Budget 2012 Final

8/2/2019 Budget 2012 Final

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Executive Summary

The priorities of the Sarawak state budget have been misplaced and misaligned for far toolong. The many years of revenue obtained from the exploitation of natural resources in the

oil and gas as well as the forestry sectors have not been spent wisely. The over-centralisation of the revenue sources in the ministries controlled by the Chief Minister,notably the Ministry of Finance, has contributed to a tremendous lack of transparency in howthis money is being spent. Furthermore, the state government has not taken significantsteps towards reducing the states dependence on natural resource exploitation as keyeconomic drivers. Instead, the Sarawak Corridor of Renewable Energy (SCORE), the newdevelopment strategy of the BN state government, continues to rely on the exploitation ofnatural resources, this time, on hydro-electricity, despite the significant human relocationand environmental destruction costs.

Pakatan Rakyat Sarawak proposes an alternative budget that promotes financialtransparency and accountability, that decentralizes power to the local level, that reallocatesexpenditure away from the Ministry of Finance, that targets social assistance towards themarginalized and that slowly shifts the economy away from natural resource exploitation.

Pakatan Rakyat Sarawak aims to achieve these objectives by emphasising three keythrusts:

(I) Economic Democratisation through Fiscal Decentralisation and IncreasedTransparency and Accountability

(II) The Prioritization of People through Restructuring & Reallocation

(III) Empowerment & Enablement through Economic Capacity Building

1. Thrust I: Economic Democratisation through FiscalDecentralisation

PR Sarawak will cut the Ministry of Finances allocation from RM2 billion to RM500 millionand reallocate these funds to other 10 Ministries. This will increase the efficiency of the otherministries, many of which have to wait for approvals from the Chief Ministers office beforeprojects can proceed. This will also increase transparency and accountability since ad-hoclarge scale projects cannot be approved by a single dominant ministry and individualministries will have to account for ministry related projects.

A significant amount of wastage and inefficiencies have also occurred as a result of theover-centralization of resources under the Chief Minister. Many ill-advised contracts havebeen awarded without undergoing a comprehensive tender process, many of them tocompanies with links to the Chief Minister and his family. PR Sarawak will allocate RM10million to independent auditors and regulators to investigate and review these contracts.The contracts to build a series of dams under SCORE will also be reviewed. As such, PRSarawak will put a stop to all dam building activities until the completion of a thoroughsurvey of NCR land boundaries and of comprehensive Environmental and Social ImpactAssessments (EIAs and SIAs) in the areas affected.


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PR Sarawak will also increase funding for the local authorities from RM180 million (RM100million to the Bintulu Development Authority and RM80 million to the other 24 localauthorities) to RM450 million to improve the provision of local services including roadrepairs, rubbish collection and street lighting. This funding will be distributed according tothe population and area which falls under the jurisdiction of respective local authorities.

To ensure greater local accountability of this increase in local expenditure, PR Sarawakproposes local elections for all 25 local authorities in the state. Having local elections isonly part of the process which will lead to greater transparency and accountability on howmoney is spent and decisions are made at the local level. Anti-corruption agencies such asthe MACC also have to do their part along with a free media, political parties and non-government organizations and individuals. PR will allocate RM20 million for the conductof local elections.

2. Thrust II: The Prioritization of People through Restructuring and

Reallocation

The following allocations highlight the key strategies of PR Sarawak under this thrust.

The allocation ofRM80 million to eradicate hard core poverty by topping up the wages ofthe hardcore poor earning less than the food PLI of RM860 per month. This will affect20,000 households.

The allocation of RM20 million to provide a social safety net for poor households whenfacing emergencies such as unexpected illnesses and pregnancies, accidents in the family,extra education related expenses and other unexpected expenses. This will help close to30,000 households.

The allocation ofRM117 million to provide an RM600 bonus to senior citizens aged 60 andabove. This will benefit approximately 195,000 senior citizens.

The introduction of an RM900 minimum wage policy which will be gradually introduced,firstly in the state government and state agencies and then to logging and plantationcompanies before being rolled out to the other companies in the state.

The implementation of a Fair Wage policy where the state will pay fully for the EPFcontributions of those earning less than RM900 per month and for 5% of the EPFcontributions for those earning between RM901 and RM1,500 per month. This will cost

RM300 million for approximately 250,000 individuals. RM2 million will be allocated toconduct activities to sign up individuals for EPF accounts.

The allocation of a sum of RM6 million to carry out a pilot project to establish communitycentres for the elderly with housing options in four cities: Kuching, Sibu, Miri and Bintulu.

The allocation of RM10 million for financial assistance to the disabled community and afurther RM10 million to various state agencies to intensify efforts to help persons withdisabilities to lead independent lifestyles, to have sustainable livelihoods and to achievefinancial security.

A sum ofRM30 million will be allocated for upgrading, repair and renovation work for low


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cost houses which have serious defects and shortcomings

RM10 million will be set aside for a development fund which will be used for the running ofsocial programs by all the NGOs, associations and charitable organisations.

Another RM10 million will be allocated for places of worship to carry out repairs andupgrading works.

Under Thrust II, a total of RM598 million has been identified to be allocated to increase thequality of life of those at the bottom of the economic ladder and for marginalise communities.

3. Empowerment and Enablement through Capacity Building

These allocations have been identified under Thrust III which aims to empower and enablelocal communities by building economic capacity.

RM50 million will be allocated for a development fund for the Ministry of SocialDevelopment and Urbanisation, out of which, RM40 million will be spent to manage andprovide quality and functional sports facilities as well as to organise programs to promotesports in the State. The remainder RM10 million will be allocated to manage and provideinfrastructure for social development and organise programs for social development in theState especially among the youth.

RM25 million will be set aside for Chinese vernacular and Missionary schools out of whichRM10 million will be allocated to Chinese primary schools, RM10 million to Chinese middleschools and RM5 million to Missionary Schools. In addition, 5 plots of land of a minimum of6 acres each will be set aside in major cities and towns for building Chinese vernacular

schools and mission schools, where there is local demand.

To assist and promote Small and Medium Industries (SMIs), PR Sarawak proposes toallocate a sum ofRM100 million for low-interest loan facilities to partly finance those whogenuinely intend to set up factories in industrial estates. A further RM50 million will beallocated to provide maintenance and upgrading work for infrastructure needs in the existingindustrial estates.

To promote the further upgrading of industrial skills, PR Sarawak proposes an allocation ofRM10 million to provide partially subsidised employees sponsored by SMI companies forpost-graduate courses and technical training.

PR Sarawak proposes a sum ofRM20 million for the implementation of the action steps toimprove forest management policies including stepping up enforcement against illegallogging activities and the importation of illegal logs, establishing reforestation and replantingefforts and limiting the issuance of logging licences.

PR Sarawak will continue to work together with the Federal government and with theGovernment Transformation Program (GTP) team in charge of the Rural Basic Infrastructure(RBI) National Key Results Area (NKRA) for rural electrification projects and to supply oftreated waters to the rural areas. To help achieve the objectives set out under the RBINKRA, an allocation ofRM250 million to the Ministry of Public Utilities has been identified.


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PR Sarawak proposes that, for a start, a sum of RM20 million be allocated to promotetourism in Sibu and central Sarawak and a further sum of RM20 million to be allocated topromote the tourism products in other less popular destinations in Sarawak including thosein northern Sarawak.

In addition, PR Sarawak proposes an allocation of RM100 million to upgrade and improvethe facilities of the present tourism products including those in one of the two UNESCONatural World Heritage Sites in Malaysia, the Gunung Mulu National Park.

PR Sarawak will also set aside RM3 million for the establishment of rubber cooperatives toenhance the productive capacity and capital of the many small holders which include themany among the Malay/Melanau community and some among the Dayak community.AnotherRM2 million will be allocated to provide capital for fishermen, many of them in theTanjong Manis area, to upgrade their fishing boats and fishing equipment so that theirfishing yields can be increased. RM1 million will be allocated to sago farmers for replantingschemes to replace aging sago plants.

A total ofRM651 million has been identified under Thrust III.

4. Specific Programs for the Dayak Community

PR Sarawak proposes the following allocations for programs which are targeted at theDayak community:

(i) The establishment of a Dayak Welfare Fund to the tune of RM100 million. This fund willbe utilised for medical assistance to poor Dayaks, to rebuild homes destroyed by fire andother natural disasters, to care for abandoned Dayak senior citizens, for the supply of water

tanks, pumps and pipes for longhouses and to repair dilapidated homes.

