Bankruptcy? DCM says auditors gave Sarawak finances ‘clean bill’ for 17 years straight

Sarawak Deputy Chief Minister Datuk Awang Tengah Ali Hasan says the state is far from bankruptcy as alleged by DAP’s Lim Guan Eng. ― Picture by Sulok Tawie
Sarawak Deputy Chief Minister Datuk Awang Tengah Ali Hasan says the state is far from bankruptcy as alleged by DAP’s Lim Guan Eng. ― Picture by Sulok Tawie

KUCHING, June 26 ― Sarawak is far from bankruptcy as alleged by DAP’s Lim Guan Eng, Datuk Awang Tengah Ali Hasan assured domestic investors today, pointing to the state’s healthy credit ratings and audit records.

The state deputy chief minister said international rating agencies such as Moody's and Standard and Poor's have regularly affirmed Sarawak’s credit rating at A3 and A- respectively.

The A3 rating ― after AAA, AA1, AA2, and AA3 ― is Moody’s system to indicate low credit risk as is Standard and Poor’s A- rating.

“Similarly, the Auditor-General of Malaysia has also accorded Sarawak with a clean bill of financial health for the past 17 consecutive years,” Awang Tengah said at the Sarawak Domestic Investment Seminar here attended by 250 investors and businessmen nationwide.

The state industrial and entrepreneur development minister added that Sarawak’s Budgets have always been focused on developing sectors that are productive.

“We have steady sources of revenue, especially through the imposition of sales tax on petroleum products for exports,” he said, adding that this is a new stream of revenue for the state.

Awang Tengah also said states do not entirely depend on their reserves.

Lim, who is DAP secretary-general and federal finance minister, told a party dinner last Friday that Sarawak could become bankrupt within three years if it kept coming up with annual Budgets sized at RM11 billion, which would deplete its state reserves of RM30 billion.

Awang Tengah said Lim's statement is unwarranted and was political.

“The finance minister should exercise caution with what he says as his statements will affect the sentiments of the investors not only to Sarawak, but also the country as a whole, particularly the foreign investors,” he said.

He reminded Lim that Sarawak's contribution to the economic development of the country is quite significant, citing the state's total external trade for 2017 was valued at about RM138 billion as an example.

Awang Tengah also said that Sarawak continues to be a preferred investment destination, ranking among the top three in the past six years.

He said the state recorded a total investment of RM8.6 billion in the manufacturing sector, third highest after Johor (RM30.5 billion) and Selangor (RM18.9 billion) last year.

He attributed the confidence of domestic and foreign investors to the state government's business friendly policies and its ability to provide modern infrastructure and competitive power and water tariffs.

“We also have abundant natural resources and we also able to provide land for industrial and large scale agriculture with attractive premiums and flexible terms of payment,” he said.

“Above, Sarawak is politically stable and financially well managed,” he added.

The one-day seminar was organised by the Malaysian Investment Authority in collaboration with the Sarawak Ministry of Industrial and Entrepreneur Development.

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