00:00Analysts say the decision to raise allocations for Sabah and Sarawak
00:05proves that the federal government is committed to fulfill its obligations
00:09under the Malaysia Agreement 1963.
00:12Academy of Sciences Malaysia fellow, Madeline Burma,
00:15said the doubling of special grants to RM600 million in 2025
00:19reflects an improvement in the federal-state funds transfer system.
00:23As both states are lagging behind peninsular Malaysia economically,
00:27Madeline said they need assistance under a system of fiscal equalization for a certain period.
00:34She said there was not only a need for increased budget allocations,
00:37but also for the states to be granted greater fiscal autonomy in terms of revenue generation
00:42and determining expenditure priorities.
00:45Meanwhile, University of Tasmania Professor of Asian Studies James Chin
00:49noted that the special grant is a temporary allocation
00:52until Sabah, Sarawak and the federal government agree on a permanent formula.
00:57Chin noted that funds needed to bridge the development gap
01:00between the two states and peninsular Malaysia
01:02would have to come primarily from the federal government.
01:05The alternative to this, he said,
01:07is to return more of the PETRONAS oil and gas money back to Sabah and Sarawak.
01:12Chin was referring to ongoing negotiations for Sarawak-owned petroleum Sarawak Berhad
01:17to become the state's sole gas aggregator,
01:19which could lead to significant economic benefits for the states.
01:22Natasha Biest, FMT News.
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