(ii) RM20 million will be allocated to the Ministry of Tourism and Heritage to preserve Dayakcultural heritage and traditions including the building of a Dayak Cultural Centre, collectionand publication of oral traditions and histories, development grants for academic researchinto Dayak cultural practices and traditions and incentives for the publication of Dayakliterature.

(iii) RM80 million will be allocated to the Ministry of Planning and Resource Management tocarry out the perimeter survey, to issue land titles to these landowners and for legalassistance in legal disputes with plantation groups and other companies which may alsowant to stake claims to this land.

(iv) An additional allocation of RM250 million will be provided to the Ministry ofModernization of Agriculture to provide financial and technical support to the Dayakcommunity for crop planting activities on NCR land.

(v) RM80 million is proposed to establish a SADA Entrepreneur Development Unit1 underthe Chief Minister's Department with the expressed objective to develop the entrepreneurskills of the Dayaks in the marketing and sales of agriculture produce and retail goods.

1 SADA means One Voice in the Iban language.


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(vi) To uplift the education level of Dayak students and to ensure Dayaks are competent invarious professional and technical fields, a SADA Education Fund of RM120 million isproposed. This includes a special scholarship for Dayaks from poor families to enjoy tertiaryeducation.

A total ofRM650 million is therefore identified under these initiatives which will benefit theDayak community.

The State Government will apply for a special grant of RM350 million from the FederalGovernment to set up a Special Trust Fund for the further development of the Dayakcommunity.

5. Alternative Budget Figures

With revenue estimates at RM4,500 million, the Supply Expenditure estimates at RM1,301.5million and Development Expenditure estimates at RM2,983.5 million, PR Sarawaks

Alternative Budget 2012 will have a surplus of RM215.0 million. This is a cleardemonstration that the resources of the state government can be allocated equitably,efficiently, effectively and transparently without putting the state in a deficit situation.

6. The Budget and SCORE

The poor record of the BN state government in managing infrastructure projects, both largeand small, does not provide sufficient grounds for any rational minded person to haveconfidence in SCOREs ability to deliver the expected benefits at a reasonable cost to thestate.

In light of the many problems associated with SCORE, PR Sarawak will put a stop to all ofthe existing dam projects and instead focus on a more sustainable economic developmentpath that focuses on increasing the manufacturing capacity in the state, empowering andenablingowners of NCR land, expanding the service sector especially the tourism industryand on improvingfood security and increasingagricultural yields.

7. Timeline and Process

The implementation of the policies outlined in this Alternative Budget will allow allSarawakians to enjoy the rich resources of the state. It will expand the middle class whichwill solidify the foundation of Sarawak's economic growth. More importantly, it willempower Sarawakians to exercise full autonomy and rights over their own land.

Although these policies cannot be put in place with immediate effect, PR Sarawak isproposing them with the clear intention of implementing most, if not all of them, when PRwins power at the state level. It is also a useful means of forcing the BN to address theshortcomings of their own state budget as well as for PR Sarawak to receive constructivefeedback on some of the details of our own Alternative Budget.

Of course, many more policies which will bring additional benefits to the residents of


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Sarawak will be implemented when PR takes over power at the federal level. PR iscommitted to the policies outlined in the federal Alternative Budget 2012 including theimposition of a minimum wage, payouts to Senior Citizens, poor households, qualifiedhomemakers and childcare allowances. PR remains committed to its promise of increasingoil and gas royalties payable to the Sarawak state government from the current 5% to 20%,which will increase the state budget by approximately RM3 billion.

This is yet another significant step for PR Sarawak, which follows on the successful showingof the opposition coalition in the Sarawak state elections, held in April this year. PR inSarawak remains focused on raising these issues in the run-up to the upcoming generalelections. PR Sarawak will also continue to build its long term capacity in preparation forthe next state election where it hopes that the electorate will have sufficient confidence inour ability and capabilities to vote us to take over power at the state level.


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Contents

Introduction ........................................................................................................................... 10

Overview of Sarawaks Public Finances and Economy...................................................... 11

Thrust I: Economic Democratisation through Fiscal Decentralisation ........................... 12

1.1 Removing the Black Hole within the Ministry of Finance ....................................... 14

1.2 Investigation into Past Financial Scandals and Review Existing Unfair Contracts and

Non-Feasible Projects ......................................................................................................... 15

1.3 Greater Financial Autonomy for Local Authorities ...................................................... 16

1.4 Local Government Elections ......................................................................................... 17

Thrust II: Prioritization of People through Restructuring and Reallocation ................. 19

1.5 Eradication of Hard Core Poverty through grants ........................................................ 19

1.6 The Provision of a Social Safety Net ............................................................................ 21

1.7 Provision of a Senior Citizens Bonus ........................................................................... 22

1.8 Minimum Wage Rate and Fair Wage System ............................................................... 22

1.8.1 Minimum Wage .................................................................................................... 23

1.8.2 Fair Wage Program ................................................................................................ 23

1.9 Caring for Senior Citizens and the Disabled ................................................................. 24

1.10 The establishment of a Dayak Welfare Fund ............................................................ 25

1.11 Affordable and Decent Housing ................................................................................ 25

1.12 Recognising the Role of NGOs ................................................................................... 26

1.13 Preservation of Dayak Culture .................................................................................... 27

Thrust III: Empowerment and Enablement through Economic Capacity Building ...... 28

1.14 Creating a Healthy Population through Sporting Activities........................................ 28

1.15 Land Law Reform ....................................................................................................... 29

1.16 NCR Land Development ............................................................................................. 30

1.17 Development of Entrepreneur Skills ........................................................................... 32

1.18 Uplifting the Education Level of the Dayaks ............................................................. 33

1.19 Open Tender System to increase the number of roads and bridges built .................... 34

1.20 Allocation for Chinese Schools and Missionary Schools ........................................... 35

1.21 SMI focused Industrial Development policy .............................................................. 36

1.22 Improving Forest Management ................................................................................... 37

1.23 Water and Energy Policies .......................................................................................... 38


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1.24 Expanding the Tourism Sector .................................................................................... 39

1.25 Enhancing Agricultural output .................................................................................... 41

Pubic Finances under the PR Sarawak Alternative Budget 2012 .................................... 43

1.26 Revenue Estimates ...................................................................................................... 43

1.27 Allocation of Operating Expenditures......................................................................... 43

1.28 Allocation of Development Expenditures ................................................................... 44

1.29 Projected Budget Surplus ............................................................................................ 46

The Alternative Budget and SCORE .................................................................................. 47

Concluding Remarks ............................................................................................................ 49

List of Tables and Figures .................................................................................................... 51


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Introduction

Sarawaks first-ever Alternative Budget, entitled Democratising Sarawaks Economy,was presented in 2009 for the 2010 state budget.2 Then, the main challenges facing ourstate were the growing rich-poor divide and the significant workforce migration fromSarawak to Peninsular Malaysia and overseas.

Since then, despite the much publicised projects announced as part of the Sarawak Corridorof Renewable Energy (SCORE) and the 10th Malaysia Plan, the rich-poor divide continues toworsen and the exodus of workers from Sarawak seeking greener pastures outside the statecontinues unabated. The continued salience of these challenges means that our key threethrusts as part of the process of Economic Democratisation continue to be relevant for this

alternative budget. These three key thrusts are:

(I) Economic Democratisation through Fiscal Decentralisation(II) The Prioritization of People through Restructuring & Reallocation(III) Empowerment & Enablement through Capacity Building

These key thrusts are part and parcel of Pakatan Rakyat Sarawaks larger objective ofaddressing the many economic, social and political shortcomings in the state, symbolized bythe figures in Table 1 below, which illustrates how Sarawak has been left behind since itjoined to form the Federation of Malaysia in 1963.

Table 1: Key Issue Areas and Figures comparing Sarawak to Peninsular

Malaysia/MalaysiaIssue Area Key FiguresRoads and Railways No new railway infrastructure development since 1963 compared to

2,000km of railway lines in Peninsular Malaysia.6,700km2 of paved roads in 2010 compared to 80,000km2 inPeninsular Malaysia.

Overdependence onnatural resources

Sarawaks Primary, Secondary and Tertiary sectors comprise of 34%,29% and 36% of its economy respectively compared to 6%, 31% and61% for Peninsular Malaysia

Income gap with the

rest of Malaysia hasnot been closed

From 0.92 of national average income in 1970 to 0.90 in 2000.

School attendancerate lags behindnational averages

17% have never attended school in Sarawak in 2000 compared to10% for Malaysia.

