearhead the economic growth especially with the implementation of SCORE. The strong growth for the first half of 2011 is being reflected in several key investment indicators. These include the import of capital goods and intermediate goods that grew by 12.0% and 27.5% respectively.
Pehin Sri Abdul Taib says inflation is expected to moderate in line with the expected slowdown in the global economy. The government, on its part, has taken various measures to keep it under control. However, high global commodity prices that feed through the supply chain may influence the price of consumer products. The rate of inflation at the national level inflation is 3.0% to 3.5% and at the State level, remains below 3.0%.
Admittedly, some prices of basic necessities have gone up recently. This is particularly so due to the continued high fuel prices and recent price hikes for food in the global markets, which will have impact on the prices of basic necessities. However, there is no reason for the Consumer Price Index to shoot up sky high.
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| Bintulu |
Pehin Sri Abdul Taib assures that the government is sensitive to the impact of inflation on the people, those in the lower income group in particular. The State Government is always supportive of efforts taken by the Federal Government to cushion the impact of inflation on the people, who, on their part, should be prudent in their spending habits. Besides, local businessmen and industrialists must try harder to be more creative and innovative and be more efficient and productive to ensure that their products can be more competitive in the global market.
He says it is critical for Sarawak, with an open economy and susceptible to the global and regional economic volatilities, to adopt sound economic and financial policies. A healthy level of reserves is essential to provide fiscal flexibility in time of economic difficulties. With a strong financial position, the State, as in the past, should be able to ride through global economic turmoil in future. The State Government will continue to put in place strategic measures aimed at strengthening the financial management and discipline in every aspect.
The 2012 budget, the second year budget under the 10th Malaysia Plan, will among other things focus on the development of SCORE and rural areas, increasing the value-add of tourism sector particularly the MICE market, modernizing the agriculture sector, developing efficient transport and logistics system and developing quality and skilled manpower.
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| Kuching |
Its objectives and strategies are driven by productivity and efficiency. It is imperative that concerted efforts must be made to optimize the use of available resources and reduce wastages. Besides, it will also induce the private sector as the main engine of growth. The burden of development in the past has fallen heavily on the public sector. Hence, it is becoming very crucial that the private sector should be involved actively in stimulating and spearheading investment for the development of the economy.
Pehin Sri Abdul Taib, who is also the Minister of Finance, says about 70% of the proposed budget will be for development and 30% for operating expenditure. As a developing state, it is imperative that Sarawak must continue to have a budget of pro-development. However, it must also have an adequate level of expenditure to stimulate a desirable level of economic activities and growth during the year.
Understandably, Budget 2012 continues to give priority to economic activities and productive sectors such as commerce and industry, public utilities, transport and communications, and agriculture and land development. Besides, it gives special focus to further enhance the efficiency and effectiveness of the State’s financial management as well as the delivery system, continue with the strategy to keep the operating expenditure under stringent control.
Generally, the State has been able to manage the resources effectively as well as maintain unity among people of diverse ethnic and religious backgrounds. This is attributable to the resilience and strength of the people, political stability and social cohesiveness.
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| Mukah |
In this regards, the people must continue to act with a sense of dedication in the common efforts to achieve the objectives of National and State development within the stipulated framework. They should not be distracted by political bickering and arguments over petty issues which do not benefit anybody.
Obviously, the pragmatic and flexible management approach of the State government over the years has enabled Sarawak to remain competitive and enhance its resilience in facing challenges. The common obligation is to maintain economic growth in order to transform and diversify the economic base and accelerate the pace of development both in urban and rural areas.
Ultimately, the success will provide more extensive and rewarding employment and business opportunities for the people towards the year 2020 and beyond.
benuasains
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