CM: State reserves not deposited into DBOS (Video)

Posted on : 13 Jan 2020  Source of News: The Borneo Post

KUCHING: Sarawak’s state reserves are not deposited into the Development Bank of Sarawak (DBOS), said Chief Minister Datuk Patinggi Abang Johari Tun Openg.

He said only some money from the state government, government agencies and government-linked companies are deposited into DBOS, which is used to fund the state’s infrastructure development projects.

“It is funding our basic infrastructure especially (for the building of) roads, and also our Upper Rajang Development Agency (Urda), Highland Development Agency (HDA) and Northern Region Development Agency (NRDA).

“Not the hydroelectric dams. Only roads including bridges, water supply and electricity supply,” he said at a special meeting with the press recently in connection with his third anniversary as Sarawak’s sixth chief minister.

He added that the state reserves are still safe and sound in commercial banks.

DBOS was officially launched on Nov 4, 2017 with a RM500 million paid-up capital from the state government to start with.

DBOS is hoped to speed up the state’s development through the provision of financial facilities such as term loans, bridging loans and revolving credit facility for working capital financing, loan syndication and bank guarantees.

Abang Johari explained that under the standard banking system, there would be a statutory reserve where the money could be lent out.

“This is the money DBOS is lending out because the amount would be more than the deposited amount in the bank,” he said.

Abang Johari said he was inspired to create DBOS by the experiences of other countries through history.

One such history was the dire state of Japan and Germany immediately after World War II, where Japan had just experienced two strikes of nuclear bombs, and Germany was trying to recover following the loss of the Nazi regime after World War II.

“The change in the economic development in Japan was because they developed their own Bank of Japan. Germany has International Monetary Fund (IMF).

“As you know, after the war, the United Nations (UN) was not as big as it is now. After that they (Japan and Germany) formed these two development banks. And these development banks provided funding to develop the affected countries,” he said.

Singapore also formed what they called the Development Bank of Singapore (DBS), said Abang Johari, which resulted in the booming economy of the small island-republic state which initially had no natural resources to begin with after it exited from the Federation of Malaysia in 1965.

“Singapore was developed by its former prime minister, the late Lee Kuan Yew with all these modelling.

“And having studied all these, that’s why I formed our DBOS — to provide alternative funding to strategic long-term projects, and these strategic long-term projects are basic infrastructure that will transform our targeted area,” said Abang Johari.

Meanwhile, he also reminded Sarawakians that Indonesia will be moving its capital from Jakarta to East Kalimantan soon, and to look at it as an opportunity to expand and develop the state’s economy further.

He said at the moment, Sarawak is supplying electricity to parts of Kalimantan.

“Indonesian President Joko Widodo even went there (East Kalimantan) to inspect the place. And now Sarawak Energy Berhad (SEB) is negotiating with a utility company in Indonesia on plans to build a hydroelectric dam in Kalimantan,” said Abang Johari.

As for Singapore, he said Sarawak is in very good ties with the island republic, even more so after the state government set up its Sarawak Trade Office in Singapore.

“Singapore also wants to increase their import of our tilapia. Now if somebody has that opportunity, can ask for provisions to open up tilapia farms in Bakun for example. That can increase your income.

“Our agricultural sector also has a lot of opportunities. That is why I’m setting up an agropark. You can plant anything there, and we provide the facilities and infrastructure, using Internet of Things (IoT) or digital technologies,” said Abang Johari.