Collaborative efforts across various sectors are needed to realise Labuan’s full potential.
Securities Commission Malaysia Chairman Dato’ Seri Dr. Awang Adek Hussin today called for action urging key stakeholders to delve into solutions to strengthen Labuan’s position as a global financial centre.
Making the call at the Labuan Rejuvenation High Level Roundtable, Awang Adek stressed upon the need for improved accessibility which can bring about substantial socio-economic benefits, including lower costs for basic goods and services, improved job opportunities and increased tourism potential.
He said, over the years, Labuan has faced its fair share of challenges, particularly with basic infrastructure, such as recurring water supply disruptions due to ageing infrastructure and poor maintenance, and an unreliable electricity grid. Addressing these issues is paramount.
“To tackle water supply challenges, the MADANI government has allocated RM300 million for pipe replacement works. This investment is aimed at enhancing the reliability and quality of water services. Additionally, a collaborative effort with Petronas, the Sabah Energy Commission, and Sabah Electricity is underway to establish a new power plant. This initiative is aimed at ensuring a stable power supply to meet both Labuan’s demands while potentially benefiting Sabah as well.
Furthermore, the pressing need for improved internet connectivity cannot be overstated as it has negatively impacted Labuan’s productivity. This issue needs to be addressed urgently as it affects both the supply-side and demand-side of the economy.
“Resolving these basic infrastructure issues will help Labuan attract new businesses, potentially, through innovative strategies such as a tailored digital nomad strategy which could be highly beneficial.”
He added Labuan’s real economy also heavily relies on servicing the oil and gas industry and its port facilities. Fostering greater collaboration between Labuan, Sabah and Sarawak in the oil and gas sector and port activities is key to unlocking more economic potential. The Asian Supply Base (ASB) is a crucial pillar to the O&G sector.
“I understand ASB has allocated RM25 million to construct a three-storey crew change terminal, which is scheduled for completion in October 2024. The return of crew change activities to Labuan would significantly benefit the island’s economy.
“In parallel, fostering greater collaboration between Labuan, Sabah and Sarawak in the oil and gas sector and port activities is key to unlocking more economic potential.
Reinstating Labuan’s tax-free status is needed to help Labuan’s tourism sector thrive, creating opportunities for local businesses and the people, he added.
The captive insurance business, the largest and most robust sector in Labuan, remains significant. 2023, there were 69 registered captives, with gross premiums growing 9.4% year-on-year, to US$624.6 million.
In 2023, Labuan contributed RM1.2 billion to the Federal government, which is six times the RM189 million allocated for Labuan in the 12th Malaysia Plan mid-term review.
The SC Chairman advised that Labuan should at least retain half of its income (RM600 million) to be re-invested into its infrastructure.
