Sarawak’s key economic sectors on course

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Sarawak’s Minister of Housing and Tourism, YB Datuk Amar Abang Johari Tun Abang Openg, together with Inside Investor’s Marta Molina (left) and Sara García Arjona

Housing and tourism are two core economic sectors in Sarawak. Inside Investor met YB Datuk Amar Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg, the state’s Minister of Housing and Tourism, to ask him about current developments and future challenges.

Q: What are the current challenges of housing and urbanisation in Sarawak?

A: Housing is a social tool to provide amenities and to serve the needs of the community in the context of the current development that is taking place in the country. Of course, one of the challenges is to get the private sector to play the leading role in providing a certain segment of the houses that is needed by the local population and expatriate workers alike. Especially the latter are demanding certain standards compatible to those in other developed countries, and their needs are different from the locals. It is a challenge to integrate foreign residents into the housing community. Apart from that, a challenge is to get competent housing providers and contractors as well as professionals such as architects who are able to integrate the local environment as well as the needs of the foreigners. For example, European or Asian expatriates expect a credible international school for their children, and high-standard medical facilities. For the local population, everything must be within their reach. And when we provide apartments or townhouses, the prices must be within their affordability, meaning that we have to balance the costs and the price.  However, construction and building material prices are increasing, but the salaries of the people are not, which is another basic challenge for us. We are closely monitoring the pattern of people’s wages. The basic income is now RM800 in eastern Malaysia, meaning that houses for the lowest income segment have to be calculated accordingly. For the farmers and self-employed, we also have to find out their bracket of income to calculate house prices. We are simulating all these cases based on demography and other research as we cater to all segments of the population, rural and urban residents, professionals, the middle class, as well as the lower-income groups.

Q: Which developers have you attracted for housing projects?

A: They are all local firms. Among the listed companies are Hock Seng Lee, Naim, CMS, and Ibraco, for example. The population in Sarawak is not that big with about 2.7 million, and I think we can manage the local housing needs. We develop different types of housing for the rural and the urban population, but the basic amenities such as schools, medical facilities, and security must be considered.  We have a master plan that runs forover the next ten years, and we are on course.

Q: How close are you to fulfilling this goal of providing appropriate housing for all?

A: We have reached certain targets. A good cooperation between the federal housing agencies is very important, because while we provide the land, they provide us the funds. Our macro-planning is formulated in such a way that we work together with the federal bodies to meet the various needs of our population and the expatriates. For instance, in Kuching and Bintulu we have realised a couple of well-accepted high-end housing projects for the higher income group including expat professionals. There are many other examples where we have met the standards for this target group.

Q: What opportunities are there for investors coming to Sarawak?

A: The general focus of the state lies on SCORE and the manufacturing sector. With regard to housing, the private sector is involved as housing provider in our development projects.

Q: What are the strategies and objectives of the Ministry of Tourism? What can be done to achieve the full potential for tourism in the state?

A: Sarawak is still an unchartered waters for many. For tourism to prosper in this part of the world, we need to emphasise on our biggest advantages. Sarawak has a large biodiversity, we are rich in culture and traditions, in natural habitats, and so forth. This is our strength. However, because Sarawak lies on an island, we need to have better connectivity in terms of air transport without transit. We need point-to-point connections. Our connectivity with the outside world is somewhat restricted. Although there are direct flights from Singapore or Kuala Lumpur, it remains difficult to come to Sarawak from farther away, and the travel costs must remain within the people’s budget. There are AirAsia and Firefly (no longer fly to Sarawak), but the costs are at the level of Malaysia Airlines, and they don’t provide the linkages. At the moment, I am trying to solve this problem. It’s one of the reasons why we find it difficult to bring tourists to Sarawak. There have been talks with the Prime Minister and the aviation industry on this and the response is positive.  We hope to settle the issue by the end of the year.  However, we know that aviation is very competitive and not an easy business, which means we need to have the right business model.

Q: What is the contribution from tourism in GDP to Sarawak?

