IT WOULD be challenging for Perikatan Nasional (PN) to sustain its newly formed State Government 4 (SG4) in the long term, as the opposition-controlled states will need federal government support to keep things running smoothly, analysts have said.

Speaking to The Vibes, analysts said that PN-led states in Kedah, Kelantan, Terengganu, and Perlis may struggle to garner support from Putrajaya, adding that PN cannot afford to create another rift with the Madani administration.

Last month, SG4 leaders announced the formation of SG4 Group Sdn Bhd, a company designed to share and distribute wealth equally among the states. The announcement was made at a major meeting attended by the company’s adviser, former Prime Minister Tun Dr Mahathir Mohamad.

The company is focused on attracting investment to these states and capitalising on their vast deposits of rare earth elements (REE), agricultural land for food production, and potential for developing the green energy industry.

SG4 Sdn Bhd will concentrate on five key areas: infrastructure and logistics; trade, investment and industry; agriculture and food security; education and human capital development; and new sources of income.

Executive Director of Ilham Centre, Hisomuddin Bakar, pointed out that the opposition states still lack sufficient funding and remain heavily reliant on Putrajaya for capital injections.

He stated that PN leaders must be pragmatic, acknowledging the necessity of maintaining a close and positive relationship with the federal government.

“It would be tough to implement. They still need backing from Putrajaya in the context of federalism. They need funds from Putrajaya to get things running. At the moment, the funds are not yet forthcoming,” Hisomuddin said.

“As opposition states, they rely on the government for funding. They need to avoid creating another rift with the Madani administration. The idea may be good, but I don’t see how they can proceed without strong support from Putrajaya.”

Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi has stated that the four PN-governed states must ensure that their REE mining activities align with national regulations and ecosystems.

“I believe the SG4 has good intentions in forming a company to oversee REE mining,” Zahid remarked. “The four states may have their own strategies, but they are still subject to the taxation and ecosystem set by the federal government.”

University of Malaya’s Prof Dr Awang Azman Awang Pawi highlighted that the longevity and sustainability of SG4 depend on several factors, including political and social stability.

He noted that although PAS governs all four states, Bersatu’s presence creates internal friction that could significantly disrupt the project.

“The support of voters is also a determining factor. Any change in sentiment, such as dissatisfaction with how the states are governed, could lead to a loss of control,” he said.

Awang Azman added that the relationship between the states and the federal government is crucial. Pakatan Harapan-Barisan Nasional (PH-BN) could exert political and economic pressure on SG4, destabilising the initiative.

“The government could always choose to prioritise development projects in other states,” he said.

When asked what might happen if SG4 loses control of one of the four states, Awang Azman explained that it could trigger a domino effect, damaging PN’s reputation.

However, he also suggested that if SG4 successfully develops the economy and creates more jobs, it could strengthen the opposition coalition’s grip on power.

“If they fail to deliver benefits to their voters, they risk losing even more in the future. Currently, the economy and leadership in these states remain weak.”

Umno Supreme Council member Puad Zarkashi has questioned the formation of SG4, suggesting that issues related to manpower, assets, and shares could arise if power changes hands in opposition-controlled states.

“It’s not impossible for BN to reclaim Terengganu, Kedah, and Perlis,” said Puad. He also criticised Kedah Menteri Besar Muhammad Sanusi Md Nor, describing him as someone reluctant to share, mocking the SG4’s revenue-sharing goal.

“The formation of SG4 is politically motivated, not business-oriented, especially with Tun Mahathir as its adviser,” Puad added.

Potential for success

Meanwhile, Dr Ahmad Fauzi Abdul Hamid of Universiti Sains Malaysia believes SG4 could succeed if the opposition coalition remains resilient and serious about its goals.

He argued that it is not impossible for SG4 to attract foreign investment, given the strengths of the four states.

“Agricultural products are strong in these states, and their proximity to Thailand offers potential for international trade if managed well.”

“They have the resources to become a powerhouse. If they can create jobs and grow the economy, they could succeed. All they need is expert guidance from various fields.”

Fauzi noted that the SG4 concept is fundamentally sound and could work, even without federal funding, if handled properly.

“They could later claim that they succeeded independently, without help from Putrajaya. This is not impossible, as many states in Malaysia rely on agricultural products from Kedah, Kelantan, Terengganu, and Perlis,” Fauzi said. – September 10, 2024.