Literacy rates lagbehind nationalaverages

81% literacy rate in Sarawak in 2000 compared to 92% in PeninsularMalaysia

Internet Penetration 19% in Sarawak for 2009 compared to 32% nationally

2 A copy of Sarawak DAPs Alternative Budget entitled Democratising Sarawaks Economy can bedownloaded at http://www.dapsarawak.com/news/DAP_Sarawak_2010_Alternative_Budget_Eng.pdf


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lagging nationalaverageRural Electricity andWater Coverage hasmajor gaps

41% of rural areas do not have water coverage in Sarawak comparedto 10% in Peninsular Malaysia.33% of rural areas do not have electricity coverage in Sarawakcompared to 0.5% in Peninsular Malaysia.

Overview of Sarawaks Public Finances and Economy

In 2010, the total State revenue from all sources was RM5,606.74 million3, out of which,dividends from Malaysia LNG Sdn Bhd, compensation in lieu of oil and gas rights and forestroyalties constitute 66% of the total revenue. (See Table 2 below)

Table 2: Major Sources of Revenue of the Sarawak State Government2010

Source of RevenueAmount

(RM million)

1. Dividend from Malaysia LNG Sdn Bhd, MalaysiaLNG Dua Sdn Bhd and Malaysia LNG Tiga Sdn Bhd4

1,200.00

2. Compensation in lieu of Oil Rights 899.20

3. Compensation in lieu of Gas Rights 830.81

4. Forest Royalty 669.44

5. Compensation in lieu of Excise & Import Duty onPetroleum

120.00

Total 3,719.45

If the RM250 million which was collected from state sales taxes on Crude Palm Oil (CPO)was included, almost RM4 billion out of the total state budget of RM5.6 billion (or 71%) in2010 was derived from natural resources.

Table 3: Breakdown of Sarawaks GDP share by sector in comparison to Malaysia, 2010

Area Agriculture ManufacturingMining &Quarrying

Forestry &Logging

Construction

Services

Sarawak 11.8 24.7 24.6 3.4 3.2 32.3Malaysia 6.8 25.5 6.5 NA 3.0 53.3

Table 3, which compares the breakdown of Sarawaks GDP share by sector with that ofMalaysia as a whole, highlights the disproportionate reliance of Sarawak on the mining andquarrying sector, which comprises almost a quarter of its economy compared with less than7% for Malaysia as a whole.

3 Chapter 4, Laporan Ketua Audit Negara: Penyata Kewangan Kerajaan Negeri dan PengurusanKewangan Kementerian/Jabatan/Agensi Negeri Sarawak Tahun 2010

4 Malaysia LNG Sdn Bhd is a subsidiary of Petronas. The Sarawak state government is entitled todividends from this subsidiary as it is a minority shareholder.


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Despite this abundance in resources in terms of oil and gas, timber and land, Sarawak stillremains the 4th least developed state in Malaysia and many of its people are amongst thepoorest in Malaysia.

To address the economic, social and political challenges faced by the state and highlightedby the figures in Tables 1 to 3 above, the existing revenue derived by the state governmentmust be spent more transparently and efficiently and the economic structure of the statemust be slowly shifted away from its dependence on the exploitation of natural resources,especially in the upstream value chain of economic activities.

Pakatan Rakyat (PR) Sarawak proposes the following three (3) thrusts in order to addressthese challenges:

(I) Economic Democratisation through Fiscal Decentralisation

(II) The Prioritization of People through Restructuring and Reallocation

(III) Empowerment and Enablement through Economic Capacity Building


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Thrust I: Economic Democratisation through Fiscal Decentralisation

Over the years, there has been a centralisation of fiscal resources and power in the handsof the Chief Minister who also occupies the powerful positions of Finance Minister andMinister for Planning and Resource Management in the State Cabinet.

In the 2011 State Budget, out of the estimated Operating Expenditure of RM1,343.7 million,RM646.2 million (48.1%) was allocated to the three ministries headed by the Chief Minister,leaving the remaining RM697.5 million (51.9%) to be shared by the other 10 ministries. 5

Out of the estimated Development Expenditure of RM3,630.3 million, RM2,537.0 million(69.9%) was allocated to the three ministries headed by the Chief Minister, leaving theremaining RM1,093.3 million (30.1%) to be shared by the other 10 ministries.

In other words, the Ministries controlled by the Chief Minister commands 64% of totaloperating and development expenditure allocated in the state budget (Table 4 below).

Table 4: Allocation of Operating and Development Expenditure to the Ministries

controlled by the Chief Minister compared to the other 10 Ministries, 2011 (RM million)

OperatingExpenditure

DevelopmentExpenditure

Total Expenditure

Chief Ministers Ministries 646.2 (48%) 2,537.0 (70%) 3,183.2 (64%)Other 10 Ministries 697.5 (52%) 1,093.3 (30%) 1,790.8 (36%)Total Expenditure 1,343.7 (100%) 3,630.3 (100%) 4,974.0 (100%)

With other ministries being reduced to secondary minor ministries, most important policy andadministrative decisions in the State must await the approval of the Chief Minister.

This has created unnecessary bureaucratic layers and also provides excuses for the otherministers to exonerate themselves from the shortcomings of their respective ministries byclaiming to have insufficient funding and the lack of authority in many other matters.

One clear example of this unnecessary bureaucracy in action is the slowness with whichland development projects, especially in the urban areas, are approved. This invariablyadds to the holding costs for developers which ultimately will be transferred to house-buyers.

The concentration of power in the office of the Chief Minister has also resulted in theimbalance and sometimes irrational allocation of resources. One example is the focus todevelop Mukah, where the state seat of the Chief Minister is located. To spearhead thedevelopment of Mukah, the state government spent RM900 million to build two units of135MW coal-fired generators6. The construction of this coal-fired power plant has increased

5 These are the Ministry of Land Development, the Ministry of Modernization of Agriculture, theMinistry of Infrastructure Development and Communications, the Ministry of Social Development andUrbanization, the Ministry of Industrial Development, the Ministry of Environment and Public Health, the

Ministry of Tourism and Heritage and the Ministry of Public Utilities.

6 Jabatan Penerangan Malaysia, Negeri Sarawak, RM903 million Mukah Power Plant to be Ready by


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the operation and electricity production costs of Syarikat SESCO Berhad, the state ownedelectricity utility, which had no choice but to increase the commercial and industrial electricitytariffs by up to 30% in 2007 and forced the imposition of hefty capital contributions fromproperty developers throughout the State.

In this budget, PR Sarawak proposes to decentralise the budgetary allocation from theMinistries under the Chief Minister's control to the other ministries.

PR Sarawak also proposes for a larger fiscal allocation as well as responsibilities to begiven to the local authorities in Sarawak. This is to improve the local government's deliverymechanism and its overall effectiveness. The implementation of a wide-array of councilservices and development projects is best left to the individual local authorities to decideaccording to their own priorities, preferences and unique situations.

We believe that enlightened and accountable local authorities are best-placed to determineand execute policies and plans that will bring about improvements in the quality of life to thelargest number of people.

To complement the move for economic democratisation via fiscal decentralisation, PRSarawak will introduce local government elections at the same time. This will ensure thatthe greater fiscal resources and power enjoyed by the local authorities will be exercised bydemocratically elected and accountable representatives.

Many countries are devolving more power to the local governments. China and Indonesia'srecent economic success have also been linked with decentralisation of economic decision-making.7 In the UK, the Calman Commission has recommended that Scotland be givengreater tax-varying powers in order to further consolidate the devolution process.8 Thesedecisions were made largely based on arguments of economic efficiency and accountability.

1.1 Removing the Black Hole within the Ministry of Finance

For the past few years, there has been black hole in the form of the GovernmentContribution Towards Approved Agencies Trust Fund which has repeatedly appeared in theState Development Expenditure allocated to the Ministry of Finance.

In 2007, the allocation under this heading was RM1,257,000,000In 2008, the allocation under this heading was RM1,719,083,100In 2009, the allocation under this heading was RM1,825,061,000In 2010, the allocation under this heading was RM1,072,409,800In 2011, the allocation under this heading was RM1,416,475,000

Despite the large sums being allocated to this line item in the budget year after year, thestate government refuses to provide the details of the Agencies which have received fundingunder this heading. The Legislative Assembly is not informed of the identity of theserecipients, thus rendering it impossible to supervise the utilisation of the funds allocated

2008, http://www.emoss.com.my/info/news/2006/20061002C.shtml (Accessed 7 November 2011)

7 For the World Banks argument on the merits of fiscal decentralization, please visit:http://www1.worldbank.org/publicsector/decentralization/fiscal.htm (Accessed 7 November, 2011)

8 For a copy of the Calman Commission report, please visithttp://www.commissiononscottishdevolution.org.uk/ (Accessed 7 November, 2011) The Commission argues for

greater devolution of revenue raising power to the Scottish parliament to increase local accountability.


