Friday, January 1, 2010

DUN Sitting (Day One): Ucapan Belanjawan 2010 by Taib

(Nov 01, 2010)


Dato Sri Speaker,

1. Saya mohon untuk mencadang suatu rang undang-undang bertajuk "Suatu Ordinan bagi menggunakan sejumlah wang daripada Kumpulan Wang Disatukan untuk perkhidmatan bagi tahun 2011 dan bagi memperuntukkan wang itu untuk perkhidmatan tahun itu" dibacakan bagi kali yang kedua.

2. Alhamdulillah saya panjatkan kesyukuran kehadrat ALLAH SWT kerana dengan izinNya saya dapat membentangkan Belanjawan Negeri Tahun 2011 dalam Dewan yang mulia ini, dan berdoa agar ianya dapat mencapai tujuan seperti yang diingini.

Dato Sri Speaker,

3. The year 2010 shall be an important year for the State. It marks the first year of the Tenth Malaysia Plan and as such, it offers an opportunity for the Government to unveil its development agenda for the next five years. The State, together with the rest of the nation look forward with continued vigour and confidence as we embark on the implementation of projects in the Tenth Malaysia Plan.

4. We take great pride that the State has been able to achieve its present level of development as a result of our ability to promote unity among our people and to manage our resources effectively. This reflects the resilience and the strength of our people, our social structure and our political will.

Dato Sri Speaker,

Challenges and Development Thrust

5. As we are entering into a very challenging phase of the development and economic transformation of the State towards a High Income Economy, it is appropriate for me to touch on some of the major challenges that we are facing in our effort to develop the State. The State government would continue to focus its efforts on restructuring and transforming the State economy to achieve vision 2020. This is even more critical as our State is moving into the next level of development phase.

6. While we are proud of our achievement, we must not be contented with our current success and rest on our laurels. Instead, we must strive to do better and benchmark ourselves against the best. The future of Sarawak lies in the degree of our efficiency and continuous commitment to manage the State resources effectively. The attractiveness of Sarawak as a preferred investment destination would be strengthened by our ability to upgrade our level of efficiency and management skills from time to time. I am very happy to note that over the years, there has been a marked increase in the degree of commitment among our workforce, with clearer focus and enhanced capability, particularly by wider application of ICT.

Dato Sri Speaker,

7. As the global economy is becoming more challenging and increasingly competitive, the resilience of the State economy in the coming years would determine how far we can attain rapid and sustained economic growth. We will have to restructure our economic base from being merely a production-oriented economy dependent on natural resources, to a more diversified and value-added economy with increasing emphasis on quality, skill and knowledge, to drive us towards a High Income Economy.

8. While acknowledging that challenges ahead are becoming more complex, we must remain focus in our development agenda. The world we are operating in is very competitive, dynamic and at the same time more volatile. In order for us to remain relevant and resourceful, we have to continuously enhance and upgrade our management skills, be more efficient and productive, broaden our knowledge and be creative and innovative. At the same time, we must inculcate more pervasively the culture of good governance and the highest level of integrity, and most critical of all, be agile in facing emerging external challenges, arising from global and regional competitions, and increasing volatility in the world economy.

Dato Sri Speaker,
Economic Transformation

9. In order to ensure sustainable growth, we need to widen our economic perspective and diversify our economy so as to mitigate dependencies on traditional economic activities. We need to focus on our niche and strength. Basically, the transformation of the State economy is no longer an exercise to restructure the traditional economic sectors such as timber and agro-based industries. But it is also increasing the share of the secondary sector, such as value-added activities of timber and agriculture products and tertiary sector, such as transport and communication. Most importantly, the transformation must involve the creation of new sources of economic growth.

10. As we are all aware, restructuring and transforming of the economy is not something that we can do within a short period of time. We need to think far ahead, perhaps twenty years or more. This requires careful and comprehensive planning as well as strengthening appropriate physical , social and economic infrastructures and more importantly in the development of our human capital. These will involve the way we develop our people to be skillful in areas of high technology, management as well as making them productive, creative, innovative and discipline through skilled and semi-skilled training.

Dato Speaker,

11. Among the areas where we must enhance our value-added activities include energy intensive industry, agro-business, food processing, biotechnology, electronic and ICT related fields. Towards realising this objective, we must also enhance our human resource programmes, promote greater application of knowledge and ICT

12. SCORE is a major initiative that has been undertaken by the government to bring about the new source of growth and development to the State. The development will transform the central region of Sarawak into a productive and vibrant economy and ultimately will contribute towards greater growth and development to the State.

