By BORNEOTODAY REPORTERS
KOTA KINABALU: A free trade zone could be developed at the Sabah-Indonesia border that could only bring immense opportunities to both states, the head of the North Kalimantan business chambers said.
In fact, the Indonesians have already pledged 1,000 acres of land at Simanggaris, the border town that is minutes away from Serudong on the Malaysian side, and they hope that the Sabah authorities would do the same.
Kilit Laing, chairman of North Kalimantan Chamber of Commerce and Industry (KADIN) said his side has what Sabah needs and people living in Indonesia’s 34th province require what Sabah can provide.
“A free trade zone at the two border towns will bring tremendous benefits to both our states and will open up the area even further,” he said in an interview, adding Kalimantan Utara (Kaltara) had a more than 20 million population.
“It is easier for us to trade with Sabah, and even Sarawak to some extent but many of us prefer Sabah, in particular Tawau. This is because of the (shorter) distance between us then with our nation’s capital.”
Kilit, who is in Sabah at the invitation of Society Empowerment and Economic Development of Sabah (SEEDS) chairman Datuk Badil Zaman Fazul Rahman, said regularised trade could see a reduction in smuggling especially.
He said there was a good, sealed road from Simanggaris to the other towns in Kaltar like the province’s capital Tanjung Selor and Malinau, in the centre, and if Malaysia builds the remaining 28-kilometre stretch from Kalabakan to Serudong, it would be a smooth drive all the way.
According to Kilit, this would open up as much of Kalimantan to Sabah businessmen and investors, saying that Kaltara itself is a goldmine for investments.
He said they had huge areas of land suitable for paddy farming and oil palm plantations, while the other sectors that could be explored are hydro power, timber products and mining, apart from oil and gas.
On his end, Kilit said people in Kaltara want food items like rice, sugar, milk, coffee, cooking oil, and other basic necessities like fuel, cooking gas, as well as construction materials like cement and steel.
Badil, at the same interview said a special economic zone or free trade zone is an idea that needs further study, but existing models that we can build from include the Bukit Kayu Hitam or Pengkalan Kubor in peninsular Malaysia.
“The special economic zone or growth corridor of Simanggaris and Serudong must be able to attract trade if we have enough inducement such as facilities and support services,” he said, agreeing that it could turn out to be a prosperous arrangement.
He said the long term effect will be to attract traffic of goods to Kaltara and beyond, since Simanggaris is connected with the rest of Kalimantan by a network of good roads.
“Serudong and Simaggaris will be the corridor to reach out to the consumer market of Kalimantan which Sabah’s SME (small and medium scale industries) development critically needs to build the economics of scale,” he pointed out.
Badil spoke of the possibility to link the palm oil industries of the inland region to the Lahad Datu POIC, apart from Kalimantan’s other natural resources, such as forest products that should be able to support local SMEs.
“It would be good for the State government to look into this special economic region so that it could be accorded with special incentives and develop common strength between Sabah and Kaltara to compete in the rest of Kalimantan and beyond.
“The proposed special economic zone will be the melting pot,” he added stressing that it could be a private sector initiative but with government backing.
A Memorandum of Understanding between SEEDS and KADIN, is expected to be signed in Tanjung Selor next month, to formally establish a framework of cooperation on trade related programmes.
Recently, SEEDS initiated a round-table discussion on trade opportunities in North Kalimantan with the local chambers of commerce.