Terengganu will go bankrupt if it keeps relying on oil royalties, warns Pakatan

Diyana Ibrahim Diyana Ibrahim Updated 4 years ago · Published on 3 Jun 2019 11:00AM · 5 Comments

Terengganu has benefited from the oil royalty to the tune of nearly RM1.8 billion since a change in the federal government last May. – The Malaysian Insight pic by Nazir Sufari, June 3, 2019.

TERENGGANU will go bankrupt if it keeps up its 90% reliance on oil and gas royalties to fill its coffers, said state Pakatan Harapan deputy chief Azan Ismail.

The PAS-controlled state has failed to diversify its economy, resulting in its over-reliance on one source of income, he said.

“Terengganu relies too much on the royalties from the federal government,” he told The Malaysian Insight.

“The state doesn’t look for other sources of funds to boost its finances, like other states.”

Azan, who is also state PKR chief, said Terengganu’s approach to its finances is “very risky” given the volatility of global oil prices.

Last year’s state budget recorded an oil revenue of RM1.7 billion, while income from the assessment tax, and mining and forestry activities stood at between RM300 million and RM400 million.

“It paints a scary picture. Without oil and gas royalties, Terengganu would become the first state to go bankrupt. It wouldn’t be able to cover its annual expenditure.”

PAS wrested Terengganu in last year’s general election, as well as retained its stronghold, Kelantan.

The Islamist party won 22 of Terengganu’s 32 state seats. The rest are held by Barisan Nasional, which previously controlled the state, and now a PAS ally.

PH won no seats in Terengganu.

Azan said despite receiving royalties for the past 20 years, the state and its people’s economic status has remained largely the same.

Terengganu Pakatan Harapan deputy chief Azan Ismail says despite receiving royalties for the past 20 years, the state and its people’s economic status remains largely the same. – The Malaysian Insight file pic, June 3, 2019.

“We are still the third-poorest state. Growth has continued to flatline. We see growth only in population and the number of houses.”

The state government should view oil and gas royalties as just a bonus and use them to boost Terengganu’s economy and eradicate poverty, he said.

“Imagine if Terengganu had revenue like the other states. Add the royalties to the revenue, and Terengganu’s financial position would be strong.

“The state would then be able to manage its development, education and healthcare, and improve infrastructure at a faster rate.”

Terengganu, led by Menteri Besar Ahmad Samsuri Mokhtar, received between RM1.5 billion and RM1.6 billion in oil and gas royalties for 2018 and this year.

Three tranches of RM450 million have been paid. The next payment is expected in September.

The payments are in line with PH’s 14th general election manifesto. Previously, BN did not pay the state oil and gas royalties, instead giving “wang ihsan” (compassionate funds).

Last month, Samsuri told The Malaysian Insight that the money will be used to pay state civil servants’ salaries and fund development projects started by the previous administration.

However, Azan said the money should not be used to pay wages, as doing so would go against the state government’s accountability principle.

It would be irresponsible for the state to make such a “risky move”, he said.

“It is shocking that the menteri besar wants to use the money to pay state civil servants. The royalties should go towards development projects that benefit the people.” – June 3, 2019.

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Comments

  • Terengganu has great potential for eco tourism and has nice beautiful sandy beaches. Pay more attention to develop all the tourist spots, have more 4-5 star hotel resorts, clean up the beaches, educate your people in English so they can be employed in the tourism businesses and hotels, start entreneurship programmes. Make Terengganu like Bali or Lombok and you dont need to depend on oil royalties. MB must have foresight.

    Posted 4 years ago by Elyse Gim · Reply

  • We should respect what the people of Terengganu want. They deserve the Government they voted for.

    Posted 4 years ago by Yoon Kok · Reply

  • Lebai with limited brain capacity can never think of any way to improve the state economy other than relying on the curse of black gold. They are just like their lazy and stupid camel herder idols.

    Posted 4 years ago by Chee yee ng · Reply

  • From the MB to the pas/dumshit/umno they are the most Lazy n most Stupid Corrupt Scumbags People n that is the Truth.

    Posted 4 years ago by Danial Abdullah · Reply

  • Living on free money...they don't care if they are labelled lazy.

    Posted 4 years ago by Lipdah Lia · Reply