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The Star

Publication Date : 08-03-2013

When the dust settles, many will be countina the costs the armed conflict has brought to Sabah's east coast, an area known for eco-tourism, large oil palm plantations and in recent years, a destination for those who enjoy seafood.

Eastern Sabah has many eco-tourism destinations, among them the Danum Valley Conservation Area, Tabin Wildlife Reserve and world renown dive sites in the waters surrounding Sipadan, Mabul and Kapalai islands.

Large plantation owners in the area include Felda Global Ventures Holdings Bhd with 100,000ha of land.

Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias said the tourism and retail industries would feel the initial impact but a deeper impact would depend on whether the conflict prolongs and whether it spreads.

“My feeling is that the current incidents will not have a significant impact on the state's economy as it is a localised problem. As long as it doesn't lead to a contagion effect, it will not have an adverse effect on the state's economy,” he said.

Meanwhile, CIMB Investment Bank Bhd economic research head Lee Heng Guie said it was too early to draw any conclusion on the impact of the conflict.

“There will likely be some impact on the sectors that Sabah has been leveraging on but it's hard to quantify at this point,” he said, adding that investments into the state had been quite steady, drawing 5 billion ringgit (US$1.6 billion) in investments according to recent data.

Besides the economic costs, there would be a reckoning for the expenditure incurred for the deployment of thousands of military and police personnel together with aircraft, capital ships, patrol boats, field artillery pieces and vehicles.

Freelance defence journalist and analyst Dzirhan Mahadzir said cost estimations on the deployment would be done only after the operations.

“The sum may come to quite a bit when a typical Malaysian infantry battalion comprises around 700 men and seven were deployed to Sabah's east coast, several of them from the peninsula,” he said.