Crucial for Sarawak to have fiscal flexibility — Soon Koh

We need to have the fiscal and financial flexibility to manage our resources.

KUCHING: The Sarawak government is compelled to take up a more robust and strategic way in managing its financial affairs in order to for it to have fiscal flexibility required in strategising and implementing its development programmes and projects.

In stating this, Second Finance Minister Dato Sri Wong Soon Koh believes that Sarawak is at a critical stage of development where it needs to ‘ leapfrog’ its infrastructure development throughout.

He says to do so would require significant resources and capital funding; hence, balancing the fiscal needs becomes critical at this juncture.

“We need to have the fiscal and financial flexibility to manage our resources.

“Managing fiscal and financial affairs of Sarawak, which is large and diverse in its geo-economic and socio-political landscapes where we have to balance the multiple demands against our economic agenda, is indeed a challenging and uphill task – I must say.

“In order to achieve this, we are compelled to take up a more robust and strategic effort in managing our financial affairs without compromising the practice of good governance, strict financial discipline and prudent financial management across all levels – and at all times,” he told the august House when delivering his ministerial winding-up speech during the DUN sitting yesterday.

Wong – also International Trade and E- Commerce Minister – reiterated that leveraging on alternative financing to facilitate and expedite growth in Sarawak should be a sustainable platform to adopt.

“It will allow the state the fiscal flexibility required in strategising

Dato Sri Wong Soon Koh, Second Finance Minister

and implementing its development programmes and projects,” he said, pointing out that other countries such as Singapore and Japan are also sourcing funds from the capital market to facilitate growth.

Commenting further, Wong, who is Bawang Assan assemblyman, stressed that any development would require a considerable amount of expenditure at the outset of the project. The use of alternative funding, he added, would allow Sarawak to manage and balance its cash-flow requirements – strategically and efficiently.

“With the introduction of the new additional source of revenue from the imposition of our sales tax on petroleum products, our financial capacity would be strengthened further.

“Besides that, the state’s current sound financial position and stable socio-political environment have given it the advantage and ability to attract capital market investors,” he said.

According to Wong, Sarawak’s commendable investment credit ratings of A3 and A- by Moody’s and Standard & Poor’s, respectively, have put it in the radar screen of both domestic and international investment communities.

“Capitalising on these strengths, the state would be able to source for competitive alternative funding to achieve its desired fiscal flexibility.”

Wong also said with such facility, Sarawak would be able to balance and manage its cashflow requirements between the needs of meeting current expenditures and savings of ample reserves for sustainable future – ensuring that funds are readily available so that the development momentum throughout Sarawak could continue without funding uncertainties, maintaining healthy reserves for sustainable future, cushioning itself against any unfavourable global economic condition and ultimately, ensuring financial autonomy of the state.

Wong also told the august House that Sarawak has once again been accorded with a Certificate for Public Accounts for 2017’.

Accordingtohim,therecognition marks the 16th consecutive year of clean record, reflecting Sarawak’s sound financial management and good governance practices, where its financial affairs are conducted in a transparent and accountable manner and in compliance with all applicable rules and regulations.

“This is a testimony to the state’s sound financial management. However, we must not be complacent. Promoting good governance in financial management is an important part of our continuous agenda to sustain a healthy financial position.

“Good governance demands from us accountability, transparency, compliance, effectiveness, efficiency, participatory foremost, integrity.

“These are what we have and inculcated and instilled over the years as an integral principle of our work culture in managing the state’s finances. It is much more imperative now for us to strive and sustain our clean bill of health amidst our effort in taking up the ambitious development agenda of the state and the current geopolitical tensions and global economic uncertainties,” he said.

Wong also reiterated that being a rated state by international and domestic credit rating agencies, Sarawak’s finances are also being monitored by them on a periodical and disciplined manner in accordance to prescribed international financial and accounting standards.

“Being known in the capital markets, the state is under close scrutiny of financial investors who use our affirmed credit ratings to gauge the investment risks in the state.

“Thus, sustaining our commendable investment- grade credit ratings is crucial as these (ratings) are indicators of the state’s sound economic and financial fundamentals,” said Wong.

In his speech, Wong also urge the implementing agencies of state government projects to continue to uphold the value of transparency and accountability in all project implementations so as to ensure value for money, speedy and timely project completion; that the projects would meet the required standards and quality; and most importantly, exercising financial probity and good governance practices.