All’s Fair, in Love and War

On Monday, 29 October 2001, Malaysian Prime Minister Dr Mahathir Mohamad went before a press conference and grumbled about certain states under opposition control that indiscriminately cut its timber. No prize for the right guess but guess which states our most esteemed and illustrious Prime Minister was referring to? Why, Kelantan and Terengganu of course!

It’s fine for the Prime Minister to grumble. When the Western environmentalists complained about the same thing Malaysia was doing to the Sarawak forest, Mahathir told them to mind their own business. “Who are they to complain when they have cut down all their trees? Now that they have no more trees, they complain when we cut down ours.”

“Are they going to give us money to develop our country?” asked Mahathir. “We need to cut down our trees to develop our country. If they don’t want us to cut down our trees then give us the money to develop Malaysia. Why should we preserve our forests just for the sake of the Western countries?”

I suppose we can say the same thing to Mahathir. If he does not want Kelantan and Terengganu to cut down its trees, then give them the money to develop their states.

Kelantan has been surviving on timber revenue since way back. It was surviving on its timber revenue back in the days when the state was under UMNO control, and it is still surviving on timber now. Nothing has changed. It’s not like during the days of the UMNO administration it earned its revenue in other ways, and only now that it is under PAS control it is cutting down its trees.

In fact, during the UMNO days it was worse. Then, the timber revenue was going into the pockets of individuals in power and those close to those in power. At least, now, the money is going to the state to pay for its development and running cost.

When Kelantan fell to PAS in 1990, the state revamped its timber concession policy. Instead of parceling out timber concessions to friends, relatives and cronies of those in power, it tendered out the lots to the highest bidder on an open tender basis. Further to that, only those legitimate loggers who owned sawmills in the state of Kelantan were considered, so the middlemen and political brokers were cut out from the equation. This ensured that only those deserving and who paid top dollar were given timber concessions. Your relationship with the chief minister was no longer the basis for consideration.

Parti Semangat 46, the coalition partner in the Kelantan state government, was very unhappy with this new arrangement. They had hoped the minute they got into power they could take the timber for themselves. Many people close to Tengku Razaleigh Hamzah, Semangat 46’s President, went round making deals and collected “under-the-table” money while promising timber concessions in return. But the concessions never materialised and many an unhappy logger who had paid for the concessions raised hell when they realised they had been had.

The loggers went to see Nik Aziz, Kelantan State’s Chief Minister, to complain. Nik Aziz’s reply was simple, “If you are eligible, you will get the concession. If you are not, you will not get it. It’s no point coming to see me because I cannot help you if you are not eligible. In fact, if you are eligible, you will automatically get the concession without even having to see me.”

The loggers soon realised that Kelantan had changed. No longer could they make under-the-table deals and bribe government officials to get a timber concession. Word quickly spread to neighbouring Terengganu State that Kelantan plays fair. Before long, half the sawmills in Terengganu closed down and relocated to Kelantan. Terengganu, which was still under UMNO then, was still playing by the old rules – money under the table – and the loggers were getting quite fed up with the high level of corruption in the timber industry.

In the timber industry, everyone needs to be paid off – the Chief Minister, the Executive Committee members, the Forest Department officials, the forest rangers, the timber graders, even the police that inspect the lorries carrying the logs out of the forest. It was money, money, and more money, all along the way. Everyone involved in the timber industry, even how remotely it may be, had their palms spread wide open.

The PAS government in Kelantan changed all that and the loggers were pleased. The exodus of Terengganu loggers into Kelantan was testimony to the confidence the industry had in the new government and its policies. And the Terengganu timber industry soon collapsed as the loggers made their way to Kelantan.

Since independence, Terengganu too had depended on timber as it main source of revenue. Right up to the mid-1970s, timber revenue paid for practically 90% of the State’s RM300 million a year operating cost. But that’s all it could afford to pay, the operating cost, which was basically salaries. 100% of the state’s development expenditure came from the Federal Government by way of grants and loans.

Then, in 1974, Terengganu found oil and, from 1975 onwards, the 5% oil royalty it earned replaced timber as its main source of income. Soon Terengganu could afford to reduce its timber quota, as it no longer needed the money from timber. If Terengganu had not discovered oil it too would have had to continue depending on its timber revenue and it would have had to increase rather that reduce its timber quota.

But, in 2000, soon after the state fell to the opposition, the Federal Government totally cut off Terengganu’s oil revenue, so Terengganu had no choice but to revert to timber as its main source of income.

Now Dr Mahathir is grumbling that Terengganu is cutting down all its trees. What does Mahathir expect? The previous UMNO government left the state with a mountain of debts. Even with all that oil royalty it was earning, it still did not have any cash surplus. It makes one wonder what happened to the RM10 billion to RM15 billion oil royalty the state had earned those 25 years since 1975 while it was under the UMNO administration. If you just look around Terengganu you cannot see much development. No doubt Terengganu has improved slightly since, but when you assess the rate of development, it comes nowhere close to the RM10 billion or RM15 billion. And why all those unpaid debts?

The previous UMNO government left the present government a colossal amount of debts when it got kicked out and the present government now has to service this debt. On top of that, Terengganu has a RM600 million a year operating cost to cover, double what it was when oil was first discovered in 1975. And it has no income whatsoever since Mahathir cut off its oil money.

So, what does the state do? It cuts down its trees and converts it to cash. What other alternative is there? Maybe this is going to cause an ecological problem, but Mahathir should have thought of this before he cut off the state’s oil money.

Once the trees disappear, the rainfall is going to be affected. Malaysia is already facing a serious water shortage problem, and it is expected that, within ten years time, the country is going to face a water crisis. States such as Melaka and Selangor are already moving towards a water crisis. And it’s going to get worse as we go along.

But this is not Terengganu’s problem. Melaka and Selangor too had a lot of timber once. In fact, the whole country used to be one big jungle. But the West Coast states cut down all its trees and now they expect the East Coast states such as Terengganu to conserve its timber so that states that no longer have any timber do not face a water shortage problem.

Why should Terengganu worry about this? It has enough water for its own use. The Kenyir Lake is twice the size of Singapore, so Terengganu will never run short of water. In fact, Terengganu’s problem is it has too much water that it floods. If Mahathir is worried about the ecological problem and the impending water crisis, and if he wants states like Terengganu to stop felling it timber, then give Terengganu back its oil money.

At this stage, Terengganu should take care of itself. The other states can go to hell for all I care. And with no more water in future, that might just be where they will go.

When it comes to the crunch, one thing is for sure. Water is more valuable than oil. While the Federal government robs Terengganu of its oil, the other states are going to soon know what it feels like to be robbed of its water.

As they say, all’s fair in love and war – and this is war. While Mahathir tries to bankrupt Terengganu State by cutting off its oil money, the state in turn just cuts down all its trees and cuts the rest of the country off from its source of water. Poetic justice indeed. Maybe Mahathir can teach the people from the other states how to drink oil once they run short of water.