KOTA KINABALU: The global economic slowdown is making its presence felt in Sabah, particularly in the manufacturing sector, but the state will remain resilient buoyed by development projects under the Ninth Malaysia Plan (9MP) and Sabah Development Corridor (SDC).

Head of State Tun Ahmadshah Abdullah said the Sabah manufacturing sector is expected to register slower growth this year with a drop in applications for manufacturing projects.

“There were only 11 applications in the first three months of this year compared to 17 in the same period last year,” he said in his policy address when opening the State Legislative Assembly Sitting yesterday.

The sector was the third biggest contributor to the state’s gross domestic product in 2006, at 11 per cent, and had an average annual growth of nine per cent between 2002 and 2006.

He was confident projects for the sector planned under the 9MP and SDC that will be implemented over two years from now would be able to stimulate economic growth.

One such project is the Sepanggar SME Park near the Kota Kinabalu Industrial Park which will be developed into a food industry hub.

The state government through the state Economic Planning Unit and state Industrial Development Ministry is working with the Halal Development Corporation in developing the Sepanggar SME Park.

Another sector that would be affected is tourism, although only slightly, with a marginal decrease of three per cent in tourist arrival this year from the 701,198 recorded last year.

Revenue from tourism is therefore expected to decline to RM3.90 billion this year from RM4.09 billion last year.

Ahmadshah said the slight drop is due to various tourism attractions available in Sabah that offer tourists value for their money.

Being one of the main economic generators for Sabah, he said the tourism sector will remain an integral part in the state’s development plan.

It will be enhanced through effective management and development of valued-added tourism products and aggressive marketing.

Focus will be given on providing the necessary infrastructure and logistic network as well as high quality human capital to support the growth of the industry.

In addition, he said the state government, through strategic partnership with the private sector, would take integrated measures to ensure sufficient five-star accommodation in Sabah.

To complement these measures, Ahmadshah said it is vital for the public sector, corporate bodies and the general public to support the effort by helping to create a clean, comfortable and friendly environment.

Despite the drop in tourist arrival, Sabah showed an increase in MICE activity with participants growing from 41,000 in 2007 to 57,000 last year, representing a staggering growth of 40 per cent. MICE is an acronym for Meetings, Incentives, Conventions and Exhibitions.

The oil palm industry in Sabah remains lucrative with prices of crude palm oil (CPO) expected to remain stable.

“With prices between RM1,800 to RM2,000 per metric tonne, the drop in the export of CPO is not that significant,” Ahmadshah said.

Sabah’s main export destinations such as China and India were still forecasting high economic growth of between five to six per cent.

The move by India to reduce import duties on CPO was also a good sign for the state’s CPO export and oil palm industry.

He noted that Sabah’s total trade value of RM17.2 billion for Jan to Nov last year was still showing positive growth compared to the RM6.3 billion recorded for the same period in 2007.

The import and export value, however, started to decrease in November last year.

Similar to other nations, he said investment and private sector activities in Sabah will not show significant growth as investors were still adopting a wait-and-see approach in view of the global economic uncertainty.

The newly announced RM60 billion stimulus package however, will be able to boost investor confidence, he said.

Sabah also managed to avoid any serious retrenchment of workers with statistics from the State Manpower Department showing 324 people from 41 companies in the manufacturing, agriculture, hotel and restaurant sectors laid off between August last year and March this year.

Only 244 employees from three companies suffered pay cuts.

The assembly was adjourned to Monday.

New Sabah Times