KUCHING, Nov 15: Second Finance Minister Datuk Amar Douglas Uggah Embas says the allegation that the state government’s borrowing is beyond its ability to repay which could lead to bankruptcy within three years is baseless and irresponsible.
He viewed the allegation as Pakatan Harapan (PH) Sarawak’s cheap publicity to gain political mileage.
“This is a blatant attempt by the said Opposition Member for Kota Sentosa (Chong Chieng Jen) to continue on harping on the issue by discrediting the state government’s budgetary system, fiscal and financial management to gain political mileage and cheap publicity,” according to Uggah in a statement today.
He explained the state government only tapped funding domestically because it has the capacity to do so and this has been recognised by financial industry players.
“The state’s healthy financial standing and our stable socio-political environment have earned us our commendable investment grade credit ratings of A-, A3 and AAA by reputable international and domestic rating houses.
“This is a clear testimony to the state’s continuous sound financial management in exercising financial prudence and discipline at all levels, at all times.
“Moreover, the state government is primarily sourcing funding for development purposes from Development Bank of Sarawak or DBoS, which is a state-owned bank. DBoS provides competitive long-dated financing to meet the state’s financing needs at the minimum cost over the long run.
“The state government will only resort to this alternative funding when in need and when there is a capacity to repay. Most importantly, the borrowing is only for strategic and productive purposes and not for financing of operating expenditure,” disclosed Uggah who is also Deputy Chief Minister.
He revealed repayments would be made on a staggered basis and spread over a periodic number of years, and provided for in the state annual budget.
Additionally, with the state government’s initiative to broaden its revenue stream via revenue re-engineering, the state’s financial capacity would be further strengthened to ensure its financial sustainability and ultimately, financial autonomy.
Uggah believed that all Sarawakians want the state to be better or on par with other states in Malaysia and would want to see Sarawak achieve developed state status by 2030.
To achieve this economic objective and accelerate the state’s economic growth, he disclosed the state government has to initially build long-awaited and much-needed physical infrastructure and amenities throughout the state.
“This is critical to lay out the foundation and open up areas for more productive economic activities that will provide greater business and jobs opportunities.
“In taking up this state development agenda, the state government is formulating strategic and prudent financial management of its fiscal resources to ensure its financial sustainability moving forward,” he added.
In meeting the financing requirement of this development, he revealed the state will allocate annual provision in the state budget as well as receive allocation from the federal budget. However, in the 2020 Federal Budget, the state will only be getting 7.8 per cent of the total federal development budget which is far from enough to cover the state’s capital programmes and projects.
“At the same time, the annual state budget is also subject to the five-year Malaysia development plan ceiling. Thus, to leapfrog the state’s strategic infrastructure development, the state would need to resort for a more robust effort in financing its development agenda via alternative financing initiatives to complement the state budget.
“Sourcing funding through alternative financing initiatives would not be necessary if the PH government fulfilled their promises to allocate 30 per cent of total annual federal development expenditure to Sarawak and remit 50 per cent of the revenue they collected back to Sarawak.
“Nobody can deny the fact that Sarawak has contributed tremendously to the national economy and federal coffer,” emphasised Uggah. — DayakDaily