Dato Sri Speaker,

13. The State will continue to chart strategic economic transformation in areas it has strength and comparative advantage. The development initiative through the implementation of SCORE is a major effort taken by the State to achieve this objective. Because we are blessed with rich natural resources, we will focus on industries that will best complement the inherent strength of the State. These industries include:-
  (i) Energy Intensive Industry: Due to our vast hydro potential, there is substantial untapped source of renewable hydro energy waiting to be harnessed to attract energy intensive industries. In the long run, huge renewable hydro energy produce in Sarawak will transform the State as a power house to drive the economy of the State and the nation;
  (ii) Pulp and Paper: Pulp and Paper industry is an extension of our current initiative to promote downstream timber activities. We have embarked on establishing forest plantations with Acacia tree to meet the requirement of this industry on a sustainable basis. This is an important component of our timber industry because we have the competitive advantage as far as raw material and logistics are concerned;
  (iii) Tourism: Sarawak with its large land mass of unique terrain and well conserved tropical rainforest where 'adventures live', complement by its rich culture diversity, offers great potential for tourism;
  (iv) Agro and food based and fishery industry: Due to the vastness and the long coast line of Sarawak, there is great economic potential for agro and food based and fishery industries. As of now, Sarawak is opening up one million hectares of oil palm in areas contiguous of each other in the State. The development of oil palm plantations would enhance the potential for related downstream processing industries involving sophisticated biotechnology which would be concentrated in Tanjung Manis. Such value added downstream activities would become the focal point for the Halal Hub in the area. This will also enhance the potential of the State as the major halal hub in the region; and
  (v) Hi-tech Industry: The introduction of hi-tech industry is a long term effort of the State of diversity and restructure its economy to that of knowledge-based industries. The State is confident of the potential spin-offs from the hi-tech industry to other related industries. The same can be said about the opportunities created by the State to attract and retain human capital which is essential to support the hi-tech sector and mitigate brain drain. The hi-tech industry is crucial to bring the state economy to that of a high income. I am pleased that we have managed to attract MEMC, an American based company, to invest in the State, and is presently setting up a plant to produce solar wafer. This is a good beginning for the State to get involved in green technology.

Dato Sri Speaker


14. In 2010, the world economy performed slightly better than initially expected. The International Monetary Fund (IMF) in its World Economic Outlook Report released in October this year estimated that the world economy is expected to grow about 4.8% in 2010 which is stronger than their earlier estimates of 4.3%, as a result of a very strong economic activities in Asia and improved financial performance in the Euro area during the first half of the year. However the momentum of recovery appears to be slowing in the third quarter of 2010 in both advanced and emerging economies and this is expected to continue next year.

15. The IMF anticipated that the world economy will grow at a slower pace of 4.2% in 2011. Private sector demand is expected to be weaker in the advanced economies due to weak external demand as well as budget deficits.

U.S. Economy

16. The U.S. Economy which recovered earlier this year, as a result of macroeconomic policy stimulus and emergency financial stabilisation measures in 2009, is expected to register slower growth in 2011 as consumers face high debt, fallen asset values, weak credit growth and high unemployment. The U.S. GDP growth is expected to slow to 2.3% in 2011 from 2.6% in 2010.

Euro Economy

17. In Europ9e, the road to recovery has been bumpy, largely caused by unsustainable policies in some member countries, worsened by the sovereign debt crisis in Greece in early 2010 which erupted even before the euro area's recovery could gain momentum. The crisis spreads internationally, threatening the financial system as well as regional and global recovery. A strong and far-reaching policy response contained the situation. Unprecedented liquidity and credit support, new European financing instruments, and substantial fiscal action in affected countries arrested the financial turmoil, moderating its adverse impact on Europe's economic activities.

18. The recovery has gained some momentum, but it is likely to be moderate and uneven. Advanced European countries GDP is expected to grow at 1.7% in 2010 and 1.6% in 2011. Emerging European countries growth is expected to be 3.7% in 2010 and 3.1% in 2011. There are marked differences in economic prospects across the region, depending on the condition of public and private sector balance sheets and the extent to which macroeconomic policies can support the recovery.

