KOTA KINABALU, Sept 17 — Setting up an automotive industry in Sabah would go a long way in boosting the economy and reducing the cost of living in the state, Prime Minister Tun Dr Mahathir Mohamad said today.

Dr Mahathir said that Sabah had a lot of potential, but the state had great prohibitive costs of living from transportation and the cabotage policy.

“I would to think maybe the automotive industry might assemble here because the population here has grown so much. Sabah and Sarawak together can have some assembly business which may bring down the cost. I’m not sure, of course, I’m just guessing.

“Industries must come here. In the future Sabah is going to be the biggest petrochemical producer because the deep water production will begin any time soon,” he told reporters after a breakfast meeting with Sabah Chief Minister Datuk Seri Mohd Shafie Apdal.

Global car manufacturers Toyota and Nissan have expressed interest to set up assembly plants here, with Tan Chong Motor Holdings Bhd recently announcing plans to invest about RM600 million in a plant that would also provide 1,000 job opportunities.

Dr Mahathir is here on his first visit since appointed as prime minister for the second time and said he has seen a lot of growth since his first visit in 1965.

“In the Sabah I saw in 1965, there were no roads outside of Kota Kinabalu. Although Harris has a Jaguar, he can only travel about 20 miles,” he said, referring to former Sabah Chief Minister Tan Sri Harris Salleh.

“Now we will have the Pan Borneo highway, but that will be a little bit slow cause we don’t have the money.”

Dr Mahathir said that after observing Sabah after a long absence, the town was now “quite clean” but there was a lot of potential to develop further.

“What I think should be done is to identify assets of Sabah which can be exploited. You have land, mountain, seas, beaches and low temperatures, which may be good for vegetable-growing. You can supply Malaysia with many agriculture products,” he said.

He said that what stunted the growth of Sabah before was corruption.

“See, when you have to divert money for corruption, that is costing the country.

“But that, I think, will stop because I intend to adopt the Chinese law where we shoot people,” he said.

“Sometimes I joke. But don’t take me too seriously,” he said to laughter from the press and state leaders.