KUCHING – The Development Bank of Sarawak (DBOS) will have a paid-up capital of RM500 million when it starts operation come January 2018, said Sarawak Chief Minister Datuk Patinggi Dr Abang Johari Tun Openg.
He said there were a number of strategic projects that Sarawak wants to venture into to expedite development in the state that would be financed with its own resources through DBOS, as it is a known fact that some developed countries owe much of their success to their ability to use homegrown resources.
“This is exactly what we want to do with the setting up of DBOS. We want to invest in some specific areas to harness the vast potentials of our resources, increase consumption to further boost our domestic economy in the long term,” he said at the launching of the DBOS logo at a leading hotel here today.
“Our focus will be on infrastructure development, development in the oil and gas industry, renewable energy, urban transport, telecommunications, digital economy, healthcare and integrated agriculture,” he added.
Abang Johari said Sarawak’s quest in pursuit of a digital economy would need a lot of financial resources, therefore DBOS was the way forward through the provision of facilities like term loan, bridging loan, revolving credit facility for working capital financing, loan syndication and bank guarantee.
He said that after being appointed as Chief Minister, among the first few things he did was to explore innovative financial models in other countries that the state could adopt, to finance projects which are strategic to Sarawak’s development and become an interface with the public and private sector.
“I believe that Sarawak needs to come up with a new model that will help to raise funds to finance strategic development projects. The state needs to speed up its development and we cannot wait for our budget allocations, state or federal, to be sufficient because it will never be sufficient,” he explained.
Abang Johari said that due to the financial prudence of his predecessors, Tun Abdul Taib Mahmud and also the late Tan Sri Adenan Satem, Sarawak had a substantial amount of reserves, “although while having a big reserve is good, too big a reserve is also not so good because the money is not used to invest and boost domestic consumption.”
He said economists knew that if the reserves were not used to invest, it is also a cost, namely an opportunity cost, which refers to the cost of lost opportunities because nothing was being done with the money.
“Opportunity costs do not appear on the account books but it is important in the process of decision making … there is a need to ensure a balance between our reserves and our investment without depleting our reserves, and this is the primary role of DBOS,” he added.