Clarence Bongkos Malakun, Chairman, Institute for Development Studies Sabah: Interview

Interview: Clarence Bongkos Malakun

How do you see Sabah’s ICT sector developing?

CLARENCE BONGKOS MALAKUN: Without Multimedia Super Corridor (MSC) status the climate would have been very unfavourable for tech entrepreneurs in Sabah and East Malaysia. Companies desiring MSC status had to relocate to Peninsular Malaysia to be situated within the MSC itself or in one of its designated zones, which was a costly process. Now that this requirement has been eliminated, it will be far easier for Sabahan companies to acquire MSC status and benefit from the tax breaks, shorter waiting times for hiring foreign expertise, and of course the numerous incentives, such as start-up capital, that are on offer. This should help entice larger ICT companies to set up operations in Sabah, while also making it far easier for smaller home-grown companies to get a head start and grow.

In terms of human capital, Sabah’s universities have many ICT graduates. Unfortunately, they do not have anywhere to develop their skills as the jobs are not yet available. What we lack is a research centre run by a bigger company like Dell or Huawei. As a state we need to place more emphasis on research and development and develop our capacity here. There is also a gap for the services that tech entrepreneurs, start-ups and small and medium-sized enterprises can provide here in Sabah, but for this reason it is also an enticing place to test the waters. There are a lot of opportunities here, the spending power is here, and for young start-ups it is a good place to experiment.

What appeal do Kota Kinabalu’s suburbs hold for infrastructure developers?

MALAKUN: The city is growing along with the income of its population. Many people who traditionally stayed nearer to the city are now moving into the suburbs, fuelled by a desire for bigger houses, with more land and parking spaces. In the past few years we have seen this trend reflected in the projects of bigger developers. Nearby to Penampang, in Tanjung Aru, SP Setia is building Aeropod, a transit-oriented development, and north-east of the city is Pacificity in Likas. This is natural growth for the city and demonstrates how much Kota Kinabalu is booming. Of course there is also the International Technology and Commercial Centre (ITCC) development located in Penampang, 15 minutes from the city centre, 10 minutes from the airport and strategically placed along the Pan-Borneo Highway. There is a population of 1.1m within a 20 km radius, and it is this growing demand that developers are looking to take advantage of.

With the number of malls in Kota Kinabalu on the rise, what retail trends have you observed?

MALAKUN: Until recently, bigger retailers had held off on entering the Sabah market. However, in the past few years this has changed dramatically and we have seen international chains such as H&M and Uniqlo enter the state. They have done their research and are confident in the market, and we expect to see more of the bigger chains following suit. At the moment, the greatest retail potential remains within the middle-market segment.

What is being done to maximise Kota Kinabalu’s potential as a regional hub for meetings, incentives, conferences and events (MICE)?

MALAKUN: Kota Kinabalu is a natural destination for MICE tourism, being just a three-hour flight from many Asian cities such as Seoul, Tokyo and Hong Kong, and located in the centre of the East ASEAN Growth Area, home to 57.5m people. However, while the state receives many enquiries, it simply lacks the capacity for large-scale events. The government-led initiative for the development of the Sabah International Convention Centre (SICC) is a great step and will establish our capacity to hold first-class international events. So the SICC, with the ITCC in Penampang, will go a long way in providing the capacity the state needs.