You are a political expert, so I would like to start with a question that looks much at a global perspective on the political scene. The 19th century was the century of Britain, during the Pax Britannica, and then the 20th century was the century of the US. Many political experts have conflicting views about the 21st century. Some people say it is going to be the century of Asia, while other experts emphasise the fact that we are now living in a multi-polar world. What do you think is role of Asia in this century?
I think it is a matter of perspective. It is a question on how you determine entities that dominate the century, whether taking up the political perspective or the economic power, or a mix of all. And from Malaysia’s point of view obviously these are perspectives that we seldom go against. Malaysia has been an active advocate for the ASEAN region, to be a place of peace, freedom and neutrality. And I think that was the principle upon which ASEAN was originally founded and eventually expanded to include other areas of political jurisdiction. Looking at ASEAN now, it is evident that we are an entity encompassing different types of government and different political and economic structures. For example, there are Vietnam and Cambodia, which have been added to ASEAN in the second half of the ‘90s, that are still basically having different governance structure in comparison to the ASEAN founding members, although their economic system is very close to that of the other countries in ASEAN. On the other hand Malaysia, Singapore and Philippines have always been democratic countries, while Brunei is a monarchy. I do not want to make judgments on Myanmar, but I think they are moving towards the direction which has been the vision of ASEAN. So, the way how I look at it actually is that the world now is heading towards multilateralism. In terms of power structure you might talk about multipolarity, but it looks like there has always been shifting in power positions depending on alliance. That’s why it is difficult to say whether this will be the Asian century or America. I’d rather interpret it as a century where we will witness a convergence of various influences, political considerations, economic developments, resources, human capital… All these aspects will interact in a manner that they will challenge the status quo . So I think we are talking about the emergence of the global village, the globalised structure the product of these influences but at a global scale; ASEAN is going to be one of the key places in the global community. And Malaysia will leverage ASEAN and interact within that structure.
Many economists are talking about a global division of labour, where entire regions of the world will specialise according to their competitive advantages. For example, Sub-Saharan Africa will be the global supplier of agricultural products, whereas China and India will be the global suppliers of mid-value manufacturing. Where do you think will the ASEAN region sit in this economic scenario?
ASEAN is comprised of quite diversified economies besides political systems. As for the economic structure, Singapore is obviously the most developed, and it used to be part of Malaysia. In fact, the systems of Singapore and Malaysia are almost identical in terms of political and economic structure, except for the fact the Singapore is a city-state. But in terms of legal structure, of course, the UK has left a reliable system. What was shaped in the past is of relevance: all of us have been locations of commodity production. Production of commodity in those days was so exotic that for some hundred years the Portuguese, the Spanish fought wars to come over to this part of the world. And I think still up to the 19th century we have leveraged our commodity: rubber, tin, timber, spices… But as we moved towards the latter half of the 20th century, we started having major industrialisation measures. They have started gaining considerable traction in Malaysia, but obviously the traction was initially stronger in Singapore, as part of newly industrialised countries in ASEAN, together with Taiwan and South Korea. Eventually also other ASEAN countries started becoming economic powers within the ASEAN Economic Community. They have joined, they have become part of the division of labour and, in terms of economic development, they became low-cost manufacturing centres. Now it is difficult for Malaysia to harbour low-cost industries anymore. But within ASEAN, Vietnam and Cambodia can still play that role. So ASEAN is very diversified. But what happened here in the past was that the more developed centres, Singapore principally, started investing in Malaysia and in other parts of ASEAN. The same applies for Malaysia now, we have started investing in Vietnam. Malaysia is in fact one of the major investors in Vietnam. So, there is a lot of intra-Asian investment and trade. Invariably that will start integrating the ASEAN economies. This investment will eventually precipitate on the area where the countries are currently promoting, for example we are now promoting Malaysia as a location for high technology, and Singapore has already done that. I think it will be just a matter of time because the countries within ASEAN basically still have a pyramid demographic structure. That means, we will have a lot of flexible, trainable, ductile workforce and talents, who can support innovation. I think we will soon reach a point where we will stabilise and become a lot more uniform as a location for high technology. That is just part of the story. There are some areas of ASEAN that have traditionally been very attractive, for example for tourism purposes. We are full of scattered islands, mountains, and wildlife. I believe one of the islands with great potential to be the top leisure island in the world is in ASEAN, the Borneo Island. Sabah, which lies on the Northern part of the Borneo Island has a rainforest, which is reputed to be one of the oldest in the world. I believe the services sector will start to gain momentum. In fact, in Sabah the services sector is most vibrant sector in tourism. Tourism is one of the key drivers in Sabah. The ASEAN region as a whole is very welcoming because we have been so long engaged with global communities, with the Chinese civilisation, the Indian, the Arab, Spanish, Portuguese, English, Italian and others. I think ASEAN will soon be a location that will attract even Europeans to come and work. Right now we are working on this trans-Pacific partnership agreement and there have been talks among the European Commission members that they would like to the proposed ASEAN-EU trade agreement. When this happens, it will not just be a matter of trade of goods, but also services or it might even involve movement of the labour force. That is fine! I think Europe has a totally opposite structure from a demographic point of view, and that could work very well with us. I mean, people from Europe who are experts in certain areas can come here in ASEAN and certain types of labour force we have here might be very suitable in Europe. We could complement each other.
