FRESH IMPETUS

the local economy can move forward on a sustained basis, or “on its own steam”, so to speak.

This study was done in the United States. If it holds true for Labuan, certainly its current population of about 90,000 may not be adequate to grow on its own impulse.

Hence, clear policies may be needed to generate opportunities to attract more economic activities as well as bring more workers, settlers and their families to the island.

The initial impetus of financerelated activities may have become saturated, and this is perhaps more because of the nature of new financial industries that are highly dependent on information technology and agglomeration of economic activities, for which Labuan may not have the density as yet.

A study to examine the overall achievements of Labuan as the offshore financial centre of the country is worth undertaking now, given the many significant changes in monetary and fiscal development of the country, which may have impacted the attractiveness of Labuan as an offshore financial centre.

The study should also aim to identify the economic constraints of the island.

There certainly is a strong case for encouraging the growth of the real economy and other services, such as tourism, education, sporting events and related government services in Labuan.

These activities will support the island’s financial industry and attract more workers and visitors not only from Sabah, Sarawak and Brunei, but also from Singapore and Peninsular Malaysia.

In fact, one good proposal is to build a bridge to connect Labuan to its nearest point in Sabah. This can encourage greater connectivity and enable freer movement of people and resources between the island and nearby states.

It appears that, in moving forward, the authorities in Labuan may have to be innovative and creative to attract more private investments. This is critical as the island cannot go on relying on government allocations.

As we review the 11th Malaysia Plan and prepare for the next budget, this proposed bridge is worth considering as another source of domestic economic growth and as a strategy to energise the potential for sustained growth in output and employment. In this calculation, the issue of project financing will take centre stage.

However, with an innovative public-private partnership model supported by an adequate concession period, the idea of the bridge can be explored.