A: The services sector contributes 35.5 per cent to the Sarawak GDP, followed by manufacturing with about 28 per cent, by agriculture with 15.5 per cent, and the rest being mining and resources. Out of the services sector, 11 per cent comes from tourism. This means there is a lot of room for tourism to expand. In any developed country and matured economy, the service sector is the main driver of growth. Manufacturing does no longer play a big role, neither does agriculture. We want tourism to become the core of the service sector. Sarawak has the potential after we have solved the main problems such as connectivity and infrastructure. If tourists come here and see that Sarawak is a beautiful place and has so many advantages, investors will follow. Tourism can be a catalyst in this respect. And in the next five to ten years, tourism will be a much bigger sector.

Q: What are the most important source markets for tourists?

A: Europe is a problem at the moment, not only because of the debt crisis, but also because of the rising airline ticket prices due to the carbon emission regulations and for other reasons. Asia becomes more important with the new middle class emerging in China, India, Indonesia, and our neighbouring countries, These people will have the money to spent here, which is why our future market focus lies on Asia.

Q: What about travellers from the GCC?

A: It depends very much on the taste they have. Do they want adventure, do they need facilities of a certain level? If we can provide that, then they will come over with their whole family including their maids. We know that they need their own enclave. Whether we are able to provide that is a different question. Such facilities are not ready yet, I don’t want to over-promote it as of now. However, if there is a billionaire investor from the GCC who wants to develop his own enclave here, then he is very welcome.

Q: What investment opportunities do exist for private players in the Sarawak tourism sector? What are the incentives for investors?

A: The main incentives are tax holidays, as for any other industry. It is important that the business roadmap of the investor must be clear and he is able to reach his targets successfully, even if the development is slow.

Q: Are there any new hotels on the horizon?

A: There are a few coming up, among them the one in the Merdeka Plaza shopping mall, and one hotel near the Borneo Convention Center. It’s a combination of five and three star hotels. Many people stay in three star hotels, which is reasonable.

Q: What is your personal message to our readers?

A: Welcome to Sarawak!

 

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Reading Time: 5 minutes

Sarawak’s Minister of Housing and Tourism, YB Datuk Amar Abang Johari Tun Abang Openg, together with Inside Investor’s Marta Molina (left) and Sara García Arjona

Housing and tourism are two core economic sectors in Sarawak. Inside Investor met YB Datuk Amar Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg, the state’s Minister of Housing and Tourism, to ask him about current developments and future challenges.

Reading Time: 5 minutes

Sarawak’s Minister of Housing and Tourism, YB Datuk Amar Abang Johari Tun Abang Openg, together with Inside Investor’s Marta Molina (left) and Sara García Arjona

Housing and tourism are two core economic sectors in Sarawak. Inside Investor met YB Datuk Amar Abang Haji Abdul Rahman Zohari bin Tun Datuk Abang Haji Openg, the state’s Minister of Housing and Tourism, to ask him about current developments and future challenges.

Q: What are the current challenges of housing and urbanisation in Sarawak?

A: Housing is a social tool to provide amenities and to serve the needs of the community in the context of the current development that is taking place in the country. Of course, one of the challenges is to get the private sector to play the leading role in providing a certain segment of the houses that is needed by the local population and expatriate workers alike. Especially the latter are demanding certain standards compatible to those in other developed countries, and their needs are different from the locals. It is a challenge to integrate foreign residents into the housing community. Apart from that, a challenge is to get competent housing providers and contractors as well as professionals such as architects who are able to integrate the local environment as well as the needs of the foreigners. For example, European or Asian expatriates expect a credible international school for their children, and high-standard medical facilities. For the local population, everything must be within their reach. And when we provide apartments or townhouses, the prices must be within their affordability, meaning that we have to balance the costs and the price.  However, construction and building material prices are increasing, but the salaries of the people are not, which is another basic challenge for us. We are closely monitoring the pattern of people’s wages. The basic income is now RM800 in eastern Malaysia, meaning that houses for the lowest income segment have to be calculated accordingly. For the farmers and self-employed, we also have to find out their bracket of income to calculate house prices. We are simulating all these cases based on demography and other research as we cater to all segments of the population, rural and urban residents, professionals, the middle class, as well as the lower-income groups.

Q: Which developers have you attracted for housing projects?

