The Malaysian Insight

SABAH suffers from poverty as it lacks the power and funds to end the problem despite generating a considerable amount of revenue for Malaysia, said Chief Minister Mohd Shafie Apdal today.

Shafie said it is time that Sabah’s wealth and the responsibility to develop the state be shared.

“Sabah generates considerable revenue for the nation, but in rural areas there are still people living in poverty.

“If the wealth is shared but not responsibilities, that can also be a problem.

“Half of the Sabah communities are still lagging behind in terms of services, basic amenities, while some enjoy better (amenities).  

“We (Sabah government) aim to bring down the poverty rate to ensure people have access to whatever they need,” he said during his keynote address at the Forum on New Sabah in Kota Kinabalu today.

There are no clear data as to how much revenue Sabah has generated for the federal government since the formation of Malaysia on September 16, 1963.

Taxes, duties, oil, gas and others have been collected by federal agencies, like the Customs Department and the Inland Revenue Board in Sabah.

Article 122 of the Federal Constitution states Sabah is entitled 40% of the revenue collected by federal authorities, but the central government has stopped giving the state’s share since 1974.

Instead, it opted to pay slightly over RM20 million a year, an amount that has not changed since then.

Warisan deputy president Darell Leiking had said the federal government might owe Sabah more than RM1 trillion if arrears are backdated to 1963.

Returning state rights was key election promise Pakatan Harapan made in the run-up to last year’s general election. 

Pakatan Harapan has not delivered its election manifesto promise to raise the oil royalty to 20% from 5% Sabah is presently receiving after taking power after the 14 General Election.

Finance Minister Lim Guan Eng in November last year made it clear that Putrajaya does not have enough funds to pay Sabah its 40% share, as per the Malaysia Agreement

Shafie noted that poverty rate in Sabah has dropped to 2.9% in 2016 from 4% in 2014, but now the state government aims to bring it down to only 1% by 2020. – June 18, 2019.