Dato Sri Speaker,

Asian Economy

19. Asia entered the global crisis on a stronger footing and is continuing to lead the global recovery. In most parts of the region, resilience in domestic demand has offset the drag from net exports. The movement from public sector-driven to private sector-driven growth is well under way in most Asian countries. Industrial production and retail sales have been strong in China and India. Robust activities in these countries in turn is supporting growth in the rest of Asia. In fact, China's strong and sustained growth over the past several years has served as a linchpin for global trade, benefiting exporters of commodities and capital goods. Moreover, unlike in previous recoveries, a turnaround in private capital inflows has bolstered domestic demand by providing access to external financing.

20. The Asian region is projected to grow by about 7.9% in 2010 and 6.7% in 2011. Activity is projected to moderate from the second half of 2010 into 2011. This is due to the winding down of stimulus policy and policy tightening in economies facing demand pressures, as well as the impact from policy adjustments in advanced economies.


21. In early 2010, recovery in Japan was due to the strengthening of its export as a result of the stronger-than-anticipated recovery in the Western advanced economies and strong demand for capital goods from China. However, the appreciation of the yen and the cooling of the U.S. economy will adversely affect Japan's exports such that its growth is expected to slow from 2.8% in 2010 to 1.5% in 2011.

China and India

22. China's economy is expected to remain strong in 2010 with a growth of 10.5%. Sustained growth in retail sales and industrial outputs confirm that private sector activities have gained momentum beyond expectation. China's economic growth is expected to moderate to 9.6% in 2011 as tighter credit controls will cool off the boon in the property market while the government plans to unwind its fiscal stimulus.

23. India's macroeconomic performance has been buoyant, with its industrial production at a two-year high. The robust and huge domestic demand will continue to stimulate India's economic growth at 9.7% and 8.4% in 2010 and 2011, respectively.

24. The rapid recovery in the NIEs has been driven by a rebounding inventory cycle, strong domestic activity, and robust regional demand for these economies' exports, for example, electronics for Singapore, services for Hong Kong and capital goods for Korea. Property markets in some NIEs have been experiencing sizeable prize increases particularly in Hong Kong and Singapore. This had prompted them to put in place appropriate policies to prevent the emergence of an asset price bubble. On average the NIEs is estimated to grow by 7.8% in 2010 and 4.5% in 2011. Inflation expectations are nevertheless broadly stable.

(Malaysia, Indonesia, Thailand, Philippine and Vietnam)

25.The ASEAN-5 economies have also benefited from the strong regional upswing, particularly those exporting commodities and electronics. The broad-based export rebound is now feeding through a self-directed demand-driven recovery, particularly in private investment. Overall, on average economic growth for ASEAN-5 is projected to grow at 6.6% in 2010 and 5.4% in 2011. The growth for the region is anticipated to be underpinned both by exports and domestic demand.

Dato Sri Speaker,


2010 Performance

26. The Malaysian economy is expected to post strong growth this year, led by steady domestic demand and strong export performance. The economy continues to show an impressive growth from both the domestic and external sectors as a result of the two stimulus packages and strong recovery in the global economy. During the first half of 2010, the economy grew at a rapid pace of 9.5%. The continued strong external demand and the revival of private sector investment are expected to support domestic demand in the second half of the year. Accordingly, the economy is expected to expand by 7.0% in 2010 as compared to the earlier estimates of 6.0%

27. On the supply side, growth is expected to be broad-based. The services sector is estimated to grow at 6.5% in 2010 and envisaged to continue contributing significantly to growth, led by wholesale and retail trade, communication as well as finance and insurance sub-sectors. The manufacturing sector is expected to expand strongly at 10.8% in 2010 as a result of strong external demand especially for electrical and electronic products as well as non-electrical and non-electronic items and minerals.

28. The agriculture sector is expected to register a growth of 3.4% in 2010 as compared to 0.4% in 2009. The growth is attributed to higher production of major commodities amid robust exports and higher prices. Growth is also supported by the favourable non-plantation sub-sector comprising fishery, livestock and other food crops.

29. The construction sector is expected to grow at 4.9% in 2010. The expansion is largely led by increased civil engineering activities following speedy implementation of construction projects under the Ninth Malaysia Plan and stimulus packages.

30. On the demand side, public expenditures continue to support economic activities. Growth is expected to be driven by strong business and consumer spending. Private investment is expected to pick up significantly given the improved corporate earnings and capacity utilisation rate across most industries. Implementation of Government transformation initiatives as well as accommodative monetary policy will provide impetus for private investment to strengthen.

