KUCHING, Nov 14 — Sarawak’s Second Minister of Finance Datuk Amar Douglas Uggah today dismissed a claim by state Opposition leader Chong Chieng Jen that the state would go bankrupt in three years with its indiscreet and reckless spending as reported during the State Budget 2020.
Uggah said the claim is not only baseless and irresponsible, but a blatant attempt to continue discrediting the state government’s budgetary system, fiscal and financial management to gain political mileage and cheap publicity.
“The state’s healthy financial standing and our stable socio-political environment have earned us, our commendable investment-grade credit ratings of A-, A3 and AAA by reputable international and domestic rating houses.
“This is a clear testimony to the state’s continuous sound financial management in exercising financial prudence and discipline at all levels, at all times,” Uggah, who is also the deputy chief minister, said in a statement.
“Moreover, the state government is primarily sourcing funding for development purposes from state-owned Development Bank of Sarawak (DBoS),” he said, adding the bank provides competitive long-dated financing to meet the state financing needs at the minimum cost over the long run.
Uggah said the state government will only resort to the alternative funding when in need and if there is a capacity to repay.
He said the borrowing is only for strategic and productive purposes and not for the financing of operating expenditure.
He said the repayment of the financing will be made on staggered basis and spread over a periodic number of years, and provided in the State annual budget.
“Besides that, with the state government initiative to broaden its revenue stream via revenue re-engineering, the state’s financial capacity would be further strengthened to ensure its financial sustainability and ultimately, financial autonomy,” he added.
He said Sarawakians want the state to be better or on par with other states in Malaysia and would want to see the state to achieve developed status by the year 2030.
“We have to build the much-needed physical infrastructures and amenities throughout the state to achieve the economic objective and accelerate economic growth.
“This is critical to lay out the foundation and open up areas for more productive economic activities that will provide greater business and job opportunities,” Uggah said.
He stressed the state government is formulating prudent financial management of its fiscal resources to ensure its financial sustainability moving forward in its development agenda.
“In meeting the financing requirements of this development, the state will allocate annual provision in the State Budget as well as receiving an allocation from Federal Budget.
“However, in Federal Budget 2020, the state will only be getting 7.8 per cent of the total federal development budget which is far from enough to cover the state’s capital programmes and projects, and at the same time, the annual State Budget is also subject to the five-year Malaysia development plan ceiling,” he said.
Uggah stressed that the state government would need to resort for a more robust effort in financing its development agenda via alternative financing initiatives to complement the State Budget in financing its strategic infrastructure.
He said sourcing funding through alternative financing initiatives would not be necessary if the Pakatan Harapan government had fulfilled their promises to allocate 30 per cent of the total annual federal development expenditure to Sarawak and remit 50 per cent of the revenue they collected back to Sarawak.
“Nobody can deny the fact that Sarawak has contributed tremendously to the national economy and federal coffer,” he said.