A DIAMOND IN THE ROUGH

Malaysia 2016 | SABAH | INTERVIEW

TBY talks to Y.B. Datuk Seri Panglima Masidi Manjun, Minister of Tourism, Culture and Environment, Sabah, on developing tourism in the face of environmental concerns, tax restrictions, and challenging macroeconomic trends.

Y.B. Datuk Seri Panglima Masidi Manjun
BIOGRAPHY
Y.B. Datuk Seri Panglima Masidi Manjun has held a number of prestigious positions in both political service as well as the private sector. He received the appointment to the position of Minister of Youth and Sports in 2004. He served as the Chairman of Sabah’s Institute for Development Studies from 1994-2004 and sat on the board for Sabah Development Bank as well as several others. He holds’s a Bachelor of Law with Honors from London University and was registered as a Barrister-at-Law with Honors at Lincoln's Inn in London.

How is the Ministry encouraging sustainable tourism, in line with its goal of making Sabah the premier eco-tourism destination in Malaysia?

Sabah is truly blessed with an abundance of incredible natural beauty and resources—our greatest asset. The challenge is how to conserve them, so our holistic approach, therefore, better enables us to control and organize all actions, events, and policies concerning eco-tourism and nature conservation. The greatest challenge to contend with is greed, as so many seek to make extract profits now without considering the preservation of the commons for the future. Up to 55% of Sabah will always be comprised of protected forests. Up to 21% is comprised of Totally Protected Areas and this will increase to 30% by 2025. By next year, we will have two million hectares of marine park. Timber was long Sabah's main revenue generator. Our revenue from timber was reduced from $1 billion per year to just $120-140 million last year in response to government cutbacks in issuing licenses. Meanwhile, tourism revenues rose to $6.3 billion last year—what we lost in timber we gained in tourism. Naturally, people and companies that made their living in the timber industry are hugely disappointed. Our rainforest is the oldest in the world, over 120 million years old, and therefore the responsibility to preserve it lies with us.

How will the Goods and Services Tax (GST) affect the tourism industry in Sabah?

We recently presented a strong argument as to why domestic travel in Malaysia should not be subject to GST, especially Sabah, Sarawak, and Kuala Lumpur. In peninsular Malaysia, the trains, buses, and even commuters are GST exempt because these are “essential services." However, in Sabah and Sarawak, vis-à-vis Kuala Lumpur, we have no choice but to fly for all essential services and this will be subject to the GST. Domestic travel will cost more, which will discourage many Malaysians from traveling within their own country. Over 90% of our visitors to Sabah arrive by air, so a 6% GST will negatively impact tourism and visits. It's still too early to see what the impact will be, but this seems the likely scenario.

What is your outlook for the tourism industry for the year ahead?

I hope for a better performance, but expect a challenging environment. Europe still faces severe economic challenges, so we do not expect much of a rise in European arrivals. Chinese economic growth also dropped to 7% last year, which may mean less Chinese traveling overseas. Sabah has long been a natural destination, being a mere five hour journey from China, and less than three hours from Hong Kong. There are now more billionaires and multimillionaires in China, and they all tend to head for London, Paris, Latin America, and even Africa. As they travel further away, places like Sabah will see less of them and will have to compete more for Chinese tourists. Tourism Malaysia is targeting 29.4 million tourists this year (an increase of 7.2%). By 2020 the tourism is expected to generate RM168 billion in receipts with 36 million tourist arrivals as outlined in Malaysia Tourism Transformation Plan (MTTP) 2020. The Economic Impact Report by the World Travel and Tourism Council (WTTC) reported that the total contribution of Travel & Tourism to GDP was MYR158.2bn (16.1% of GDP) in 2013, and is forecast to rise by 6.8% in 2014 continue 4.5% per annum to MYR262.5bn (17.3% of GDP) by 2024. In 2013, the total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, was 14.1% of total employment. This is expected to rise by 4.8% in 2014 and rise by 3.1% annually to 2,648,000 jobs in 2024. The World Tourism Organization (WTO) estimates 4.5% growth this year, and hopefully we will se some of that growth. Nonetheless, we prefer to temper our optimism with realistic expectations.