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under this heading. As such, the Executive, specifically the Chief Minister, since he is alsothe Finance Minister, is not held accountable for the money allocated under this heading.

It is absurd that details of the allocation of expenditure for an amount as small as RM1200are clearly spelled out in the budget while a huge amount exceeding RM1 billion is notproperly accounted for. This defies the basic principle of political and financialaccountability in a democratic system. The opacity of this item makes it extremelysusceptible to being abused.

Under the principle of accountability and transparency, PR Sarawak will put an end to suchclandestine fiscal allocations. This allocation, totalling RM1.4 billion in 2011 will be spreadout amongst the other ministries.

1.2 Investigation into Past Financial Scandals and Review Existing Unfair

Contracts and Non-Feasible Projects

The Sarawak economic landscape is littered with many one-sided contracts andconcessions under which companies linked to BN's political leaders reap supernormalprofits from the state's coffers.

For example, in 2001, the State Government awarded a contract to replace and construct384 bridges to Titanium Management Sdn Bhd in a contract which incurred hundreds ofmillions of Ringgit in cost overruns. In 2008, the State Government awarded a similarcontract of replacing and constructing bridges worth RM1.2 billion to Titanium ProjectManagement Sdn Bhd. There was no open tender held for the award of both contracts.Both companies belong to one of the sons of the present Chief Minister of Sarawak. 9There are also many other State government contracts being awarded to associates andfamily members of the BN leaders without going through an open tender process.10

The financial losses incurred as a result of the state government's investment in venturessuch as First Silicon (Malaysia) Sdn Bhd, Borneo Pulp and Paper and Sarawak InternationalMedical Centre have not been properly accounted for.11 The State has lost billions throughthese projects and yet, no one has been held responsible or accountable for theseastronomical losses.

Other contracts such as the contract for the sale of electricity to selected companies at afraction of the SESCO's official tariffs and the privatisation of parking fee collection servicesalso deserve attention because of the potential revenue losses suffered by the state as aresult of less than transparent contract awarding processes.

Of the proposed big ticket projects currently being undertaken by the state government,none are as controversial and financially destabilizing as the 12 dams under the SCORE,which is expected to generate 20,000MW of hydro-electric power. Despite the massive costoverruns incurred during the construction of the Bakun dam, the state government is still

9 Taibs son awarded millions in government contracts by Joseph Tawie, Free Malaysia Today, 7November, 2011 http://www.freemalaysiatoday.com/2011/11/07/taibs-son-awarded-millions-in-govt-

contracts/ (Accessed 7 November 2011)

10 Numerous associates and family members of BN Sarawak leaders have been named in investigativereports published in the website Sarawak Report: http://www.sarawakreport.org/

11 MP: Probe losses of Sarawak wafer factory Tony Thien, Malaysiakini, 29 October, 2005http://www.malaysiakini.com/news/42477 (Accessed 7 November 2011)


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adamant in going ahead with the construction of these dams. This does not even take intoaccount the current excess in the states electricity generation capacity12.

PR Sarawak will put a halt of all such dam construction projects given their highlyquestionable rationale, feasibility and the likely costs, not to mention the massiveenvironmental costs, the dislocation of a large number of natives and flooding of disputedNCR land.

PR Sarawak also proposes to allocate RM10 million to engage renowned and independentauditors to carry out detailed audits and investigations of these contracts and projects. Thepurpose of these audits is to (i) identify malfeasance and potential corruption in the award ofthese contracts, (ii) to seek compensation for the state especially in cases where the statehas been charged for cost overruns, (iii) to cancel current contracts which have beenawarded under dubious circumstances, and (iv) to honour contracts which were awardedunder transparent conditions (of which there are probably few and far between).

1.3 Greater Financial Autonomy for Local Authorities

While the Bintulu Development Authority (BDA) enjoyed a development grant of RM100million from the state government in 2011, all the other local authorities in the State hadgrossly insufficient allocation of funds.

For example, for Majlis Perbandaran Pedawan, the grant for street lighting and traffic lightfor the year 2011 was only a meagre RM100,000 while Syarikat SESCO Berhad charged thelocal authority RM5,000 for the installation of a single street light. As a result, the residentsin many areas under Majlis Perbandaran Padawan had no street lights.

In 2011, the total Development Fund allocated to all the local authorities was RM25.4 million

and the total Administration Grant from the Operating Expenditure to all the local authoritieswas RM56.4 million. This total grant of RM81.8 million for all the local authorities (includingDewan Bandaraya Kuching Utara) in Sarawak is grossly insufficient. As a result, most localauthorities had to cut corners and reduce services to the residents in order to keep withintheir tight budgets.

The tight budgets for the local authorities has translated into poor and reduced servicesprovided by these local authorities. These include the poor maintenance of council roads, areduced frequency of rubbish collections, drain cleaning and grass cutting and insufficientstreet lightings.

On the other hand, the local authorities are finding means to tax the people in order to

increase their revenue by, for example, imposing the highest advertisement fees in thecountry, increasing the assessment rates, imposing additional charges for the collection ofcertain types of rubbish, increasing the licensing fee for hawkers, just to name a few. Allthese contribute to the increase in the cost of living as well as the cost of doing business.

PR Sarawak proposes to triple the allocation to these local authorities (including the BintuluDevelopment Authority) to RM450 million for the year 2012. The specific allocation of thissum will be based upon the number of residents and surface area of the respective localauthorities. This will allow the local authorities to assume a bigger role in the planning of

12 At present, the peak demand for energy in Sarawak is approximately 1200MW. The Bakun Damalone, with its eight 300MW turbines, can generate 2400 MW of electricity.


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the local socio-economic development and to provide better services and amenities toresidents.

Local authorities will have access to the expertise of the various state ministries anddepartments which will act as advisory agencies to make sure they are able to use their newallocations most efficiently, and to prevent unnecessary and ineffective duplication offunctions.

1.4 Local Government Elections

Local governments are elected in most developed and democratic countries, including theUnited States, the United Kingdom and Australia and increasingly in many developingdemocratic countries such as Indonesia.

Local government elections were held in the early days of post-independence Malaysia butwere suspended after the Indonesian Confrontation in 1964. They were never restored but

instead, the power to appoint local councillors was given to state governments under the1976 Local Government Act.

The consequences of having councillors who are appointed by the respective stategovernments have not been positive. It reinforces centralisation, and allows undue centralinfluence over issues that are best handled by local governments. Most importantly, thereare no checks on inefficient or corrupt councillors, especially those who are also electedrepresentatives to the state assemblies.13

Since appointments to the local councils are political rewards, councillors are moreconcerned with pleasing their political masters than with serving the residents. Somecouncillors do not even live in the jurisdiction of the local councils and hence do not know

the needs of the residents.

The abuse of power and the pervasiveness of political interference from the centre in ourlocal councils can only be partially prevented by restoring local government elections. Thepeople must have the political freedom to elect local councillors that best represent theirpreferences, and to throw out officials that have been proven corrupt or incompetent. Thisis the only way to force local governments to be transparent, accountable and sensitive tolocal needs when spending ratepayers' money.

Furthermore, local government elections can be seen as the bedrock of democracy becauselocal governments are closest to citizens. Therefore, local elections are imperative to fullydemocratize governance in our country and permit citizen participation in the decision-

making process.

Together with fiscal decentralisation, local government elections will bring about not onlyincreased political democratisation in Sarawak, but also increased economicdemocratisation of local governments decisions and actions. With greater fiscalresponsibilities, local governments require greater checks and balances to ensure that allexpenditures are fully accounted for, spent competently and transparently.

It will be affordable for the State to implement local government elections though we may

13 The Pakatan Rakyat state governments do not allow state representatives to hold positions ascouncilors.


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need the co-operation of the Election Commission in this regard. Given estimates by theElection Commission that the average cost of holding an election for one state constituencyis RM500,000 and that for a parliamentary constituency is RM600,00014, to hold localgovernment elections for all the 25 local authorities in Sarawak will cost approximatelyRM20,000,000. PR Sarawak thus proposes an allocation ofRM20 million to hold localgovernment elections.15

14 By-elections cost RM3 million, Malay Mail, 23 Sept, 200915 Assuming that elections for each local authority will cost RM800,000 on average


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Thrust II: Prioritization of People through Restructuring andReallocation

Years of misdirected policies, as well as systemic abuses by the current BN stategovernment has resulted in the institutionalised misallocation of revenue derived fromSarawak's natural resources. The result has been the concentration of benefits in the handsof a very few who are politically connected.

