Sabah CM: East Malaysia will gain from Indonesia’s capital move

Shafie said both Sabah and Sarawak could potentially reap the economic and cultural benefits of sharing the same island with the capital of the world’s fourth-most populated country. ― Picture by Miera Zulyana
Shafie said both Sabah and Sarawak could potentially reap the economic and cultural benefits of sharing the same island with the capital of the world’s fourth-most populated country. ― Picture by Miera Zulyana

KOTA KINABALU, Aug 26 — Indonesia’s move to relocate its capital from Java to Kalimantan will greatly benefit the Borneo region, Sabah Chief Minister Datuk Seri Shafie Apdal said.

He said both Sabah and Sarawak could potentially reap the economic and cultural benefits of sharing the same island with the capital of the world’s fourth-most populated country.

“Of course we are mainly subject to the federal government’s stance but we can ensure our cooperation and relationship continues at the state level.

“I am confident that their move will benefit this region especially Sabah and Sarawak. As an economic powerhouse of the region, they will be able to cause some major economic impact. So yes, we will be affected and we can benefit a lot and learn how to cooperate better and grow our relationship,” he said.

Indonesia’s president Joko Widodo is planning to move his country’s administrative centre from its richest island of Java to an area that forms part of the North Penajam Paser and Kutai Kartanegara regions in its province of East Kalimantan, on the island of Borneo, to ease the pressure on the overcrowded city of Jakarta that is also sinking and to address income gaps in the nation.

Construction is expected to begin in 2021 and government offices will start relocating in 2024.

Shafie said that the timing was especially good as Sabah has improved on its barter trade guidelines that involve, among others, Indonesia’s Kalimantan and the Philippines’ Southern Mindanao.

The guidelines include having no set limits on trade volume and licences, although vendor screening will be stricter, along with the full itemisation and declaration of goods and vessels.

Security authorities also have a larger role in ensuring the safety of goods and trade activities.

Aside from the economic aspects, Mohd Shafie said that barter trade activities will also bring cultural benefits to communities in the three countries.

The old barter trade has evolved to the use of cash, becoming a misnomer, but is still referred to as barter trade in its licence. There are currently 43 licences approved in Sabah’s barter trade zone in Tawau, Sandakan and Kudat.

Barter trading here usually involves the trade of household items like foodstuff and textiles but could stand to be expanded as business and demand grows.

Shafie said that in the past, barter trading made up some RM2 million or so in trade before the state put a stop to it in 2016 to curb cross border crime. Barter trading began again in January this year.

To add to the growing potential, Shafie said that there were also plans to expand the Pan Borneo Highway into Kalimantan from Sarawak as well as Sabah’s Kalabakan district, which could also facilitate trade activities by land.

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