But 22 key projects un­der soon-to-be-an­nounced blue­print will be game changer, lead to greater growth

New Straits Times - - Business - RUPA DAMODARAN LABUAN bt@me­di­

AS a global and re­gional cen­tre for in­ter­na­tional fi­nance and busi­ness, Labuan is well-po­si­tioned to ex­pand fur­ther but con­tin­ued to be chal­lenged by lim­i­ta­tions, mostly by its lack of con­nec­tiv­ity.

A bridge link­ing Labuan is­land to Menum­bok in Sabah via Pu­lau Daat is on the cards, and is also in a blue­print de­tail­ing a roadmap for the city come 2030.

Labuan Cor­po­ra­tion deputy chief ex­ec­u­tive of­fi­cer Mohd Zamri Mohd Esa said the bridge would be the game-changer for the is­land.

Con­struc­tion of Phase One of the Labuan-Sabah bridge is sched­uled to be­gin by 2020.

“The blue­print has been ready (for some time). Now we await the prime min­is­ter to launch it, likely some­time this month, af­ter which we can delve into the de­tails of the project,” he told a group of vis­it­ing jour­nal­ists at his of­fice, here.

Labuan en­joys a growth rate of 6.1 per cent, which is stronger than the na­tional gross do­mes­tic prod­uct (GDP) av­er­age. The tar­get is to sur­pass seven per cent by 2030.

By then, the pop­u­la­tion would have grown to 150,000, and the GDP per capita is ex­pected to jump to RM94,127 from the RM54,112 recorded in 2015.

“Tourism and ed­u­ca­tion will be among the main growth driv­ers,” said Zamri, adding that fi­nance and oil and gas sup­port­ing ser­vices would also be a fac­tor.

To many quar­ters, in­clud­ing those from the fi­nance, in­sur­ance and busi­ness ser­vices sec­tors, which con­trib­ute more than half of the eco­nomic ac­tiv­i­ties of the is­land, Labuan lacks di­rect air links or con­nec­tiv­ity to other Asian fi­nan­cial cen­tres.

How­ever, the Labuan In­ter­na­tional Busi­ness and Fi­nan­cial Cen­tre is well-po­si­tioned as a gate­way for con­nect­ing in­vest­ment ac­tiv­i­ties in the re­gion.

Gaps in the fi­nance sec­tion have also sur­faced. For in­stance, the is­land’s Is­lamic fi­nan­cial busi­ness sec­tor re­mains small, while there are gaps in skills for new re­cruits in the fi­nan­cial in­dus­try, lim­it­ing ex­pan­sion.

“Con­nec­tiv­ity must be im­proved to re­duce trav­el­ling time,” he said, re­fer­ring to planned im­prove­ments in air­port, sea­port, ferry and road­way in­fra­struc­ture.

Lim­ited con­nec­tiv­ity also meant the flow of goods and ser­vices to and from the is­land is mostly from Sabah only.

In the area of ed­u­ca­tion, Labuan’s strate­gic lo­ca­tion should see branch cam­puses of the var­i­ous pub­lic na­tional uni­ver­si­ties to serve the East Asean Growth Area (BIMP-EAGA) re­gion, and Asean as a whole.

The is­land also pro­vides the only oil and gas sup­ply base in Sabah and Sarawak. There are cur­rently 200 oil and gas ser­vices com­pa­nies op­er­at­ing on the is­land.

Ac­cord­ing to the soon-to-be-an­nounced blue­print, there will be 22 key projects with 52 sub­com­po­nents — five quick win (within one year) projects, 23 short-term (within three years) projects and 24 medium- to longterm projects.

Labuan was de­clared a fed­eral ter­ri­tory in 1984.

In 1990, it was de­clared an in­ter­na­tional off­shore fi­nan­cial cen­tre.

In­fra­struc­ture devel­op­ment is seen as a key driver to un­lock Labuan’s po­ten­tial as an in­ter­na­tional fi­nan­cial cen­tre.

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