Dato Sri Speaker,

Prospects For 2011

31. In 2011, growth of the Malaysian economy is expected to be moderate but will remain strong and expected to grow at 5.0% to 6.0% in line with the expected moderate growth of the global economy during the year. The growth is expected to be supported by private sector investment, expanding by 10.2%, private consumption 6.3% and export 6.7%. The growth will be further supported by the implementation of programmes and projects under the tenth Malaysia Plan which implements the initiatives articulated in the Government Transformation Programme and the Economic Transformation Programme.


32. The inflation rate, as measured by the change in Consumer Price Index, rose to 1.5% in the first eight months of 2010 compared with 0.6% for the whole 2009. The increase was largely contributed by price increases in the food and transportation group. Inflation for 2010 is expected to range between 2.0% to 2.5%.

Dato Sri Speaker,

33. Given the global and national economic scenario for 2010 and 2011, I will now deliberate on the State economic performance this year and its prospects for next year.


34. Our state economy is expected to record a strong growth of 5.4% in 2010 which is higher than 4.5% announced in May 2010 as a result of stronger economic activities during the first half of the year. In 2011, however, the State economy is projected to grow at 5.0%. The expected growth is supported by the implementation of infrastructural projects under SCORE initiatives and projects for rural infrastructures and utilities.

Supply Side

35. On the supply side, growth will be broad-based led by the services sector. The services sector is expected to grow at 7.2% in 2010 with robust trading activities. For the first half of 2010, cargo-related activities at ports in the State increased by 11.6% compared to the second half of previous hear. The air transport segment grew as passenger volume for all principal airports state-wide rose by an average of 9.5% and the air cargo handled increased by 23.1% during the same period. For 2011, this sector is expected to grow at 6.4%

36. The manufacturing sector is estimated to grow at 4.5% in 2010, after experiencing a contraction of 0.1% in 2009. The growth is in tandem with the surge in global demand particularly our LND and wood-based products. The exports of our manufactured goods recorded double-digit growth in the first half of this year at 21.6%. We anticipate the manufacturing sector to continue to do well in 2011 and is expected to grow at 4.5% as the demand for our resource-based sub-sectors is expected to remain robust from economies in the region.

Dato Sri Speaker,

37. The construction sector is expected to grow at 6.5% in 2010, in tandem with the implementation of the stimulus packages, RM1.0 Special Federal Allocations and the remaining projects under the Ninth Malaysia Plan, including the construction of the new Sabah-Sarawak gas pipeline and the Murum hydro-electric dam. For 2011, with the implementation of infrastructural projects under the Tenth Malaysia Plan, the construction sector is anticipated to grow by 5.0%

38. The mining and quarrying sector is estimated to grow at 3.2% in 2010 with increased production for natural gas, coal and silica sand in the first half of the year. The production of natural gas grew by 17.4% arising from increased demand from domestic petro-chemical industries and major importing countries. The mining and quarrying sector is expected to grow at 3.0% in 2011 as the production of natural gas is anticipated to increase to meet the increasing demand especially from our traditional markets.

39. The agriculture sector is expected to register a favourable growth of 5.2% in 2010 as a result of the rebound in commodity prices and improved global demand. With the increase in mature areas and the improvement in yields, the production of crude palm oil grew by 7.8% during the first half of 2010. In 2011, the agriculture sector is anticipated to grow slower at 4.3% as global demand is expected to soften during the year.


Dato Sri Speaker,


53. Let me briefly touch on the Federal Budget 2011. The Prime Minister, in his Budget Speech on 15 October, 2010 has underlined that the 2011 budget is formulated with firm determination to bring significant changes to the nation’s development and well-being of the rakyat. The Government upholds the concept of 1Malaysia as the fundamental philosophy in driving the nation’s development path.

54. The Government Transformation Programme and Economic Transformation Programme will be the guiding force. With this theme “Transformation Towards a Developed and High-Income Nation” the Budget is a precursor in the final efforts towards achieving Vision 2020. The Federal Budget centres on four key strategies as follows:

     (i) Reinvigorating Private Investment
     (ii) Intensifying Human Capital Development
     (iii) Enhancing Quality of Life of the Rakyat; and
     (iv) Strengthening Public Service Delivery.

55. I am happy to note that an allocation of RM1.2 billion is being provided for rural water and electricity supplies for Sarawak in the 2011 Budget. In addition, RM93 million is allocated for the development of SCORE. The budget also allocate funds for Sarawak and Sabah for building and upgrading of rural roads amounting RM2.1 billion and for distribution of essential goods to the interior to standardize the prices across areas amounting to RM200 million.