What do you think is SEDIA’s contribution to the transformation of Sabah?
Datuk Yaakub Johari: Well, SEDIA is the authority responsible for the Sabah Development Corridor. Sabah is one of the five development corridors in Malaysia. Since the introduction of the Corridor we’ve obviously seen increasing interest of investors in SDC. The figures on investment are under our regular monitoring. I think the watershed actually can be identified with the launching of the Sabah Development Corridor, with the investments that consequently started gaining momentum. I think the most important thing is the confidence that investors can perceive for the first time. The Sabah state government and the federal government are working at unison, speaking the same language to attract investment and support the private sector. I think this is crucial. The federal government has been allocating development funds to kick start the various areas which we identified as having potential to act as locomotive for the regional growth. Committed or planned investment in the SDC by the end of February 2014 has reached RM128 billion.
Can you briefly describe what are the major projects that are currently underway in the six strategic development areas?
Well, the idea is: each of these strategic development areas has its own projects or economic clusters and these are the locations, which will act as the sites prepared for investment through specific fiscal incentives and infrastructures provided. Development through these projects will then transmit development impulses to the hinterland. The six clusters are economic clusters, which will then transfer the development impulses to the whole state, and each economic zone has its specific focus. For example, within the Interior sub-region there is the Interior Food Valley, where we have started specific livestock projects. The initial funding comes completely from the federal government. This project has already started and now Brunei Investment Agency has expressed its interest in participating and investing in this area. That is unprecedented, private investments are going to the Interior region in Sabah. Other development areas include two palm oil industrial clusters and the education hub in the Sandakan area, in the eastern part of Sabah. The reason for having two palm oil industrial clusters is because these are really the economic “palm-oil belt” of Malaysia. I can say that because actually Sabah is the largest producer of palm in Malaysia, 30% of Malaysia’s palm comes from Sabah. That is why we needed two dedicated industrial clusters in different locations, to address the requirement and to add value to the palm oil sector. Those areas will really add value, leverage and transform the palm oil sector, so that we can start gaining traction also on the bio-tech sector. For example, there is a lot of interest in the use of biomass from the palm oil waste. But now it becomes another commodity, another economic resource. These are areas where, with the application of bio-technology, we can capture a lot more value than just by using palm oil or food, or whatever. As a matter of fact, we have a dedicated cluster, the Sabah Agro-Industrial Precinct in Kimanis, Papar, designed to spawn, nurture and develop the biotech industry in Sabah by leveraging on Sabah’s agricultural and biodiversity resources. We also have the oil and gas cluster. Sabah is the logical choice for this oil and gas cluster, because a quarter of Malaysia’s petroleum and natural gas is actually in Sabah’s water. However, in the past there has been no downstream processing of the oil and gas industry here. Thanks to the initiatives under the Sabah Development Corridor we have now these clusters. Oil and gas industry is a new area in which processing gas is on schedule by 2015. One of the six development areas is dedicated to support the tourism sector, the Kinabalu Gold Coast Enclave. We use the word Gold Coast because the locals call it pasir mas, which means a long stretch of sandy beaches. We have planned that area to be the major area for massive tourism development with high-end resorts, holiday homes, leisure and creative industries.
How are you coping with all the demand you are getting right now?
We really need the investment to be sustainable. I mean, we don’t want them to come in and get disillusioned. We are addressing potential problems just now, for example one key concern is power: we have to address the power supply and we are also exploring the potential of renewable energy in Sabah. In addition to this, we are trying to address issues relating to connectivity, so logistics is another area that we are giving a lot more emphasis recently. Once the manufacturers have started getting the urea out, we will have to address all those areas. We are also assisting in meeting the human capital requirement of investors in SDC. In this regard, we like to see institutions of higher learning and skills development to come to Sabah, especially from UK. I can talk about many more projects but I am just illustrating a few of the many initiatives, just to show our fundamental strengths. Basically, we have considerable resources but in the past we lacked technology, talents and connectivity. Right now we are addressing these and we are beginning to see the results.
How are you finding a sort of trade-off between economic development, capital-intensive development, and the conservation of your natural resources?
That is obviously a very difficult question, because no matter how good are the intentions and measures you introduce, there is always something more to be done. But we are really committed to preserving our natural environment. We recognise it as our natural capital. Even without touching the natural environment, we have been drawing investments. For example, we encourage investments in the Kinabalu Gold Coast Enclave, you can build all these Sheratons and Four Seasons, let them be there! We have some creative industrial clusters like film making and this sort of things. We can have all this there, but in terms of our forests, you can visit them, you can do research, but you should not get anything more than that. That’s what we are doing. So, under the Sabah Development Corridor we have places, like Maliau Basin, it is a unique area of about 75 km in diameter of untouched nature, where no development is allowed. Scientific expeditions in that area have always uncovered new plant species or new insects. In the past few years even large mammals have been newly discovered, in Borneo, in Sabah. For example a large cat, a species of leopard has been discovered in Sabah, which had never been documented before. More recently, a slow loris species has been discovered. You can’t imagine that in an age in which you can spot things from satellite, these species have only recently been discovered! And I believe there are still many more.