On the other hand, the majority of the population, especially those in the rural areas whereassistance and resources are much required, have been neglected and marginalised.

In short, under the current policies of the BN state government, the rich have become richerwhile the poor have remained poor. The abundant wealth generated by the naturalresources of the State has not been equitably distributed for the benefit of all Sarawakians.

Thus, a major concerted effort to restructure and reallocate our economy is required tocreate a more balanced development between the rich and the poor, as well as fosteringgreater economic efficiency and competitiveness.

As part of the restructuring and reallocation thrust, there will be dedicated efforts towardsproper implementation of an efficient welfare system to ensure that those born into povertyare not trapped in a vicious cycle.

PR Sarawak also recognises the fact that the poorest and most marginalized community inSarawak is also the largest ethnic group in Sarawak, the Dayaks.16 As such, we haveproposed specific programs to address these problems and to improve the social, economicand educational standing of the Dayak community.

PR Sarawaks strategy for the implementation of the restructuring and reallocation thrust willinclude direct grants to the hardcore poor and elderly (with some contingencies),implementation of targeted social welfare policies, the introduction of a minimum-wagepolicy, a new land policy and the provision of affordable housing.

1.5 Eradication of Hard Core Poverty through grants

The Poverty Line Income (PLI) is understood as having an income sufficient to purchase a

minimum basket of food to maintain household members in good nutritional health and otherbasic needs such as clothing and footwear, rent, fuel and power, transport andcommunications, healthcare, education and recreation.

The PLI for 2007 was RM720 in Peninsular Malaysia, RM960 in Sabah and RM830 inSarawak while the food PLIs were RM430, RM540 and RM520 respectively. Different setsof PLIs were used for urban and rural areas.

Households whose incomes fall below the PLI are considered living under Overall Poverty

16 Here, the Dayaks refer to the Ibans, the Bidayuhs, the numerous ethnic groups under the Orang Ulucategory as well as the Melanaus.


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while households whose incomes fall below the food PLIs are considered living underHardcore Poverty. A household is defined as a family of 5 persons.

Government statistics show that as at 30th September, 2009, in Sarawak, there were 12,537households living under hardcore poverty and 14,528 households living under overallpoverty.17

The Penang state government led by Chief Minister Lim Guan Eng has implemented, withgreat success, a policy to top up a hardcore poor household's income to reach the foodPLI to completely eradicate poverty within a year. The Selangor state government has alsointroduced a number of welfare policies aimed at providing social assistance to theeconomically marginalized residents of Selangor. It is notable that both Penang andSelangor state governments are helmed by Pakatan Rakyat.

The Sarawak state government, with its abundant natural resources and much larger statebudget, is in a much better position to eradicate hardcore poverty within the state. It is alsothe central political philosophy of PR Sarawak that the State's natural resources should be

equitably shared by the people.

Meanwhile, we recognise that the food PLI of RM520 as the benchmark for even thehardcore poor households is unrealistically low. It is hard to fathom that with a householdincome of RM520 per month for a family of 5, living in the cities of Kuching and Miri, beingfed adequately and have the basic welfare of the children adequately looked after. This isespecially so where households in the urban areas are subject to additional costs of living ina city such as transportation expenses, higher costs of food and education.

Based on PR Sarawaks conservative calculations, the PLI and food PLI in Sarawak shouldbe raised according to the levels listed in Table 5 below.

Table 5: Recommended PLI and Food PLI for Sarawak

Type of Area PLI Food PLI

Urban RM 1,380 RM 860

Semi-Urban18 RM 1,150 RM 750

Rural RM 920 RM 620

At these higher but more realistic PLIs and Food PLIs, the number of households classifiedas hardcore poor is expected to be increased to 20,000.

PR Sarawak proposes to allocate RM80 million to eradicate hardcore poverty (as redefinedby PR Sarawak under the higher food PLI level) in the state. The sum will be distributed bythe Ministry of Social Development and Urbanisation working in tandem with the localauthorities. This allocation will be used to top-up the earnings of the hardcore poor so thatthey approach or exceed slightly the RM860 Food PLI level for urban areas.

PR Sarawak also proposes that part of this allocation be used for a pilot project to makeanti-poverty grants to the female head of households living under Hardcore Poverty

17 Economic Report 2009/2010 published by Ministry of Finance Malaysia.18Semi-Urban regions include parts of Sibu, Sarikei and Bintulu as well as Sri Aman and some other smallertowns. Urban regions include most of Kuching and Miri.


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contingent upon certain conditions being met notably requiring the children in these poorhouseholds to attend school regularly, and to undergo regular basic medical examinations.The purpose of these contingent grants is to empower women heads of households (whomany studies have shown, are less likely to spend this money on wasteful expenditure suchas cigarettes and alcohol) as well as to address the educational needs of their children.These grants can be given in the form of food stamps and coupons to be used fortransportation to and from schools or for stays in dormitories, especially for those familiesliving in the interior regions of the state. Similar programs have been successfully rolled outin developing countries, most notably the much praised Progressa/Opportunidadesprograms in Mexico.19

1.6 The Provision of a Social Safety Net

In addition to the grants for the hardcore poor, a social safety net needs to be created for allliving under the PLI.

For instance, a substantial group of urban poor are self-employed. They work as taxi-drivers,daily paid workers, contract baby-sitters or maids and they are not covered by EPF, SOCSOor medical insurance. Their social protection is non-existent and they are one accident ormajor illness away from being deprived of any income.

There is a general saying amongst the people that In Malaysia, if you are poor, you can diebut not fall sick. This is a sad depiction of the country's situation and it is also a reflection ofthe shortcomings of the BN government in providing for the needs of the poor.

The PLI, by definition, is only sufficient for the basic sustenance of a household. A specificSocial Safety Net fund will be established for poor families to help them with outstandingfinancial needs outside daily sustenance such as medical costs associated with unexpected

illnesses and pregnancies, accidents in the family, extra education related expenses andother unexpected expenses. The availability of this fund will also ensure that hardcore poorand poor families have a final social safety net in times of emergency.

The total number of hardcore poor and poor households in Sarawak is 27,06520. PRSarawak proposes an allocation of RM20 million for provision of a basic social safety netfor these households.

This measure is currently in place in most of the developed countries, such as Singapore'sComCare scheme which received an allocation of S$110 million in its 2009 budget despitethe much smaller number of households living in poverty in the city-state. Most developingcountries also spend between 1 to 2 percent of their GDP on safety nets.21

1.7 Provision of a Senior Citizens Bonus

As responsible Sarawakians, it is very important for us to remember the contribution of our

19 See the evaluation of Progress by the International Food Policy Research Institute (IFPRI):http://www.ifpri.org/sites/default/files/publications/ib6.pdf(Accessed 7 November 2011)

20 Economic Report 2009/2010 published by Ministry of Finance Malaysia.21 For a comprehensive review of Social Safety Nets including those in developing countries, see Grosh,Margaret, Carlo del Nino, Emil Tesliuc and Azedine Ouerghi (2008), For Protection and Promotion the

Design and Implementation of Effective Safety Nets, The World Bank, Washington DC.


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senior citizens towards nation building. While we preach filial piety in our society, many ofthe senior citizens aged 60 and above are finding it difficult to make ends meet especiallythose with dwindling savings.

To demonstrate our appreciation of the contribution that these senior Sarawakians havemade towards the development of the state, PR Sarawak proposes a Sarawak SeniorCitizen Bonus of RM600 per annum for all Sarawakians aged 60 years old and above.

Based on the projection in the Yearbook of Statistics Malaysia 2010 published by theDepartment of Statistic Malaysia, by 201222, the number of Sarawakians who are aged 60and above is approximately 195,000.

The Sarawak Senior Citizen Bonus will cost the State Government RM117 million toadminister.

1.8 Minimum Wage Rate and Fair Wage System

With the cost of living continuing to rise, most Sarawakians in the low-income group find itincreasingly difficult to make ends meet with their stagnant wages and declining purchasingpower.

Hence PR Sarawak proposes a Minimum Wage as well as a Fair Wage programme toguarantee a minimum standard of living for all workers in the state.

1.8.1 Minimum Wage

PR Sarawak will set the minimum wage for workers in Sarawak at RM900 per month, whichis higher than the adjusted RM860 PLI level in urban areas in the state. 23

The implementation of this minimum wage system will be in stages, starting with all stategovernment agencies and state government linked companies.