56. I would like to thank the Federal Government for this provision. I am confident that all the government agencies that are entrusted to implement all programmes and projects would take appropriate actions to ensure that the implementations are on schedule and the sum allocated to the State can be fully utilized.

Dato Sri Speaker,


57. The 2011 Budget is formulated with the view to sustain the desired level of economic growth with equitable distribution and at the same time maintaining conducive climate for business and investment. The Budget also provides foundation to transform the State economy towards that of high income to benefit all the rakyat throughout the State. It also reflects the State Government’s commitment to continuously improve its financial performance and position in order to safeguard its sustainability and financial autonomy.

58. In the preparation of the 2011 State Budget, we have taken into consideration various challenges that we could be facing from the domestic as well as the external fronts. It is therefore imperative that we have to keep abreast not only with the latest external development but also to anticipate the possible outcomes that will have an impact on the development of the various sectors of the State economy.

Dato Sri Speaker,

Review Of 2010 Financial Performance

59. Before I present the 2011 Budget proposal, I would like to give a brief review on the financial performance in respect of revenue and expenditures of the State in 2010.


60. The total revenue for 2010 was originally estimated at RM3,579 million. However, in view of the favourable performance of the economy as well as the encouraging revenue collection up to second quarter of 2010, the projected revenue is now revised to RM3,957 million. This is an increase of RM378 million or about 11%.

61. The main revenue sources that contribute to the increase are:-
     (i) Non-tax revenue
     It is estimated that the revenue from this source would increase by RM367 million, from the original estimated sum of RM2,544 million to RM2,911 million. The increase is mainly due to increase in cash compensation in lieu of oil and gas rights by RM351 million and improvement in dividend income by RM20 million.
     (ii) Tax Revenue
     The revenue from this source has increased by RM11 million mainly from mining royalty, land rents and port dues.


62. For the year 2010, the original provision of RM3,418 million which consist of RM1,318 million for recurrent expenditures and RM2,100 million as contribution to statutory funds is expected to be sufficient to cover the expenditures during the year. As at September, RM889 million or 67% of the recurrent expenditure had been expended, while RM1,575 million or 75% of the contribution to statutory funds had been effected.

63. The Development Expenditures for the year 2010 was revised upwards from the original sum of RM2,777 million to RM2,850 million, an increase of RM73 million or approximately 3.0%. The additional provision, tabled and approved by this august House during its sitting in May 2010, was meant for transport and communication, and social and community development sectors.

64. I would like to inform this august House that up to September a sum of RM1,881 million or 66% of the revised development estimates has been spent. It is anticipated that the actual total development expenditure will increase as those payments will be effected before the closing of the current financial year.

Dato Sri Speaker,

Surplus For 2010

65. I would also like to inform this august House that the State is expected to achieve a budget surplus of RM539 million as compared to the estimated original surplus of RM161 million. The higher surplus is made possible as a result of better than expected revenue and stringent control and discipline over expenditure for the current year.

66. I would like to extend my appreciation to all Controlling Officers and officials in the State Civil Service for their commitment and dedication in ensuring that the State financial position remains healthy. Their continuous commitment in the preparation of their budgets, the supervision and control over expenditure and revenue collections, have contributed tremendously to the financial health of the State. I call for the same level of commitment to continue spending wisely and judiciously. We must ensure that our financial resources remain sustainable to fund out future development programmes and project.

Dato Sri Speaker,

Budget Proposal For 2011

67. I would now like to present to this august House, the Budget Proposal for 2011.

Objectives and Strategies of State Budget 2011

68. In our efforts to achieve greater and more balanced development and to sustain the economic growth, the Budget 2011 will focus on the following key objectives and strategies:-

     First: To stimulate a desirable level of economic activities and sustain economic growth during the year. Budget 2011 will continue to be a development biased budget with RM3,630 million, or about 73% of the total budget being proposed for development and RM1,344 million, or 27% for recurrent expenditure. As a developing State, it is important that we have a budget that is biased towards development;

     Second: To provide adequate fund for the successful implementation and completion of all contractually committed projects brought forward to the Tenth Malaysia Plan as well as other commitments of the State during the year.

     Third: To continue with the long term social and economic restructuring and transformation plan and to ensure fair distribution of development throughout the State. This will ensure better quality of life, create opportunities for investment and employment and ultimately reduce the development gap between urban and rural areas:

     Fourth: The budget will continue to be a surplus budget. This is in line with the State Government continuous effort to strengthen its financial position to ensure sustainability. We must maintain and preserve such financial standing to ensure that the State has continuous funding for its development, and the essential financial level for the development of our energy potential. For the year 2011, the budget is expected to have a surplus of about RM60 million.

