Tourism could help Kelantan
AS reported in your newspaper, a major controversy has erupted between the Kelantan state government and the Finance Ministry over the state’s request for a loan from the Federal Treasury to meet its expenditure requirements. The exchange of words turned bitter when the PAS member of parliament resorted to using race and religion to accuse the Finance Minister of being biased towards Kelantan.
It’s a totally unparliamentary behaviour to make such a seditious accusation just because the Finance Minister is Chinese. Whatever race he is, the minister is subject to the laws governing the management of the country’s finances.
As we all know, states do get federal financing through the constitutional provisions for grants – the per capita and road maintenance grants. In addition, there is also the revenue growth grant whereby the federal government will share the extra revenue if the economy grows above the threshold. This formula was meant to help the smaller states get a fairer share of the federal revenue.
However, as the economy has slowed down, and if it is below the threshold, the formula does not apply.
States also get federal loans at cheap rates for their water supply and low-cost housing projects, repayable over a long period.
In the case of Kelantan, it also gets oil money in the form of wang ehsan from the federal government. The state used to receive this money in the form of oil royalty directly from Petronas under its production sharing agreement with the oil-producing states. But this was converted to wang ehsan some 20 years ago, giving the federal government the power to decide what the state could get.
It was a politically motivated decision which the state objected because it was against the original agreement. Also, it could make the state hostage to federal-state politics.
According to news reports on this issue, the Prime Minister had agreed in the recent meeting of the National Finance Council to restore Kelantan’s right to the oil royalty, as it should legally be.
Although it is fair for states to get federal financial assistance, they must also demonstrate a sense of responsibility in spending and revenue collection.
States that spend lavishly on royal palaces and building grandiose sports stadiums should be penalised for wastage of public funds. Previous auditor-general reports have cited the weaknesses in revenue collection at state and local government levels. The Parliamentary Audit Committee should instruct the auditor-general to conduct a thorough review of state finances to identify weaknesses in their budgetary policies and administration and make recommendations so that they can improve on their revenue collection from forestry, mining, land rents, property rates, business licences, entertainment tax and etc.
Kelantan in particular should be thoroughly audited because in the PAS exuberance to support religious activities, they have diverted resources away from the basic needs of the people. In one district, the water flowing from the tap was muddy. The explanation was that the water reticulation pipes were leaking as they had not been replaced due to lack of funds for maintenance by the Public Works Department.
There are also reports of high incidence of divorce, HIV/AIDS, drug addiction, cross-border smuggling and sexual vices, which raise the question on whether the state is spending enough on rehabilitation programmes.
Labour out-migration from Kelantan is much higher than from other states, indicating that it has a serious problem with poverty.
The state should be adopting progressive policies that will create more jobs in the tourism industry instead of scaring away investments in the leisure and entertainment businesses by forcing conservative restrictions on social behaviour. The Arabisation attitude of the state government makes tourists worry about the risks of spending their family holiday on the beaches of Kelantan. The state is killing the goose that lays the golden egg. More tourists would mean more jobs and more revenue for Kelantan.
The state should be made to understand that in trying to project its Islamic image by implementing unrealistic religious codes on personal behaviour, it is hurting its economy and creating the conditions which lead to all kinds of social ills.
The result of making life difficult for the young is that most of them will migrate to look for jobs in other states, turn to vice for a living or join Isis to take their revenge on society.