As timber and plantation companies are enjoying huge profits from the natural resources ofthe state, it is only fair that their workers earn at least a level of income which is higher thanthe food PLI in Sarawak. Licences and permission to log and plant will be conditioned onthe strict compliance on adhering to this minimum wage regulation by licensees andplantation owners.

Implementation of this minimum wage regulation will be extended to other private sectorcompanies gradually, with a timeframe of 5 years before total compliance is enforced.

This minimum wage level will be revised from time to time depending on the trajectory ofeconomic development of the state and other economic factors such as rises in the cost ofliving.

22 According to the statistics, 7.58% of the Malaysian population is of the age 60 and above andSarawak's population will increase to 2.58 million by 2012.23 PRs federal shadow budget proposes a RM1100 minimum wage level but it also pointed out thatgiven the difference in employment patterns and economic structures in Sabah and Sarawak, the minimum wage

in these two states should be given time to converge to the national level


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1.8.2 Fair Wage Program

This Fair Wage program is aimed at increasing the take-home pay of low income workersearning less than RM1,500 a month. For those employees with a monthly salary of RM900or less, PR Sarawak proposes that the state government pay for their employee'scontribution to the Employees Provident Fund (EPF). For those with monthly salariesbetween RM901 and RM1,500, PR Sarawak proposes that the state government contributes5% of the 11% Employees Provident Fund (EPF) contribution. These EPF contributions paidfor by the state government are then channelled back to the employees in the form ofmonthly cash payments.

With the implementation of this Fair Wage program, those employees earning monthlysalary of RM900 or less will immediately enjoy an 11% increase in their take-home pay. Aworker earning RM900, under the current system, would enjoy a take-home pay of RM801.Under the PR Sarawak budget, he will now have a take-home pay of RM900.

As a further illustration, without this Fair Wage program, an employee earning a monthly

salary of RM1500 will only have a take-home pay of RM1335. Under the PR Sarawakbudget, the employee's take-home pay will increase to RM1410.

The Fair Wage program is expected to assist up to 250,000 working Sarawakians from thelow-income group and shall require an allocation ofRM300 million which will be allocated tothe Ministry of Finance for disbursement.

Since the Fair Wage program will be channelled into an EPF account, to ensure that thetarget group receives this disbursement, the state government will hold joint programs withEPF to organise campaigns to encourage those within this group who do not yet have EFPaccounts to sign up for one. A sum ofRM2 million is allocated for this purpose.

The Fair Wage program is not a new idea but an adaptation of some of the best practiceswhich have been successfully implemented in other developed countries. For example, inthe United States, Earned Income Tax Credit (EITC) acts like a negative income tax for low-wage workers, supplementing their earned income. Similarly, the UK has implemented aWorking Tax Credit which has helped to reduce poverty by providing additional income forlow income earners. Recently, Singapore has introduced Workfare which supplements theincome of older low-wage workers.

The Fair Wage program will ensure that all Sarawakians in need are taken care of by thestate government and that the State's wealth is shared equitably with no community leftbehind.

PR Sarawak will review the Fair Wage programme annually to determine the bestmechanisms to boost the income of poor Sarawakians without adversely affecting aperson's incentive to seek work.

1.9 Caring for Senior Citizens and the Disabled

A key concern for senior citizens is their quality of life during their golden years. An importantdeterminant of their quality of life is the type of housing options which are available to them.As one of the basic needs, housing is important not only because it provides a secure andcomfortable place for senior citizens to live in but also because it provides the surrounding


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for senior citizens to interact with one another in a community setting. The need for housingand community interaction is especially urgent among the elderly with little or no savings.

To assist this group, PR Sarawak proposes, for a start, to establish a pilot project comprisingfour senior citizen friendly community centres together with housing options in Kuching,Sibu, Bintulu and Miri. Food support care services with be provided in the housing facilities.We will work with NGOs and other community organizations to provide and supplement therequired support services.

State land will be set aside for the construction of the required facilities for these pilotprojects.

RM6 million will be allocated to the Ministry of Social Development and Urbanization tocarry out this project.

PR Sarawak is committed to ensuring the full and equal participation in society by personswith disabilities. Therefore we will allocate RM10 million for financial assistance to the

disabled and a further RM10 million to various state agencies to intensify efforts to helppersons with disabilities to lead independent lifestyles, to have sustainable livelihoods and toachieve financial security.

The outlay will focus on:

The creation of customised programmes to encourage participation of the disabled in thesociety. It is important to educate and empower the disabled so that they are equipped withthe necessary skills that will enable them to be productive members of the workforce.Organising forums, public discussions and information campaigns on issues facing thedisabled community and ways and means by which they and their families can pursueindependent lifestyles. The lack of exposure of the general public to the plight of the

disabled has led to these issues being ignored and even contributed to the stigmatisation ofthe disabled. This has to be stopped.Enhancing the role and presence of charitable and non-profit organisations in helping thedisabled. Volunteer programs in schools and communities will help to instil a sense ofresponsibility on the part of society to reach out to the disabled community.

To further fulfil the needs of the disabled, PR Sarawak proposes that all new buildings mustbe wheelchair accessible. A 50% discount on the assessment rate shall be given to a housewhich is occupied by a disabled person. Government agencies like SESCO and WaterBoards will be directed to give a flat rate discount to households with a disabled resident.

1.10 The establishment of a Dayak Welfare Fund

Many within the Dayak community, especially those living in the longhouses, are deprived ofconveniences which many others, especially those in the urban areas, take for granted.

For example, Dayaks almost never have medical insurance and thus are not able to pay forspecialist treatment when struck down by certain illnesses. In 2008, a pair of twin sisterswho were diagnosed with degenerative kidney disease was sent from Miri to the KL Hospitalfor treatment. A lack of funds delayed their trip and as a result, one of the twins passedaway.


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Dayak homes and other properties such as boats are usually not covered by insurance.Dayak longhouses are particularly vulnerable to fire since wood stoves are still commonlyused in many longhouses to cook. These homes are also particularly vulnerable duringtimes of flooding and other natural disasters. The infamous logjam affecting Rejang River inOctober 2010 destroyed many jetties and longboats. Uncontrolled and under-supervisedlogging activities pollute the rivers and drinking waters of the Dayaks. Many Dayaks stillrely on wells and on rain water because of gaps in the coverage of piped water.

To reduce and mitigate some of the problems faced by the Dayaks, PR Sarawak proposesallocating RM100 million to the Ministry of Social Development and Urbanization to set up aDayak Welfare Fund. The fund will be utilised as follows:

RM20 million for medical assistance for the poor Dayaks RM15 million to rebuild homes destroyed by fire and other natural disasters RM10 million to help Dayak senior citizens who have no one to care for them RM30 million to supply water tanks, pumps and pipes for affected longhouses RM25 million for the repairs of dilapidated homes

1.11 Affordable and Decent Housing

Affordable housing for low income groups plays an important role in improving the standardof living for this group of Sarawakians. The actual provision of affordable housingdevelopments for low income earners has been found wanting.

Low-cost houses which have been built have major quality issues and purchasers of thesehouses have no choice but to suffer and live in accommodation which has serious defects.

PR Sarawak will establish a new policy so that affordable housing policy will require that all

low costs houses must have at least 3 bedrooms and 2 bathrooms and that the materialsused must be of a reasonable quality.

As for those low-cost houses already built but which have serious defects and shortcomings,a sum ofRM30 million will be allocated for upgrading, repair and renovation work.

The Housing Commission will be entrusted to look into the necessary legal framework forthe forcible take-over of abandoned low to medium cost housing projects. Harsher penalties,including imprisonment sentence, will be imposed on those irresponsible developers. Thelegal framework will be established by the end of 2012.

Existing buyers will be offered the option of selling the abandoned units back to the Housing

Commission or alternatively, they can wait for these projects to be revived and completed.Unsold units will be sold to qualified purchasers to recover the cost of acquisition of theproject.

In addition, PR Sarawak will also move to establish a Build, then Sell policy for low tomedium cost housing in order to protect house buyers from being exploited by irresponsibledevelopers who go bankrupt and are unable to finish these projects.24

24 This is consistent with the PR Alternative Budget 2012 at the federal level.


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1.12 Recognising the Role of NGOs

PR Sarawak recognises the contribution of NGOs which includes associations andcharitable organisations which play an active role in building a more caring and equitablesociety.

Currently, such organisations have to solicit fund from their elected representatives, makingthe committee members of such organisations beholden to the particular electedrepresentative and his or her political party.

