Tough but hopeful economic landscape ahead

HE business community in Sarawak is hopeful that the economy will perform even better next year.

Despite predictions by most analysts of a challenging year ahead due to external factors like the ongoing war in Europe and the Middle East, there is hope that the government will enhance service delivery and implement policies to improve economic growth prospects.

Jonathan

“We hope there will not be any further upward adjustment of the interest rate, so the spending sentiment of consumers is not adversely impacted,” said the Kuching Chinese General Chamber of Commerce and Industry secretary general Datuk Jonathan Chai.

“With the largest 2024 State Budget tabled last month (Nov 2023), we hope to see spin-off effects from all the development projects, providing a ‘cushion’ to local businesses in the anticipated challenging times ahead.

“On that note, we hope lawmakers and politicians will focus their energies and efforts on reviving our economy rather than wasting time on unproductive politicking,” he added.

Expressing further hope, he noted that Prime Minister Datuk Seri Anwar Ibrahim’s efforts and travels to countries like China, the United States, and Japan might bring investment deals to fruition in the coming year.

“With the recent implementation of visa-free entry for citizens from China, India, and several Middle Eastern countries, to boost tourist arrivals and the economy, sectors like airlines, retailers, and food and beverage outlets are expected to benefit from such visa liberalisation.

“We expect that the exchange rate between the Ringgit and the US Dollar will stabilise, helping to ease inflationary pressures on imported goods,” he continued.

Meanwhile, the Federation of Chinese Associations of Sarawak president Datuk Richard Wee said that federal policies closely affected the state’s economy, impacting the business community with measures like capital gains tax and service tax increases.

Richard

“The business sector is going through a rough patch, and the nation’s outlook is uncertain. We always wish for stability and certainty in economic policy.

“The current weak Ringgit rate is a major concern as it affects most goods prices and impacts overall inflation. Sarawak faces these issues directly,” he said.

However, he added that state government achievements, like record revenue and a thriving tourism industry, might indicate a positive outlook for Sarawak.

“Including infrastructural projects by the state government has provided many opportunities for the building and construction industry.

“While this may mitigate some overall concerns, the general economic outlook remains cautious and uncertain.

“For Sarawak, efficient, effective, and transparent implementation of well-defined policies and strategies is crucial,” he further added.

Wee hoped that 2024 would continue the strategies and initiatives of the state and that the federal government will address fundamental economic issues with business-friendly policies.

The Orang Ulu Chamber of Commerce and Industry (OUCCI) president Datuk Mutang Tagal expected 6 to 7 per cent economic growth in 2024 to stimulate business, employment, tax revenue, domestic demand, and consumer spending.

Mutang

“OUCCI also hopes for increased tourist arrivals in Sarawak next year to earn more foreign exchange.

“With increased domestic demand, spending will create multiplier effects throughout the value chain.

“OUCCI also wants full employment in its labour force and hopes the government won’t simply increase the minimum wage, as many SMEs with less than 10 workers struggle to pay their staff,” he said.

Mutang also wants the federal government to reconsider the progressive wage policies if they severely constrain management.

“We also want subsidies in Sarawak and Sabah to remain until households and businesses are ready for change.

“With a vibrant economy, OUCCI hopes the government will empower farmers and fishermen in Sarawak and Sabah, providing incentives and close supervision for growing food under revamped subsidies.

“For instance, a sum of USD290 billion was made available to turn Singapore into an agricultural powerhouse,” he said.

He also wants the government to ensure the Consumer Price Index (CPI) remains satisfactory for consumers.

“Day-to-day product prices needed by households must be kept at a minimum ceiling price to ease their burdens.

“Corruption must be eliminated at all levels, and with Sarawak moving into new sources of renewable clean energy, we should be able to generate significant revenue for the state,” he added.