FSI wants govt to focus on helping local industries
KOTA KINABALU: Federation of Sabah Industries (FSI) congratulates the government on their first anniversary of ably ruling Sabah and Malaysia after winning in the 14th general election.
Its president, Datuk Chong Hon Len said they are convinced that the government is serious in developing the State and country in the right direction in partnership with the private sector to build a productive capacity to increase manufacturing, exports and employment growth.
He lauds the government’s industrial is at ion drive to create more jobs to reduce unemployment and diversify the state’s economy through more industrial downstream production which aims to foster industrial development through value-addition, accelerating industrial capacity and growth of manufactured exports.
In this regard, FSI calls for more focused assistance to local businesses and industries.
Sabah must capitalise on its comparative advantage and turn them into competitive advantage, Chong stressed.
“We should put more emphasis on helping local industries, because empirical evidence has shown that Direct Foreign Investment or FDI was not very sustainable.”
For example, it was proven that over the years many FDI industries in Penang had left, he explained, “our industries are hampered due to the lack of capacity.”
“We need to develop our industries in a sustainable manner. This will involve capacity building in human resources, knowledge and infrastructure, facilities, business network.
“We believe that to build sustainable industries, it is vital to involve capacity building for local enterprises,” Chong said.
It is also vital to promote better business linkages as soft infrastructure accounts for better networks to deal with external macroeconomic factors such as commodity prices, exchange rates and global demand for Sabah’s industrial products.
He said Sabah has a lot of comparative advantages, in our natural environment and resources. Costs like agency costs and utilities which are high can be reduced with better efficiency.
“Our government should support more capacity building, reduce the costs of production, especially agency costs like costs of utilities and services, to turn our comparative advantage to competitive advantage,” he said, as well as lowering labour and capital costs through higher productivity and lower taxation rates.
FSI Life President Datuk Seri Panglima Wong Khen Thau said that fiscal measures, such as tax exemption and easier credit lines are as important as policy blueprint that targeted export diversification, integration of SMEs in value added chains, promotion of regional trade, and sustainable industrial production. More aid focus on SMEs was grounded on the fact that they comprised 98 per cent of the manufacturing sector, with impact in employment generation.
The government can incentivise innovation, technology upgrade, physical and human capital transformation and modernization of businesses, with better internet connectivity speed.
The government needs to enhance industrial and export upgrading by establishing a research and development fund to promote innovation, technology adoption and diffusion of sector and product specific technology, as well increased collaboration with tertiary institutions to bridge the scientific gap on technology advancement.
Wong emphasized that higher wage must commensurate with higher productivity and qualifications.
There is a need for a comprehensive structural action plan for logistics and infrastructure for airports, ports, roads and railways, for productive business and industrial development as well to elevate the number of households and businesses connected to speedier broadband internet, in line with the macro-goal of increasing infrastructure access for industrialization growth.
The key determinants of Sabah’s economic growth must be successfully developed for technological and industrial advantages. FSI is always available to provide feedback and assistance to the government.