The envy of debt-ridden Europe

Sabah government departments and agencies have lots of money to spend

Pictures by Ille Tugimin
Video by Flanegan Bainon

Sabah has a happy problem which debt-ridden Europe would like to have: Plenty of money to spend, but government departments and agencies have been slow in spending it. And this displeases Hassanel Tahir, permanent secretary of the finance ministry. He says that up to October only 377.2m ringgit ($119m) or about 36% of this year’s development budget of 1.04 billion ringgit has been spent. Government departments thus have been trying to spend as much of the rest of 665m ringgit before the year ends. This “Christmas shopping” syndrome, says Hassanel, has to stop.

Hassanel told his staff during a recent pep talk that “rushing expenditure as the year draws to a close has to be avoided.” The reason is that such last minute spending creates many creditors in the government ledger which gives the wrong impression of the state’s financial management in its balance sheet.

The state prides itself as a good paymaster. And if projects were carried out in the early part of the year, payments would have been made as they fall due and there wouldn’t have been many creditor accounts in the ledger.

The Sabah government has always paid its debts on time. State finances have got a triple-A from the Ratings Agency of Malaysia (RAM). Malaysia’s auditor-general has praised it for its sterling financial management for 11 straight years. The state has reserves of more than 3 billion ringgit. Moody has given the Sabah government its thumbs up for efficient and proper budget management for three years running.

“Our success doesn’t come easy. Our achievements are the result of careful planning over the years,” Hassanel says.

Sabah is spending 4 billion ringgit next year, its biggest ever, to grow its economy by between 4.5% and 5% to insulate itself from a looming global recession as Europe grapples with its debts.

Next year, says Hassanel, is a watershed for Sabah as 45 billion ringgit of oil and gas projects are carried out. All eyes will be on the Sabah Oil and Gas Terminal (SOGT) in Kimanis, the ammonia and urea project in Sipitang and the gas-fired plants in Kimanis and Lahad Datu.

Chief Minister Musa Aman, who is also finance minister, says next year is politically and economically challenging and he expects full cooperation from his civil servants to get things done. – Insight Sabah

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