Call for greater disclosure, accountability on management of DBOS
KUCHING: There is a need for greater disclosure and accountability on the management of the soon-to-set up Development Bank of Sarawak (DBOS) to operate on a financial model to help fund the state’s strategic projects.
Special assistant to Bandar Kuching MP Chong Chieng Jen, Kelvin Yii, said there were risks associated with state-owned development banks as they were politically controlled and generally run by non-elective government officials (bureaucrats).
“A World Bank Report in 2001 has issued a caution regarding state-owned banks saying ‘these banks are run by bureaucrats who pursue personal and political gain, leading to sub-optimal performance’.
“This will then run the risk of misallocation of funds, namely to politically-connected industrialists (so-called crony capitalism) for personal political gains or profits by people in power from these crony deals.
“This means these development loans may only benefit the large companies which are politically connected. Unethical practices, such as funding political campaigns may be further perpetuated in order to obtain approval for such strategic projects without any open tender,” he said in a press statement received here yesterday.
Yii added this would result in higher cost and less effective results at the expense of the people.
“This of course entails higher cost to the government and ultimately, higher cost to the people of Sarawak. This is already allegedly happening rampantly in the state.
“On top of that, the interest of the small and medium-sized companies which are the majority in the state and are actually the ones that have difficulty raising money, may not be properly taken care of.
“This will again result in the further widening of the gap between the rich and the poor in the state.”
Yii said as much as the initiative was welcomed to better fund strategic projects in order to promote socio-economic transformation in Sarawak, it’s essential that the state government set in place a systematic and transparent institutional system to ensure sound and prudent management, audit and banking governance to safeguard and avoid abuses of financial resources and reserves.
“I thus urge for the need of competent and experienced banking experts to establish and manage this development bank, and for stringent audit and system of prudent and good banking governance to be put in place for the operation and running of the proposed development bank.
“We do not want this initiative to be turned into a ‘personal ATM’ not just for those in power, but also for those companies that are politically connected at the expense of and interest of the people and the state,” he said.