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      13 March 2011  

 

SEDIA ANNUAL REPORT AND SDC PERFORMANCE DURING THE FIRST PHASE FROM 2008-2010: THE ROLE OF SEDIA

 

KOTA KINABALU: Recently, there has been much debates, discussions and interests from various stakeholders regarding the performance of SDC and the role of SEDIA, not only from among policy makers, government officers, corporate leaders,  foreign diplomats and business delegations, but also NGOs, intellectuals and the ‘rakyat’ as a whole. It goes without saying that SEDIA, as the One-Stop Authority driving SDC owe an explanation to the ‘rakyat’ in particular, more so in view of the fact that, roadshows explaining the concept and programmes of SDC have been organised throughout the State following the launching of SDC on 29th January 2008. 

Notwithstanding the perspectives and stance of these discussions and debates, this development is indeed very much welcome.  For one, it gives us in SEDIA as the One-Stop Authority co-ordinating the expeditious implementation of all SDC projects, another avenue and an opportunity to disseminate correct information concerning the progress and development of SDC as well as engaging directly with the public.  Often times however, there have been many confusions, half-truth and incorrect information going around about the progress of SDC, especially if the sources or authors remain unanimous.  SEDIA therefore like to take this opportunity to put the record straight on the performance of SDC, especially with the completion of the First Phase of SDC, covering the 2008-2010 period.

As a matter of fact, SEDIA welcome any inquiries or engagements concerning the progress of SDC, investment opportunities, business and employment opportunities, policies and procedures and other related matters. In this regard, SEDIA have been participating in roadshows, exhibitions, dialogues and conferences in order to engage directly with stakeholders as well as disseminating correct information concerning the SDC progress, investment prospects, employment opportunities and related policies, incentives and procedures. The release of SEDIA Annual Report for 2009 today hopefully will also assist in providing authoritative information regarding the progress of SDC projects and the role of SEDIA.

 launchingAnnualreport2009_1

SEDIA Chief Executive Datuk Yaakub giving an explanation to His Excellency Fidel Ramos
 and Datuk Raymond Tan on the SEDIA Annual Report 2009 during its launch

 

SDC BLUEPRINT

First Phase: 2008-2010

 Just to recap by way of a summary, under the SDC Blueprint, the SDC will be implemented in three phases, Phase One being the ‘boot up’ phase. Here, our main focus is in laying down the foundation for growth while investing in talent. Through this focus, our objectives include clarifying and communicating our vision and strategy for Sabah to all stakeholders; setting off and intensifying economic initiatives; plugging gaps in infrastructure; and implementing social and environmental initiatives, especially poverty eradication programmes.

Second Phase: 2011-2015

 In the Second Phase of the SDC, the main theme is to accelerate economic growth by attracting greater private investment and to provide specialised infrastructure with first-class human capital. In this timeline we anticipate tourism to surpass the 10% share of GDP, the creation of a critical mass of Small and Medium Enterprises (SMEs) serving downstream manufacturing companies, and to have agri-businesses that participate in high value agriculture. The key measure for this phase is for GDP to double by 2015 or for it to reach RM32billion, from 2006.

Third Phase: 2016-2025

The third and final phase of the SDC is all about expansion; the end goal is for Sabah to emerge as one of the leading economic regions in Malaysia first, then Asia in the longer term, especially in resource-based industries. With this in mind, we envision Kota Kinabalu to become one of the most liveable cities in Asia, an emerging metropolis which draws talent, capital and companies. The SDC is not only about economic prosperity of course; we also aspire to have people living together in harmony regardless of race, language or religion. A key measure is for it to reach first or second on the liveability index in the home market and Top 5 in the region.

 

SDC PERFORMANCE DURING THE FIRST PHASE

Project Implementation

A key measure of success for the First Phase is in ensuring that all flagship SDC projects, such as POIC Lahad Datu, POIC Sandakan, Sandakan Education Hub, Keningau Integrated Livestock Centre, Sabah Agro-Industrial Precinct, Agropolitan Projects and major SDC infrastructure projects have commenced. As a matter of fact, all the SDC projects worth RM1.27 billion from the allocation given for SDC projects during the First Phase had been tendered out and awarded to Sabah-based contractors by 30th September last year.  All of the SDC projects have been awarded through an open tender procurement process, reviewed and approved by SEDIA Tender Board in accordance with the Treasury Instructions of the Ministry of Finance. The tender process has been carried out in a transparent manner through publications in major newspapers. 

Investment Performance

Total investment from private sector and Government-Linked Companies during the First Phase was set at approximately RM11.3 billion. The SDC managed to secure a recorded RM30.06 billion in investments during the First Phase, whereby RM11.95 billion was realised. This figure surpasses the target which was set at RM11.3 billion.

New business and investment opportunities have also been generated arising from the implementation of the various SDC projects as discussed earlier. The resulting vibrant investment climate has in no small measure boosted further investors confidence and encouraged substantial investment mobilised in Sabah.  SEDIA has been receiving enquiries and visitors from foreign investors and embassy officials regarding investment opportunities in SDC. SEDIA is now in the midst of negotiation with potential investors from Brunei, Middle Eastern Countries, the United States, the United Kingdom, Australia, China, India, South Korea and Japan.

