Abang Johari: Alternative financing initiatives adopted globally, sustainable platform

Abang Johari (third right) and his wife Datuk Amar Juma'ani Tun Tuanku Bujang (in blue head scarf) together with cabinet members after the adjournment of the DUN sitting.

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By Karen Bong

KUCHING, Nov 13: Chief Minister Datuk Patinggi Abang Johari Tun Openg has slammed opposition members for equating the state’s alternative financing initiative to that of 1MDB.

Leveraging on alternative financing initiatives, which has been practised by many countries in the world including Malaysia, he pointed out, was a sustainable platform to adopt to facilitate and expedite the realisation of the state’s development agenda under the five-year Malaysia Plan.

“He (Kota Sentosa assemblyman Chong Chieng Jen) equates us to 1MDB (1Malaysia Development Berhad), which is entirely different but then again the PH (Pakatan Harapan) government also has off-shore loans and subjected to international lease through Samurai. Then they used that money to finance projects.

“For Sarawak, we have our own bank (Development Bank of Sarawak or DBoS). Because we have our own bank, it is easier for us to pay based on the progress of the projects.”

Earlier in his winding-up speech, he explained that securing financing facilities for long-dated financing from DBoS to finance socio-economically important projects such as water supply, power supply, roads and bridges as well as other sectors such as digital economy, tourism and convention infrastructure, oil and gas, and agriculture, will provide the state with competitive rates, long tenure and limited recourse.

“That’s why I asked them to refer to these two books by Brett King and another journal produced by The Hong Kong Institute of Bankers,” he told the media after the adjournment of the Sarawak Legislative Assembly (DUN) sitting today.

Abang Johari also gave assurance he would check on the allegation by Chong that the Sarawak government has acquired an offshore bond worth USD1.6 billion which was guaranteed by the state government.

“At the moment, we do not have any offshore loan but we have domestic loan with DBoS for which we don’t use any guarantee,” he added.

Earlier in his winding-up speech, Abang Johari said it was most regrettable to note that Chong, a Sarawakian and a Deputy Minister in the Federal Cabinet representing the rakyat of Sarawak, had made ‘misleading statements and allegations’ on the state’s ‘sincere initiatives’ to obtain funding from other legitimate means, worst still describing it as a David Copperfield act.

“The Honourable Member for Kota Sentosa should be well aware of the simple fact that 1MDB’s businesses and financial structures are clearly operated on a different platform and objective altogether.”

He pointed out that 1MDB was a corporation with the business model of buying and investing in strategic assets without having a strong balance sheet and cash flow, requiring guarantee from the federal government to support its huge borrowings activities.

“If we are to apply this unsubstantiated argument of the Honourable Member of Kota Sentosa, then we can claim that PH government’s financing model was similar to 1MDB’s in the making because PH government was using its Special Purpose Vehicles (SPVs), such as Dana Infra Nasional Berhad, to finance its big and mega infrastructure projects.

“Also recently, the PH government has issued a Samurai Bond of 200-billion-yen equivalent to RM8 billion. The proceeds of this bond issuance are to be used for financing projects, which among others include building of schools, hospitals, roads and utilities,” he added.

Abang Johari reiterated that due to the many competing demands for state financial resources, a conventional financing model was no longer a viable option in order to propel Sarawak’s transformation towards a developed state by 2030.

“We have to look for other financing models that can help achieve our development goals, particularly in the area of physical infrastructure and amenities.

“We have to be creative; we have to develop new mechanism and even explore unchartered waters if necessary — thus this alternative financing initiative that I and my Cabinet colleagues are rigorously pursuing,” he said.

Abang Johari reiterated that alternative funding will only be sought by the state when in need and when there was a capacity to repay, and most importantly, borrowing only for strategic and productive purposes and not for financing of operation expenditure. — DayakDaily