Harnessing natural resourcesto help eradicate poverty

from The Edge Daily

by Yong Yen Nie

Although Sabah is rich in natural resources, the people of Sabah, especially those living in rural areas, have not benefited greatly from them.

Sabah’s poverty rate of 24.2% is the highest among states in the country. The problem is compounded by the concentration of population in remote places across Sabah.

A roundtable dialogue organised by the United Nations Development Programme last month found poverty rates to be particularly high among the Rungus (58%), the Orang Sungai (41%) and Sulu and Murut communities (about 35%).

It also found that progress in poverty reduction and equity distribution has been adversely affected by exceptionally high population growth rates, thereby locking themselves into an intergenerational cycle of poverty.

When Prime Minister Datuk Seri Abdullah Ahmad Badawi announced the National Mission that will drive the objectives of Vision 2020, five key thrusts were formed to give the country an overall strategic approach for Malaysia in the ninth, tenth and eleventh Malaysia Plans.

For the Sabah Development Corridor (SDC) blueprint, the socio-economic development approach will be guided by the framework outlined under the Third Thrust of the National Mission, which aims to “address persistent socio-economic inequalities constructively and productively”.

In keeping with the mission, the socio-economic development approach for the SDC will focus on these three overarching objectives — eradicating poverty, reducing income disparity, and increasing access to education.

At the end of its implementation period, the SDC is expected to generate 900,000 new jobs, which is set to improve the livelihood of the locals significantly.

Institute for Development Studies of Sabah executive director Datuk Dr Mohd Yaakub Johari said: “The target is conservative, as the human capital demand will certainly be upgraded once the initiatives begin to materialise.”

Eradicating poverty
Currently, there are 21,568 households under the hardcore poor category in Sabah, of which 13,837 are productive hardcore poor households while 3,715 are categorised as being non-productive (due to old age).

Additionally, 4,014 hardcore poor household heads are categorised as being disabled. (Families with a monthly household income of below RM400 fall under the hardcore poor category.)

Hence, poverty is a major issue in Sabah that needs to be addressed. As such, programmes such as Mesej or Mini Estate Sejahtera will be further intensified, with additional funding to be devoted towards reaching remote areas in Sabah.

Similarly, successes from the agropolitan model for 1,000 poor families in Pulau Banggi will be replicated to other areas with widespread poverty, such as Pitas (1,600 families), Tongod (2,200 families) and Beluran (2,977 families).

Under the SDC master plan, renewed efforts will also be expanded to increase agricultural productivity, as well as to promote rural industries to boost poverty eradication efforts.

For poor and hardcore poor households that have been classified as non-productive, avenues must be found to involve them in the creation of economic value, to bring them out of the “non-productive” category and into the “productive” category.

One of the most effective and proven methods to address this issue is to promote small-scale rural entrepreneurship, using micro-credit financing facilities.

There are various micro-credit schemes currently being operated in Sabah, including Yayasan Usaha Maju (YUM), Bank Simpanan Nasional, Amanah Ikhtiar Malaysia and Sabah Credit Corporation (SCC).

To further promote the availability of micro-credit facilities, development financial institutions and other agencies will be encouraged to set up micro-credit operations in Sabah.

The end objective is to promote social entrepreneurship, based on the model of Grameen Bank in Bangladesh.

Simultaneously, the SDC blueprint will also promote alternative income sources through agriculture activities. These efforts will include the promotion of fruit farming and aquaculture at smallholder level.

Rural industries, especially in handicrafts, will also be promoted, whereby support in logistics, marketing and product development will be provided to spur these industries, as demonstrated by the One District, One Product concept in various villages in Sabah.

Mohd Yaakub said: “With the SDC, we are in a position to fine-tune and develop projects to address this issue at a localised level.”

“For instance, in places such as Pitas and Pulau Banggi where rainfall is less, we can encourage rural participation in rubber-planting, whereas places such as Keningau will drive the handicraft industry, due to strong arts and handicrafts tradition there,” he said.

With these efforts in place, hardcore poverty will be eradicated by 2010 while overall poverty will be halved, in line with the objectives outlined in the Ninth Malaysia Plan (9MP).

In the longer term, Sabah is targeting to bring its overall poverty rate to below 9% by 2015 and below 5% by 2020.

Reducing income disparity
In order to ensure sustainable improvement in the livelihood of the people of Sabah, the SDC blueprint will continue to strengthen efforts in reducing income disparity between rural areas and the city.

Initiatives to be implemented under the master plan to address income distribution via employment restructuring will include the setting up of Human Capital Planning Council to promote dialogue on manpower requirements.

Apart from that, the SDC blueprint is also seeking initiatives to promote income generation via wealth and asset ownership. Such initiatives include the expansion of access to Amanah Saham Bumiputera and establishment of the Housing Development Fund to promote home ownership.

The fund, which will operate in a similar way to the Housing Development Board scheme in Singapore, will be procured through a regular grant from the federal or state government, or through private-sector-supported means.

These funds will then be used to develop affordable public housing, which will be sold to eligible households under a lease arrangement that is converted into full home ownership at the end of the lease period.

To promote participation in commerce and industry, initiatives such as expanding entrepreneurship loans and training schemes and providing strategic retail locations for Bumiputera entrepreneurs will be also considered.

One of the forefront initiatives is the Bumiputera Commercial and Industrial Community (BCIC), which has been part of the government’s key efforts to promote inter-ethnic income parity in Malaysia. Other initiatives include the franchise development that has also been identified as one of the key initiatives for developing Bumiputera entrepreneurs.

As such, a body known as Perbadanan Usahawan Sabah Bhd could be set up to take the lead in franchise development, which will enlist suitable bumiputera entrepreneurs to become franchisees.

Increasing access to education
Poverty in Sabah is also aggravated by the lack of education among young people in the state. Dropout rates in Sabah schools are still a cause for concern, with the proportion of youths not attending school twice as high as the national average.

This issue may be triggered by lack of infrastructure and facilities in Sabah schools, 72% of which are located in rural areas.

Most of these schools lack 24-hour electricity supply, clean water supply, access to computers and qualified teachers. The SDC blueprint will address this problem in close collaboration with the Ministry of Education (MoE). Under the Education Development Master Plan announced by the MoE last year, new incentives and facilities will be provided for teachers serving in rural schools.

Other efforts include providing motivational and counselling resources to encourage students to stay in schools and extending vocational training to younger age groups.

Simultaneously, the SDC master plan will also promote the “Adopt-a-School” programme among private sector companies, while harnessing non-governmental participation in this initiative.

To kick-start the efforts, a central clearing house could be established to match interested companies with schools in need of support, whereby state government-linked companies and indigenous Sabah private companies will be encouraged to participate.

For the less academically inclined, a demand-driven programme will be set up whereby companies will identify potential employees, who will then be provided relevant training.

Another programme in the pipeline is a new vocational curriculum, whereby the MoE can collaborate with state-level agencies to identify vocation-driven syllabuses to be offered to students in selected schools across Sabah.