I know that the British community is like the largest amongst Western countries here in Malaysia, due to historical and cultural links. There are 300.000 British people travelling every year in Malaysia, and this year thanks to the Visit Malaysia Year the number will be probably doubled. Moreover, 16,000 British people actually live and work here. Most of them, just like a lot of Europeans, love eco-tourism. So, what are the main attractions for eco-tourism in Sabah?
Just to mention a couple. There is Maliau Basin which I mentioned just now. This is literally a basin, 75 km in diameter of unspoilt nature. This is surely worth a visit. You can also do jungle tracking. The area is very much controlled under government agency, but it is open to visit. I have been there but I think not many of our own staff has been there. That is one. I think another area of interest for eco-tourism is obviously the wildlife sanctuary. We have a few of these wildlife sanctuaries around. These are protected wildlife areas, with protected species. We also have the marine park, in Sipadan island. This area is reputed to be harbouring one of the richest resources of marine life, coral life and fisheries. That is one of the richest resources in the world, it is part of the coral triangle. Many conservation efforts carried out by the international community are located in that area. So Sipadan is also a must, although the access is tightly controlled there, because we want to carry capacities to protect the environment. I think another area which is worth a visit for the British is an education and research centre, the Danum Valley Field Centre Lab. It might not be a tourist attraction but it is a place people should visit, because Prince Andrew and Princess Catherine just visited that area. The king of Denmark has also visited the Danum Valley. It is basically a research centre, an educational area. It was initiated together with the support of the Royal Society of London. It has been there even before the Kyoto Protocol. In fact some of the earliest initiatives had to do with carbon sequestration. And these projects preceded the Kyoto Protocol! When the Kyoto Protocol personnel went visiting the place, they regarded that area as complying to the concept of the Kyoto Protocol. And those areas are teeming with researchers. I think it could be quite a surprise visiting that area, you could feel like in a foreign country because of the number of international researchers. You should really visit it and take pictures!
The Sabah Development Corridor has entered its second phase that will end in 2015. What would you say are the benefits and incentives for UK investors to place their investments here in Sabah?
Firstly, they can have access to the dynamic ASEAN economies. Sabah is very centrally located in order to be linked to these ASEAN economies. ASEAN itself is a huge market, with a population of 600 million. Then, we are neighbours to China, so you can use ASEAN as a bridge to China. At the same time we are very rich in natural resources. We already mentioned oil palm, marine resources, oil and gas, rubber. Mining is also done in some areas, but in Sabah we don’t quite encourage it, unless we are convinced that the preservation of the environment can be addressed. Actually Sabah is also rich in gold. But our government doesn’t promote aggressive investment in the mineral sector primarily because of the concern for that environment. Maybe if someone came with a very good technology we could take it into account. The Maliau Basin for example is very rich in high-quality coal deposits, and in the vicinity high-quality gold. So within the Sabah Development Corridor we don’t highlight this but we are very rich in minerals as well. Let me put it this way: in the past, before we really became fully aware of the implications on the environment, we did heavy logging. Timber was the main activity of the state’s economy for some time. But this is no longer the case. We have now realised its importance, but together with this we have also realised many other things: we have granted concessions to one company to mine the copper, and they were mining it. But what is left behind is that we are not happy about it. The government decided not to promote the mining sector. For the oil and gas, instead, that is fine.
I know you spent a lot of time in the UK, you made your studies there, so: what are your best memories about the time you spent in the UK?
I stayed with an English family in Brighton. We had classmates from Germany, from Japan, Africa, Latin America, even America. And it is really exciting to have contacts with people from so many parts of the world.. With all of these smart people you increase your self-awareness, you see the value of understanding a lot more people with different practices, different beliefs. And I think in Malaysia this is very important, as for many other parts of the world. You can’t change people but the best thing is to learn to live with them, to understand them. Having stayed in the UK, I think I can understand this much better. Secondly, I remember the engagement with the academic staff, they are very approachable. I remember my school days in the boarding school, when my teachers were very strict. Boarding schools are very rigid! But when I went to study in the UK, surprisingly the lecturers, academics, were very approachable. What I liked is, they don’t seem to disagree with you but they keep asking you questions, so I think that critical method, that critical engagement, the way they foster students do really affect, for example, the way you do statements later. In fact, at Sussex our initial encounter was to have a lesson from the course in critical reading, writing and reasoning. It’s an interesting scenario, if we think at our society in Malaysia, where we seldom talk about differences. We could argue on differences but we seldom talk about differences of views. In the UK, we can sit all together having the seminar, arguing about the ideas presented by a person, but this doesn’t mean that we disliked the person, we were engaged in the discussion! The constructive dialogue that I liked about the academic staff.
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