Economic Performance

The state’s economy has proven to be quite robust and resilient since the launching of the SDC on 29th January 2008.  At the height of the recent global economic downturn, the growth of the Advanced Economies declined to 0.2% and -3.2% in 2008 and 2009 respectively, while Malaysia recorded 4.7% and -1.7% in the same years.  Sabah on the other hand registered 7.7% in 2008 and managed to remain positive at 3.3% in 2009.  It is pertinent to note that prior to the launching of SDC, while Malaysia enjoyed robust 6.5% GDP growth in 2007, Sabah managed to secure only 4.2% in the same year.

We are expecting the state’s economy to ride over the global economic rebound in 2010 and strengthen further in 2011 driven by government spending, buoyant commodity prices as well as new investments, with annual GDP growth expected to average at more than 7% during the period. Under the SDC Blueprint, the average annual economic growth during the plan period was targeted at between 7%-8%. The 2008 and 2009 figures have indicated that we are on track to achieve our target for the First Phase of SDC.

Employment and job opportunities

There is no doubt that the implementations of the SDC projects as well as new investments opportunities generated have directly created new business and employment opportunities for professionals such as engineers, architects, quantity surveyors and accountants as well as both skilled, semi-skilled and unskilled construction workers. In terms of multiplier effect generated to the economy, it is estimated that every RM1 spent will generate at least RM5 into the local economy and the implementation of the various SDC projects have generated new job opportunities directly, as well as indirectly through the multiplier effect. 

In terms of job opportunities and employment creation, about 32,900 new jobs were created in 2008 following the launching of SDC; and more than 40,000 new jobs in 2009. In terms of unemployment, we are expecting unemployment rate at between 4.9% and 5.5% annually during the First Phase of SDC.  Sabah’s unemployment rate stood at 5.5%, 4.9% and 5.5% for 2007, 2008 and 2009 respectively. The full year statistics for 2010 unfortunately has not been released yet.

By way of comparison, while the average unemployment rate in the US was at 5.7% over the period from 1948-2010; its unemployment rate was 5.4%, 5.7% and 7.7% in 2007, 2008 and 2009 respectively.  The UK unemployment rate was at 4.6%, 5.8% and 9.3% over the same years, while Germany has an average unemployment rate of 9.73% over the period from 1991-2010. In terms of unemployment and job opportunities, it is clear that Sabah has fared very well following the launching of SDC.

Going forward, given the robust economic growth expected for the 2010-2011 period, we estimate the unemployment rate to be within the range of 4.9% to 5.5%, which is very respectable given the relatively higher unemployment rate in the Advanced Economies as discussed earlier.

Socio-Economic Performance

Looking at the performance of household income thus far as a key indicator of socio-economic performance,  Sabah’s mean gross monthly household income improved to RM3,102 (in 2009) from RM 2,395 in 2004. The average growth rate of income was recorded at 5.3% over the period from 2004 to 2009.

The poverty incidence declined from 24.2% in 2004 to 19.7% in 2009, and hardcore poverty almost eliminated by the end of the First Phase in 2010. This simply means that the average households have more money to spend.

 tongod_agropolitan

Sabah Development Corridor's booth during the launching of Agropolitan Lalampas, Tongod

 

THE ROLE OF SEDIA

There can be no question that crucial to the success of the SDC is in having SEDIA, the implementing agency, established and achieve full operational status. In this regard, SEDIA affirms that it has been fully operational by October 2009. In order to effectively carry out its responsibility, SEDIA is fully aware of the need to be staffed by not only well-qualified, talented, reliable and competent officers, but also having officers with proven track records,  high degree of integrity, dedication and commitment to serve the State and the Nation. 

SEDIA is staffed by well qualified management team; experienced professionals such as engineers, quantity surveyors, accountants and lawyers; various levels of administrative executives and supporting staff.  SEDIA has a good mix of senior management and professional staff who are academically well qualified with excellent track records, experienced consultants, and tested professional practitioners.  As a matter of fact, all senior management members and professional staff have more than ten years experience in related field with most are qualified academically at masters and doctoral level.  The senior management and professionals have been drawn from among talents who had served overseas, public-listed companies, GLCs, consulting and research bodies, construction companies, accounting firms, financial institutions, universities and others. 

It is a fact that SEDIA was established and took the full responsibility to move SDC in 2009, at the height of the global economic downturn, a time when the world economy was in a tailspin and registering its most severe contraction since the Great Depression in the 1920s.  It has indeed been most challenging for SEDIA.  The fact that SEDIA had by and large, been able to deliver and achieve its set objectives by the end of the First Phase of SDC indeed is a testimony to the commitment, dedication, integrity, capability and competence of SEDIA staff at all levels. And above all, what is most significant is that the Auditor General, as stated in the SEDIA 2009 Annual Report has given a clean bill of health to SEDIA’s financial management performance, and agreed to certify SEDIA Audited Account for 2009.

 

CONCLUSION

In the performance of its responsibility, SEDIA has been transparent, uphold a high standard of corporate governance, and complied with the established policies and procedures. There was no short cut. The SDC clearly has had a generally positive impact on the state’s investment climate, economic and income growth, employment opportunities and socio-economic well-being.

It is also pertinent to highlight that SEDIA’s primary role is to serve as a catalyst to transform Sabah, via the SDC initiative into one of the leading economic regions in Asia. To achieve this objective, it seeks to complement and supplement other government initiatives, and facilitate private sector participation, especially in the designated economic clusters, while ensuring that the ‘rakyat’ as the main stakeholder will benefit from the surge in development activities. -MEDIA SDC

 

 

         
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