PR Sarawak holds the position that NGOs, associations and charitable organisations shouldbe run free from any undue political influence or manipulation and that funding for suchactivities for community outreach should be based on the merits of such activities and notthe relationship or affiliation to a particular political party or elected representative.

Thus, PR Sarawak will set aside RM10 million for a development fund use for the runningof social programs by all the NGOs, associations and charitable organisations. These

organizations apply for funding for the community outreach events which they organise.Funding for these activities will be disbursed by the state government to these organisationsbased on the nature of the activities, the number of participants and benefits generated forthe community.

In addition, PR Sarawak also proposes RM10 million to be allocated for places of worshipto carry out repairs and upgrading works. This is in recognition of the important role playedby places of worship in strengthening community ties which is crucial for the successfulimplementation of community outreach activities.

1.13 Preservation of Dayak Culture

The Prioritization of People entails not just looking after the economic interests of lowincome earners but also includes preserving the cultural heritage of marginalisedcommunities. In many ways, the cultural heritage of marginalised communities is even moreimportant than economic livelihood since the former imbues a community with a strongsense of dignity and identity.

There is an urgent need to undertake a concerted effort for the preservation the culturalheritage and traditions of the various Dayak tribes. This is not to say that the preservation ofother cultural heritage in the state is not as important. Rather, it is a recognition of the pastmarginalisation of Dayak culture and the current pressures which economic developmenthas put on many Dayak tribes, some of which have and continue to face relocationpressures as a result of dam building and palm oil plantation expanding activities.

The publication and distribution of books, videos and DVDs on the folklore, music, danceand linguistic heritage and traditions of the various Dayak communities need to beexpanded. Different channels including exhibitions and state-wide competitions need to beused to ensure that the practice and understanding of these traditions remain vibrant. Oldtraditions that have disappeared need to be resurrected and preserved. Older folks that stillremember oral traditions and oral histories need to be identified and have their oral historiesrecorded. More literature in the many Dayak languages needs to be written. Centresshowcasing this rich heritage and tradition need to be established.


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To kickstart these efforts, RM20 million will be allocated to the Ministry of Tourism andHeritage. This allocation will be utilised in the following manner:

The building of a Dayak Cultural Center: RM10 millionThe collection and publication of oral traditions and histories: RM2 million

Development grants for activities and events to promote Dayak cultural practices andtraditions within the state: RM3 millionDevelopment grants for academic research into Dayak cultural practices and traditionsincluding and especially those which are on the brink of extinction: RM3 millionIncentives for the publication of literature in the various Dayak languages: RM2 million

PR Sarawak is committed to work with the various stakeholders including universityacademics, leaders of the various Dayak cultural associations and other non-governmentorganizations in order to achieve the objective of preserving the richness of the Dayakcultural heritage and traditions.


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Thrust III: Empowerment and Enablement through Economic Capacity

Building

The first two thrusts Economic Democratisation through Fiscal Decentralisation and thePrioritization of People through Restructuring and Reallocation were aimed at increasingthe efficiency, effectiveness, transparency and equitability of expenditure by the stategovernment.

The third thrust outlined in this chapter empowerment and enablement through economiccapacity building aims to restructure the economy so as to decrease our dependence onnatural resource exploitation, empower the indigenous communities through establishingproper boundaries for NCR land and build capacity by providing better educationalopportunities to marginalised groups. This thrust demonstrates the main differences in theeconomic policies of PR Sarawak and that of the BN state government. While the BNemphasizes mega projects which entails significant financial, human and environmental

costs, PR Sarawak emphasizes sustainable development that focuses on the humansoftware instead of physical hardware. Physical investment by the state government shouldbe seen as part of the empowerment and enablement process for example, through thebuilding of roads to the interior regions rather than infrastructure projects which areallocated to political cronies.

1.14 Creating a Healthy Population through Sporting Activities

It is often said that the two biggest investments any country can make are in education andhealthcare.

Undoubtedly, success in both sectors is pivotal for long term economic growth. In the longrun, both types of investments, under well thought out policies which are properlyimplemented, yield immense dividends that will transform a society from third world livingconditions to a first world environment.

Under our federal system, most healthcare services such as the provision of medicalservices falls under the jurisdiction of the Federal government. However, sports and socialdevelopment falls under the purview of the state. We believe that regular exercise is animportant component of creating a healthy population. Indeed, regular exercise is oftenassociated with many positive health outcomes including reducing the occurrence of heartrelated diseases. As such, PR Sarawak is committed to promoting sports and other health

activities in the state as part of the larger strategy to create a health population.

To achieve this objective, the government must give sufficient grants for sporting events andconstruction of sports facilities.

We note that in the 2011 State Budget, the Ministry of Social Development and Urbanizationwas only allocated RM18.3 million in Development Expenditure for the development ofsports and social facilities. PR Sarawak is of the view that such a meagre sum for sports andsocial facilities per annum is grossly insufficient. This has deterred many sporting bodiesfrom organizing competitions and other sporting activities. Without financial assistancefrom the government, the committees of these organisations spend much of their timelooking for sponsorships for their activities rather than planning to promote the sports.


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As a start, PR Sarawak proposes RM50 million for a development fund for the Ministry ofSocial Development and Urbanisation, out of which, RM40 million will be spent to manageand provide quality and functional sports facilities as well as to organise programmes topromote sports in the state. This would include funding to the Sarawak football team, forexample, which has faced financial shortfalls in the past.

The remainder RM10 million will be allocated to manage and provide infrastructure for socialdevelopment and organise programmes for social development in the state especiallyamong the youth. This would include programmes for alternative sports and activities suchas skating which are popular among the younger generation. It would also include activitieswhich cater to the older generation such as tai-chi.

1.15 Land Law Reform

Many landowners in urban areas are now facing problems associated with the renewal of

land leases.

Under the present Land Code (Cap 81), upon expiration of the land leases, ownership goesback to the government. Landowners may apply for renewal of their leases. However,there is no right to automatic renewal or guarantee that new applications must be approved.

If the government of the day refuses to approve the application to renew leases, nocompensation will be given to the landowners for the loss of their land. If the governmentapproves the application for the renewal of their leases, the landowners will have to pay acostly premium for such renewals, given the increase in the value of land in the urban areas.

Even for those applicants whose applications were approved, many of them cannot afford to

pay the hefty premium to renew these expiring leases.

The BN state governments excuse that the state needs revenue from land leases has littlemerit. The main contribution to revenue of the government from land sale premiumcomes not from the premium collected from such renewal cases but from the alienation ofstate land to private parties. For instance, since 2007 till October, 2009, 661 owners fromaround the Kenyalang Park housing estate had paid the premium for land lease renewal.The total collection by the government in this case was only RM2.68 million.

In view of the fact that the land lease renewal problem is causing great anxiety, financialuncertainty and inconvenience to landowners in Sarawak, PR Sarawak proposes tointroduce a Land Law Reform (Renewal of Terms of Documents of Title and Acquisition) Bill.

Under this Bill, all leases facing expiry will be automatically renewed for 99 years without theneed to pay the renewal premium. This will ensure the security of tenure to land ownership.

The security in land tenure will have a positive impact on land ownership. It not onlyenhances confidence in land ownership but also incentivizes landowners to upkeep and toproperly maintain their residence.

It has been discovered that large parcels of prime land and hundreds of thousands of acresof land have been alienated to the family members of the present BN leaders and theircronies without any open tenders and at a fraction of the prevailing market rate.


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For example, 269 acres of prime land at BDC Kuching, a major commercial hub and highend residential area, was alienated at an approximate premium of RM80 million while theprevailing market price for the said piece of land is approximately RM400 million.

Similarly, we have witnessed the alienation of hundreds of thousands of acres of agriculturalland to the crony companies at a premium of RM300 per acre compared to the prevailingmarket price of between RM3,000 and RM4,000 per acre. These companies, after obtainingthe land, do not proceed to plant crops but instead put these companies up for sale in orderto earn a windfall profit.

To rectify such cases and to stop future abuse, PR Sarawak will implement the followingmeasures:

To review the cases on land alienation, in particular those at premiums far below marketvalue, with a view to re-enter the alienated landTo impose a high quit rent rate for companies with more than 5,000 acres of land. It isproposed that the quit rent for land larger than 5,000 acres held by a single company or

related companies will be increased from the present RM1 per acre to RM50 per acre. Thisis to stop land grabbing and holding by crony companies of large parcels of state land.To implement a system of public tender for the alienation of state land to private parties fordevelopment. This public tender system will at least triple the premium revenue for thestate government as compared to the present BN government's direct alienation systemwhere in almost all cases companies which are related to the BN's political leaders obtainthe land at huge discounts.25

Therefore, even with the introduction of a premium free automatic renewal of land leasespolicy, the revenue to the government from Land Sale Premium is likely to triple from theRM235 million in 2010 to RM700 million in 2012. The policy to ensure effectivedevelopment, cultivation and utilization of the land will not only contribute additional

sustainable revenue to the state but will also ensure that the only companies whichgenuinely want to acquire land for the sake of development or legitimate economic activitiessuch as the planting of agricultural products are involved in the bidding for land.

