Malaysia’s dependence on the annual dividends of national oil and gas company PETRONAS as a source of revenue for government coffers has been on the decline over the years, says Finance Minister II Datuk Seri Amir Hamzah Azizan.
Speaking to The Star in an exclusive interview, he said this comes with the progress achieved by the country and the diversification of revenue streams.
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Speaking to The Star in an exclusive interview, he said this comes with the progress achieved by the country and the diversification of revenue streams.
WATCH MORE: https://thestartv.com/c/news
SUBSCRIBE: https://cutt.ly/TheStar
LIKE: https://fb.com/TheStarOnline
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NewsTranscript
00:00Petronas is a very important source of revenue for the government. So, with the development
00:14with Petronas and Petros, are you expecting lower dividends going forward?
00:22I think, first and foremost, the discussion with Petronas and Petros is still ongoing.
00:29The high-level principle that leads to a win-win solution for both has already been agreed.
00:35But, at the end of the day, you still have to translate it to their nitty-gritty, right?
00:39So, let them sort out their nitty-gritty.
00:42So, if there is some sharing of revenue that actually happens along the way, does the country lose?
00:50The answer is no, because if Petronas were to gain some money, they would still spend it
00:56to grow the oil and gas industry, but in the state of Sarawak.
01:00So, from a GDP point of view, the country still gets the money, it's just allocated from a different vehicle.
01:06The second thing is, we also have to recognise Petronas has done well over all the years.
01:10They've built a Fortune 500 company, they've been growing well overseas,
01:15and in that sense, they have resilience in their system.
01:19They may have to do some optimisation to sustain, and I'm sure Tegut Taufik and the leadership team there
01:26will be looking at how to sustain better going forward.
01:30But the country has also progressed compared to the early days.
01:34Actually, our dependency on Petronas has declined over the years.
01:38So, the revenue that we earn from Petronas, at one point, at the worst period,
01:43I think it had hit more than 40% of the total hasil that was coming in from that side.
01:48In 2023, I think it has now declined to about 19-20%.
01:54In the current projection forward, we are going to try to take it down further to 15-16%,
02:02but based on growing other hasils elsewhere.
02:06So then, again, same concept, diversification.
02:10You should never be overly dependent on one, but you break it off.
02:14We can't knock the growth of approved investments, right?
02:19$346.5 billion or something last year was brought in,
02:26and we're really seeing the value of the investments brought in translating into reality.
02:32You don't have to go far, just take the GDP numbers,
02:35and when you take the GDP numbers, you look by segment.
02:39If you look at the segment, the construction sector is up on the fourth quarter 20%.
02:44That's because they've taken the FDI.
02:46The FDI now is translating to construction, because they need to build the data centres,
02:50they need to build the new factories, and so on.
02:52It's happening along the way.
02:54I saw some numbers not too long ago from MITI and Bank Negara,
02:59which actually said that in the past, our conversion rate was about 70%
03:04of all approved investments were converted to reality.
03:07Of late, the number has now increased to 77.7% or something like that.
03:11So that's good.
03:12It's really making sure that what people promise, they translate on the ground,
03:17and when they translate on the ground, activity in the GDP has gone up,
03:21activity to the construction sector has gone up, jobs are created.
03:24This February, we pushed up minimum wage to 1,007.
03:28So that also helps us, because what it does is it creates also a private spending economy.
03:35So the leg of the economy now will have FDI, DDI, and private consumption.
03:41We just need to focus on how do we continue to feed these engines,
03:44so the whole economy will continue to churn well.
03:48Is it going to be perfectly smooth?
03:51Nothing in the world is perfectly smooth.
03:54But if we focus well, we can get more and more done,
03:57we will have the resiliency we need, and if our plans are clear,
04:02and we execute against the plan, we have the ability to re-transform the economy.
04:07I think that's what we're trying to do as a government.