A: They are all local firms. Among the listed companies are Hock Seng Lee, Naim, CMS, and Ibraco, for example. The population in Sarawak is not that big with about 2.7 million, and I think we can manage the local housing needs. We develop different types of housing for the rural and the urban population, but the basic amenities such as schools, medical facilities, and security must be considered.  We have a master plan that runs forover the next ten years, and we are on course.

Q: How close are you to fulfilling this goal of providing appropriate housing for all?

A: We have reached certain targets. A good cooperation between the federal housing agencies is very important, because while we provide the land, they provide us the funds. Our macro-planning is formulated in such a way that we work together with the federal bodies to meet the various needs of our population and the expatriates. For instance, in Kuching and Bintulu we have realised a couple of well-accepted high-end housing projects for the higher income group including expat professionals. There are many other examples where we have met the standards for this target group.

Q: What opportunities are there for investors coming to Sarawak?

A: The general focus of the state lies on SCORE and the manufacturing sector. With regard to housing, the private sector is involved as housing provider in our development projects.

Q: What are the strategies and objectives of the Ministry of Tourism? What can be done to achieve the full potential for tourism in the state?

A: Sarawak is still an unchartered waters for many. For tourism to prosper in this part of the world, we need to emphasise on our biggest advantages. Sarawak has a large biodiversity, we are rich in culture and traditions, in natural habitats, and so forth. This is our strength. However, because Sarawak lies on an island, we need to have better connectivity in terms of air transport without transit. We need point-to-point connections. Our connectivity with the outside world is somewhat restricted. Although there are direct flights from Singapore or Kuala Lumpur, it remains difficult to come to Sarawak from farther away, and the travel costs must remain within the people’s budget. There are AirAsia and Firefly (no longer fly to Sarawak), but the costs are at the level of Malaysia Airlines, and they don’t provide the linkages. At the moment, I am trying to solve this problem. It’s one of the reasons why we find it difficult to bring tourists to Sarawak. There have been talks with the Prime Minister and the aviation industry on this and the response is positive.  We hope to settle the issue by the end of the year.  However, we know that aviation is very competitive and not an easy business, which means we need to have the right business model.

Q: What is the contribution from tourism in GDP to Sarawak?

A: The services sector contributes 35.5 per cent to the Sarawak GDP, followed by manufacturing with about 28 per cent, by agriculture with 15.5 per cent, and the rest being mining and resources. Out of the services sector, 11 per cent comes from tourism. This means there is a lot of room for tourism to expand. In any developed country and matured economy, the service sector is the main driver of growth. Manufacturing does no longer play a big role, neither does agriculture. We want tourism to become the core of the service sector. Sarawak has the potential after we have solved the main problems such as connectivity and infrastructure. If tourists come here and see that Sarawak is a beautiful place and has so many advantages, investors will follow. Tourism can be a catalyst in this respect. And in the next five to ten years, tourism will be a much bigger sector.

Q: What are the most important source markets for tourists?

A: Europe is a problem at the moment, not only because of the debt crisis, but also because of the rising airline ticket prices due to the carbon emission regulations and for other reasons. Asia becomes more important with the new middle class emerging in China, India, Indonesia, and our neighbouring countries, These people will have the money to spent here, which is why our future market focus lies on Asia.

Q: What about travellers from the GCC?

A: It depends very much on the taste they have. Do they want adventure, do they need facilities of a certain level? If we can provide that, then they will come over with their whole family including their maids. We know that they need their own enclave. Whether we are able to provide that is a different question. Such facilities are not ready yet, I don’t want to over-promote it as of now. However, if there is a billionaire investor from the GCC who wants to develop his own enclave here, then he is very welcome.

Q: What investment opportunities do exist for private players in the Sarawak tourism sector? What are the incentives for investors?

A: The main incentives are tax holidays, as for any other industry. It is important that the business roadmap of the investor must be clear and he is able to reach his targets successfully, even if the development is slow.

Q: Are there any new hotels on the horizon?

A: There are a few coming up, among them the one in the Merdeka Plaza shopping mall, and one hotel near the Borneo Convention Center. It’s a combination of five and three star hotels. Many people stay in three star hotels, which is reasonable.

Q: What is your personal message to our readers?

A: Welcome to Sarawak!

 

Do you like this post?
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