Declining Timber Revenues Reason For Oil Grab By Sarawak Leaders

The announcement of Sarawak’s 2019 budget, the biggest ever budget in its history at a whopping RM 11.9 billion, came as music to the ears of Sarawakians. After all, Chief Minister, Datuk Patinggi Abang Johari Tun Openg promised that the budget would be one for the people, aimed at accelerating development in Malaysia’s largest state.

However, the reality on the ground indicates a stark difference. Regardless of how big a budget tabled by the current Gabungan Parti Sarawak (GPS) government, it will not be sufficient to move the needle in terms of development, until and unless Sarawak’s biggest enemy is first dealt with – endemic corruption by the political elite.

The bane of Sarawak’s development

Sarawak, a state blessed with an abundance of natural resources, may be the third richest state in Malaysia, but its people are among the poorest – having had the unfortunate circumstance of being governed by an inefficient and fiscally irresponsible government.

The pillage of Sarawakian resources is most evident in the rape of its natural rainforests for timber as well as land grabs by oil palm companies affiliated to timber tycoons. The state’s timber industry is one of the main contributors to the government at a state as well as federal level, making up approximately 49.1 percent of the nation’s total log output.

Similar to other states, Sarawak’s timber industry is based on a concession system which is managed by the state forestry department. 6 private companies dominate the timber industry in Sarawak and these timber tycoons are closely linked to the political elites in the state.

Here, one name comes up more than others, Sarawak’s governor and former Chief Minister of 33 years, Tun Abdul Taib Mahmud. Throughout his time as Chief Minister, Taib abused his concurrent positions as state Finance Minister and Planning and Resources Minister to wrestle ultimate control over the granting of timber concessions and other contracts as well as directorships in Sarawak state run companies.

Taib’s family business empire has benefitted unscrupulously from the plunder of timber in the state with interests in Sarawak’s largest timber and logging companies (Ta Ann, Samling, WTK, Sanyan) as well as monopolistic control of log exports (Achi Jaya Transportation).

The plunder of Sarawak’s resources continues to this day through the well-connected network of companies and subsidiaries owned and operated by members of Taib’s family and his other cronies at the whim of his client state government.

Recently, logging activities by a Malaysian oil palm company with links to Taib have intensified despite its concession facing opposition from the federal government. The forest clearing activities near the Mulu National Park – Sarawak’s only UNESCO World heritage site – threaten to displace the local Penan and Berawan communities who have been living there since time immemorial.

Reports have been lodged by locals against the company for the alleged desecration of a 300-year-old gravesite within the concession area. Local Mulu leaders have submitted a petition to Sarawak Chief Minister to stop the clearing of rainforests, but their desperate pleas have thus far fallen on deaf ears.

Nevertheless, the destruction of Sarawak’s forests to feed the voracious appetite of Taib and his cronies cannot be sustained in time to come. The state which was once close to 80 percent covered by rainforests, is now facing dwindling timber production.

There had been concerns swirling around the sustainability of timber harvest as a source of the government’s revenue since the 1990s, but now, reality has caught up to yesterday’s omens.

Sarawak’s timber exports recorded a decline of 11 percent from RM6.13 billion in 2017 to RM5.44 billion last year. Timber production in the state continued a downward trend with 5.7 million cubic metres produced in 2017 compared to 10 million cubic metres in 2010. It is expected that timber production from natural forests would continue decreasing at 1.7 million cubic metres by 2030, impacting timber downstream activities as well.

Add to the fact that the government’s current expansionary budget wouldn’t be the last, with state elections slated in another two years, focus has now turned to oil as a new revenue stream for the state’s coffers as well as to line the pockets of its corrupt high-level officials.

Main image credit: Zunar

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