     Fifth: To ensure a balanced distribution of development resources and services to the public so that the rakyuat from all regions, especially the rural areas of the State will continue to benefit;

     Sixth: The development allocation will continue to give priority to productive activities in Transport and Communication, Commerce and Industry, and Agriculture and Land Development sectors; and

     Seventh: The budget will give special focus on enhancing the effectiveness of the State Government financial management and the efficiency of its delivery system, while continuing with the strategy of keeping the recurrent expenditure under stringent control. There is a need for growth to be driven by productivey and efficiency. It is imperative that we make concerted efforts to optimize the use of available resources.

Dato Sri Speaker,

Revenue Prospect For 2011

69. In 2011, the revenue collection is projected at RM3,904 million. The oil and gas sector is expected to contribute RM1,629 million or 42% of the total revenue. Of this amount, the major contribution is expected from compensation in lieu of oil and gas rights estimated at RM1,509 million and the balance is from compensation in lieu of excise and import duties on petroleum products. Revenue from this source is dependent on market prices, production level of crude oil and gas, as well as pricing policy on petroleum products.

70. The forestry sector from which the State derives income in the form of forestry royalty, premium and tariffs is expected to contribute RM585 million or 15% of the total estimated revenue. The revenue generated from this sector is expected to continue to be stable as the State continues on its sustainable forest management policy.

71. For 2011, the estimated revenue derived from dividend and interest income is expected to be RM865 million or 22%. The Government will continue to explore potential investments that could bring in steady stream of income in the future.

72. In addition to the revenue sources mentioned earlier, the State is expected to receive RM277 million from sales tax, RM180 million from land premium, RM256 million from other sources of revenue, and RM112 million from Federal Grants and Reimbursements.

Dato Sri Speaker,

Expenditure Estimates For 2010

73. For the year 2011, the Government proposes to allocate a sum of RM3,844 million for Ordinary Expenditures. Of this allocation, RM2,500 million is to be appropriated to the Development Fund Account for financing of development projects while the balance of RM1,344 million will be for recurrent expenditures.

74. The proposed allocation of RM1,344 million for recurrent expenditure in 2011 is a marginal increase of RM26 million or 2% over the RM1,318 million approved for 2010. Out of the amount proposed for 2011:

     * RM485 million or 36% is for personal emoluments;

     * RM486 million or 36% is for supplies and services;

     * RM343 million or 26% is for grants and fixed payments mainly to be allocated to Government agencies including Local Authorities and Statutory Bodies for operating expenditure;

     * RM25 million is for the procurement of assets; and

     * RM5 million is for other operating expenses

75. The budget would continue to focus on improving our productivity and competitiveness. I would like to commend Government departments and agencies for implementing stringent control on operating expenditure without affecting efficiency and productivity. We must manage costs and capitalize on the available resources to produce more and better quality goods and services. All Government departments and agencies must continue to improve their productivity at all levels. They must continue to improve their delivery systems and able to maximize the utilization of resources available to them to provide better services.

Dato Sri Speaker,

Budget Surplus For 2011

76. The 2011 budget proposal is expected to generate a budget surplus of RM60 million in 2011. This is on the basis of an estimated total revenue of RM3,904 million against a total Ordinary expenditure amounting RM3,844 million which includes appropriation to the Development Fund Account. It is important to have a balanced or surplus budget to ensure that the State financial position remains sound and healthy.

Dato Sri Speaker,

The Development Expenditure Estimates For 2011

77. Now I would like to deliberate on the Development Estimates for the year 2011. It is proposed that a sum of RM3,630 million shall be allocated for Development Expenditure. After taking into account the commitment to complete the implementation of projects under the Ninth Malaysia plan, financial and implementation capacities of the State, as well as pending finalization of the Tenth Malaysia Plan federal funded projects, the State development expenditure provided for 2011 are for:

     (i) settlement of contractual payments for projects under the Ninth Malaysia plan;

     (ii) on-going and continuation programmes and projects in the Tenth malayusia Plan as well as other commitments of the State; and

     (iii) priority and high impact projects

78. Of the total amount proposed for development expenditure, RM3,163 million will be funded by the State while RM467 million will be financed by the Federal Government through loans and reimbursable grants.