1.16 NCR Land Development

Under the BN's New Concept of Native Customary Right (NCR) land development schemes,great injustice has been done to the NCR landowners.

Under these schemes, though the natives are still the lawful land-owners in name, in reality,they have literally surrendered all their rights to the companies planting crops, mostly oilpalm, on their land. The natives are at the mercy of these companies in regard to whetherthey will be paid any dividends from these agricultural activities.

These companies, mostly in the oil palm sector, paid extremely low salaries for workersworking on these lands and when the natives refused to accept such low salaries, thesecompanies engage cheap foreign workers to work on these plantations. The natives arethen compelled to leave home and families and seek job in cities. The lack of jobs in thecities has caused many social problems. Many natives have little choice but to work in

25Transactions have shown that some RM2 companies alienated with oil palm land at RM300 an acre weresold at prices based on more than RM3,000 per acre of the land owned by these companies.


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timber camps in the Solomon Islands and Papua New Guinea and even as far as Russiaand Africa.

Those Dayaks who do not travel abroad seek employment in Peninsular Malaysia in statessuch as Penang, Selangor and Johore. With the exception of a small number ofprofessionals, the estimated 40,000 Dayaks working in Johore, 40,000 in the Klang Valleyand another 20,000 in northern Peninsular Malaysia mostly work in labour intensiveindustries such as in the construction industry and in factories.

It is a travesty that Sarawak, which has more land and resources than Johore, the KlangValley and northern Peninsular Malaysia put together, has seen its indigenous populationleave in order to take up menial jobs elsewhere when they could have stayed on to work anddevelop their own NCR land. The BN Government has not deemed it necessary to give anexplanation for this phenomenon but have instead chosen to wear blinkers, thereby ignoringthe land issues faced by the natives, especially the Dayak community.

Indirectly, many Dayaks are forced to leave their homes and families by the many land

development schemes implemented by the BN government. On 13

th

May, 2009, theMinister of Land Development told the Sarawak Dewan Undangan Negeri that there were823 NCR landowners as workers in the various Joint Ventures established by the statecompared to 1215 foreign workers. The alienation of the Dayaks in their own land isevidenced by them being outnumbered by foreign workers in these areas. This disparity willonly increase over time as the number of plantations continues to grow in Sarawak.

The BN Government had taken much pride in telling Sarawakians that the New Concept ofNCR Land Development has been implemented since 1996. However, according to the BNGovernments Minister of Land Development by his answer given in the Sarawak DewanUndangan Negeri on 13th May, 2009, a total gross area of approximately 406,425 hectares(1 million acres) of NCR land had been agreed to for development in the joint ventures

arrangement, but only 4 out of the existing 26 joint ventures managed to pay out dividends,amounting to RM2,301,116.86. The pittance paid out to the Dayaks who joined theseventures comes up to 17 sen per acre per year!

The above shows that the present NCR land development scheme as implemented by theBN government is nothing but an exploitation of the NCR landowners dressed up as jointventures.

In order for the rightful NCR landowners to truly enjoy the fruits of their land and labour,there must be a total reform to the current system.

PR Sarawak proposes the following steps:

To identify and carry out a comprehensive perimeter survey on all NCR land to determinethe land boundaries of individual lots. Land titles will be issued to these landowners, be itfor individual or communal ownership, and conditions will be imposed so that the owners ofthe land cannot be easily exploited by unscrupulous companies and individuals seeking tobuy or exploit these lands.To provide these landowners with all the technical and financial support for the planting ofthe crops of their choice on their lands.

Under the proposed scheme, a very substantial group of small stakeholders will be created.The natives will then be empowered and enabled. They are not only the landowners but


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they also have the rights to determine the crops to be planted on their own land. Moreimportantly, they will be able to enjoy the produce, the yields and the profits from their ownland.

For a start, we target to engage landowners of approximately 200,000 acres of NCR land inyear 2012. We propose allocating RM80 million to the Ministry of Planning and ResourceManagement to carry out the perimeter survey, to issue the appropriate land titles to theselandowners and for legal assistance in legal disputes with plantation groups and othercompanies which may also want to stake claims to this land.

An additional provision ofRM250 million will be allocated to the Ministry of Modernization of Agriculture to provide financial and technical support to the Dayak community for cropplanting activities on NCR land.

1.17 Development of Entrepreneur Skills

Land development has also another potential side benefit. Land cultivation is similar in manyways to operating any other business. The cultivation of land, especially in activitiesinvolving cash crops, will build capacity and increase the experience of the Dayakcommunity in seeing first-hand how a business operates especially in terms ofunderstanding the process of getting produce to the markets, obtaining the best price forthese products, maximizing profits and adopting good management practices.

The next step in this process is to help potential Dayak entrepreneurs bring agriculturalproduce from their land to markets in the urban areas. This requires the allocation of specialtrading centers for Dayak entrepreneurs in the major cities and towns. Spaces in strategiclocations such as bus terminals and major markets need to be rented so that there is spacefor the display and storage of trade items including agricultural produce. In addition, proper

guidance and regular trainings by experienced personnel from different economic sectorswill be provided in order to build up the knowledge and capacity of these Dayakentrepreneurs. Soft loans in the form of micro-financing schemes, up to a maximum ofRM50,000, will also be made available to Dayak entrepreneurs. This soft loan will begranted on agreed terms and conditions but must not be collateral-based since not manyDayak entrepreneurs who are just starting out have the requisite capital or property to beprovided as collateral.

In addition to helping Dayak entrepreneurs bring their products to market, assistance canalso be provided to include and incorporate Dayak entrepreneurs as part of the retail supplychain in order to facilitate the process of bringing supplies at reasonable cost to the ruralareas, especially for the areas from which these Dayak entrepreneurs come from. Many of

these areas, especially the smaller longhouses, are currently neglected by the biggersuppliers because of high transportation costs and the small market size of individuallonghouses. Using Dayak entrepreneurs who have the local knowledge also has theadvantage of reducing cost of living increases associated with increases in the price of basicretail goods.

To assist Dayaks in securing supplies at reasonable prices, a trading house will be set up.This trading house will monitor all traders that participate in this program. It also providesbank guarantees to these suppliers on behalf of the Dayak entrepreneurs.

PR Sarawak proposes an allocation of RM80 million to establish a SADA Entrepreneur


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Development Unit26 under the Chief Minister's Department with the expressed objective todevelop the entrepreneur skills of the Dayak. This sum includes training and supervision.Specifically, this is utilised as follows:

Trade Centre(s): RM20 millionMicro-finance: RM20 millionRetail and trading house: RM30 millionCottage industry: RM10 million.

PR Sarawak is aware that the establishment of such a unit and the allocation of funds tobuild up Dayak entrepreneurs may result in some of the same kind of rent seeking activitiesthat plagued the implementation of the New Economic Policy (NEP) in Peninsular Malaysia.To minimize this possibility, Dayak entrepreneurs who have achieved a certain level ofturnover, initially set at RM1 million annually, will no longer be eligible for the financialassistance schemes provided under this unit.

1.18 Uplifting the Education Level of the Dayaks

Dayaks still lag behind other races in terms of their overall educational achievements as wellas the number of professionals and technical experts. Poorly equipped rural schools, thelack of exposure and the lack of opportunities are the three main hindrances. Poorequipment includes the lack of coaching and examination guides that result in poorexamination results obtained by rural students. Lack of exposure limits the imagination ofDayak students especially in terms of career choices. The overall result is thedisproportionate number of semi-skilled and unskilled Dayaks, many of whom are doingmenial jobs all over Peninsular Malaysia.

To uplift the education level of Dayak students and to ensure Dayaks are competent in

various professional and technical fields, a SADA Education Fund of RM120 million isproposed. This fund will be utilised in the following manner:

RM30 million to set up kindergartens in the rural areas to cater for rural children. Sincemany Dayaks are of the Christian faith and some churches run programs for pre-schoolstudents, the allocation here may also be channelled through church run kindergartenprogrammes. While the main beneficiaries of this scheme will be Dayaks, children fromother race