Dato Sri Speaker,

Distribution Of Development Budget

79. I shall now highlight on the distribution of the development budget for the year 2011. The proposed Budget is fairly distributed to ensure balanced development throughout the State. In our efforts to ensure a balanced distribution of development throughout the State, our Government will continue to undertake proactive measures, including the development of physical infrastructures, especially in less developed areas in the State. There is a need for rural areas to catch up with development in the urban areas especially those that have economic potential that could e harnessed and contribute substantially to the State economy. Hence, we have to give greater emphasis to develop the necessary infrastructure and amenities such as roads, drainage, telecommunication, electricity and water supplies aimed at improving the quality of life as well as attracting more investment into these areas.

Dato Sri Speaker,

80. The sum of RM3,630 million as proposed has been allocated on the basis of projected expenditure requirements for the implantation and completion of various approved projects under the Malaysia Plan of the State in 2011. Allocation proposed for major programmes are as follows:-

     * RM1,737 million of the total proposed development budget is for Commerce and Industry sector, i.e. for implementing various industrial estates projects, entrepreneurs development programme and investments. These also include Government development grant and loans to statutory bodies;

     * RM249 million for the total proposed development budget is for transport and communications especially for the purpose of roads, bridges and ports;

     * RM343 million of the total proposed development budget is for general administration which is meant for the implementation of various programmes and projects to improve government facilities in order to enhance our service delivery;

     * RM635 million of the total proposed development budget is for agriculture programmes such as land development, drainage and irrigation, assistance to farmers, veterinary, fisheries, agricultureal research and forestry;

     * RM447 million of the total proposed development budget is for upgrading and development of various water supplies projects; and

     * RM219 million of the total proposed development budget is for social development and community services including housing and resettlement schemes, sports and recreational facilities.

Dato Sri Speaker,

81. Apart from our own effort, we also seek more funding from the Federal Government under the Tenth Malaysia Plan especially for infrastructural projects for roads and utilities particularly in the rural areas.

82. There is also a need to improve and upgrade public amenities in cities and towns to cater for the needs of growing population, greater urbanization, higher expectation and demands for more sophisticated facilities. Such public amenities, include sewerage systems, drainage networks, waste disposal systems and water supply facilities.

83. The capital expenditure required for the improvement and upgrading of such public amenities are substantial. No state in the country can afford to undertake such development on its own. If the State were to undertake such development, it will not able to realize such development at the speed and rate we intend to achieve. With our close relationship with the Barisan Nasional government at the national level, I am confident that tin the Tenth Malaysia Plan, the Federal government would provide more allocations for the development and upgrading of such facilities.

Dato Sri Speaker,


84. I am pleased to inform this august House that the Auditor General of Malaysia has given a clean bill of health for our State 2009 Public Accounts. This is the 8th consecutive year we received an unqualified report. I would like to urge all Controlling Officers including all heads of Ministries, Departments and Agencies to view the observations and weaknesses highlighted in the Auditor General’s report seriously, and to take remedial actions to ensure that similar weaknesses would not recur. And I also wish to emphasizes that we must continue to sustain our clean bill of health into the future years. I would like to bring to the attention to the press to give a balanced report of the Auditor General’s comments so that the financial position of the State is not being misunderstood by the general public.

85. The State Public Account is not only subjected to the audit and scrutiny of the Auditor General Malaysia, its finances are also being monitored by the rating agencies on a periodical and disciplined manner in accordance to prescribed high international financial and accounting standards. All State Statutory Bodies and Government Linked Companies are also required to comply with the same.

86. The State must continue to be disciplined and prudent in its financial management to maintain its sustainability and financial autonomy. There is even greater responsibility for the State to be more vigilant in upholding the higher standard of prudent financial and resource management, transparency, accountability and good governance as the State is rated by both international and domestic rating agencies.

87. All strategies and control mechanism which are in place have been part and parcel of our pro-active financial management strategy. While we are proud of our financial performance, we must continue to work hard and work smart in order to preserve the State’s prosperity and political stability.

Dato Sri Speaker,

Sustaining State’s Investment-Grade Credit Rating

88. The international rating agencies, Moody’s and Standard & Poor’s have both affirmed and maintained the State’s credit rating at Baa1 with Positive outlook and A- with Stable outlook, respectively. Local rating agencies, both RAM and MARC also maintained State’s credit rating at AAA, with Stable outlook. These are commendable investment-grate credit ratings that indicate the strong confidence and acknowledgement of the rating agencies of the State’s sound financial position and effective financial and fiscal management. In other words, this is another benchmark in assessing the effectiveness of the State’s financial management and discipline in managing our resources.

89. It is important to take note that the affirmation of the current credit ratings can be reviewed and revised. We should not be complacent with the affirmation of the present commendable investment-grade credit ratings. Instead we must at all times be alert to any eventuality, in view of the world being not as optimistic as originally predicted.

90. It is very critical for the State to ensure its commendable investment-grade credit ratings are sustained. This is crucial in meeting our effort to attract more foreign investment to the State and to secure confidence among international investors to invest and to actively participate in developing in the State. Private sector investment is vital to the State especially in our effort to drive and realize the success of our development projects such as SCORE, which shall bring the State’s development growth to the next level.

91. As such, continuous efforts must be further intensified to enhance and strengthen our social and economic policies, budgetary discipline, prudent and conservative financial management, and above all, politically stability in the state to ensure that the State sustained its commendable credit ratings.

Dato Sri Speaker,


92. The task of developing the State does not rest with the Government alone. Every Sarawakian has an equally important role to play in ensuring the State achieves further progress and prosperity. All of us must continue to be committed and determined to work harder. The commitment from all levels of society will give us the strength to face the challenges and to emerge much stronger.

93. We will continue to emphasise public-private sector partnership. The private sector must be committed and actively involved in the development of the State. The private sector must be further nurtured to be able to take a larger role as the engine of growth as outlined under the New Economic Model. They must enhance their productivity and competitiveness. I am confident that the private sector in the State, big or small, will continue to take this challenge and work together with the State Government to achieve our development agenda which ultimately will benefit all.

94. Given clear policy directions, strategies and objectives, I am confident that the State will achieve the growth and development objectives which it has set. Through this economic transformation, I am confident in the long run the State will be able to achieve the High Income Economy status. Every rakyat will benefit and has a share of it.

Dato Sri Speaker,


95. I am proud to highlight some of the major achievements of the State economic development which have benefitted the rakyat as a result of our politics of development. These successes cannot be denied and has built a strong foundation for the second wave of development.

GDP Per Capita Income and Quality Of Life

96. Sarawak has progressed tremendously with the implementation of our development strategies that has introduced activities to add value to our agro-based economy and to expand our manufacturing sector. We are now laying the foundation to transform the State economy to a capital-intensive and knowledge-based economy thereby, moving it up the value chain to becoe a high income and advanced economy.

97. Our development strategies implemented over the years have successfully increased the income level of our people. Our GDP per capita has increased more than 48 times from RM690 per capita in 1963 to RM33,507 per capita in 2009.

98. In term of quality of life, our people have enjoyed greater access to public health and education facilities and services. To-date, we have 560 government health facilities such as hospitals and clinics compared to only 85 in 1963. The health services coverage has been extended not nly in towns but also in the rural remore areas.

99. The quality of our education has also improved remarkably. Now our children have greater access and opportunity to the institutions of higher learning and skills training. Currently, we have one full university, UNIMAS and local campuses of national and international universities. This of course has made higher education becoming much more affordable for our people.

Dato Sri Speaker,

Poverty Eradication

100. The incidence of poverty in the State has been reduced sharply from 60% in 1970s to only 5.3% in 2009. The average households monthly income has risen by eight times from only RM426 in 1970 to RM3,581 in 2009. The success in reducing the incidence of poverty is attributed to the various poverty eradication programmes and projects implemented by the Government. We will continue to help the low-income group particularly the hardcore poor as envisaged in the National Key Result Area for Low-Income Households.

Amenities and Infrastructure Development

101. The rapid development of basic amenities and infrastructures is a crucial impetus for the accelerating of the growth and development of the State as well as to enable people in both rural and urban areas to enjoy better public facilities and improve their quality of life.

102. To-date, more than 21,000 km of roads have been built throughout the length and breadth of the State. An additional 918 km of rural roads will be built under the national key result Area for rural basic infrastructure by 2012. More roads and bridges will be constructed under the Tenth Malaysia Plan.

103. The electricity supply coverage in the State has increased from 34% in 1980 to more than 70% in 2009. Similar progress has been achieved in the provision of clean water supply whereby 80% of the population have enjoyed clean water. This is in spite of the not only widely scattered settlements in the rural areas but the small size of the settlements where more than 60% of the settlements are having less than fifty families. Further improvement will be made in these two areas with the implementation of the National Key Result Area for rural basic infrastructure. It is targeted that the coverage for electricity will increase to 95% and water supplies to 90% by 2012.

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