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Daily Express
11 hours ago
- Business
- Daily Express
Options on honouring 40pc entitlement
Published on: Sunday, June 22, 2025 Published on: Sun, Jun 22, 2025 By: Datuk Roger Chin Text Size: SABAH's 40% entitlement under the Malaysia Agreement 1963 (MA63) has long been a point of contention, with the Federal Government often citing financial constraints as the reason for not fulfilling this obligation. However, the argument of 'inability to pay' is not an absolute financial limitation but rather a matter of budgetary prioritisation. The Federal Government has consistently funded large-scale infrastructure projects in Peninsular Malaysia—such as public transportation systems, skyscrapers, and highways—while similar investments in Sabah have been minimal. This demonstrates that fulfilling Sabah's 40% entitlement is more about political will and resource allocation than an actual lack of financial capacity. It is essential to emphasise that the 40% entitlement is distinct from the Federal Government's other obligations to Sabah under the Federal Constitution, such as development funds. These are separate commitments, and the entitlement under MA63 should not be mixed with broader Federal allocations. A range of innovative mechanisms can be employed to fulfil this legal obligation while ensuring equitable development across Malaysia. Advertisement 1. Phased Instalment Payments A structured instalment plan would allow the Federal Government to meet its obligation to Sabah while mitigating any immediate financial burden. This approach could mirror how large-scale infrastructure projects in Peninsular Malaysia are prioritised. Key features: Gradual Payment Structure - Payments could be spread over 10 to 20 years, starting with smaller instalments and gradually increasing over time, allowing the Federal Government to manage its fiscal obligations more effectively. Interest on Delays - Should payments be delayed, interest could accrue, ensuring Sabah is not unfairly penalised by any Federal fiscal management issues. 2. Interest-Free Development Loans or Grants In lieu of direct payments, the Federal Government could offer Sabah interest-free loans or grants earmarked for critical development projects, such as infrastructure, healthcare, and education. Considerations: Targeted Development Funding - These funds could be directed towards sectors where Sabah is underdeveloped, providing an immediate boost to the state's growth. Offset Against Entitlement - The value of these loans or grants could be deducted from the total entitlement, allowing for progress towards fulfilling the obligation while directly benefiting Sabah's development. 3. Transfer of Oil and Gas Fields Transferring ownership and control of oil and gas fields within Sabah's territorial waters would provide the state with a direct revenue stream from its natural resources, fostering long-term economic autonomy. Key aspects: Full Ownership - By gaining full control of its oil and gas fields, Sabah could generate significant revenue from resource extraction, with the profits offsetting the Federal Government's 40% obligation. New Resource Exploration - The right to explore and develop new fields could ensure sustainable future revenue for the state, reducing dependence on Federal transfers. 4. Transfer of Federal-Owned Land A feasible option to reduce the Federal Government's financial burden would be the transfer of Federal-owned land in Sabah, particularly those with high economic potential, to the state government. Advantages: Strategic Land Transfers - Economically valuable land could be surrendered to Sabah, enabling the state to generate revenue through development or other uses. Offsetting the Amount Owed - The value of the transferred land would be credited against the 40% entitlement, providing an immediate means of fulfilling part of the obligation without direct cash payments. 5. Revenue-Sharing from Federal Investments Revenue-sharing arrangements for Federal projects in Sabah would ensure that the state benefits from economic activities generated within its borders, particularly in key sectors such as tourism and agriculture. Key considerations: Profit-Sharing Models - Federal enterprises operating in Sabah, such as airports, and tourism developments, could share a portion of their profits with the state. Sector-Specific Revenue - Industries crucial to Sabah's economy could be prioritised for revenue-sharing, ensuring that local resources and projects directly benefit the state. 6. Enhanced Tax Autonomy Granting Sabah greater autonomy in tax collection, particularly in sectors such as tourism and natural resources, would reduce its dependence on Federal transfers and ensure that the state benefits more directly from its own economic activities. Considerations: Exclusive Taxing Authority - Sabah could be given exclusive rights to tax specific industries, ensuring that revenue generated within the state remains in the state. Increased Royalties - The Federal Government could increase Sabah's share of oil and gas royalties from the current 5% to a more equitable level, providing an additional revenue stream. 7. Issuance of Federal Bonds or Sukuk The Federal Government could issue bonds or sukuk (Islamic bonds) specifically designed to fulfil Sabah's entitlement. This would provide immediate funds for development while allowing the Federal Government to spread the repayment over time. Mechanics: Entitlement-Backed Bonds - Bonds linked to Sabah's 40% entitlement would provide upfront financing, allowing for immediate development projects, while the Federal Government repays bondholders over a set period. Sukuk Option - Bonds backed by Federal assets in Sabah could comply with Islamic finance principles, offering an ethical and sustainable method of financing the entitlement. 8. Equity Participation in Government-Linked Companies Sabah could be granted equity stakes in Federal Government-linked companies (GLCs) such as Petronas or Tenaga Nasional Berhad (TNB). These stakes would provide the state with a recurring revenue stream through dividends. Key features: Equity Stakes - Shares in key GLCs would enable Sabah to receive regular dividend payments, which could then be deducted from the overall entitlement. Dividend-Based Fulfilment - Regular dividend payments would serve as an alternative to direct cash transfers, offering a sustainable source of income. 9. Performance-Based Entitlement Adjustments A portion of the entitlement could be linked to Sabah's economic performance, incentivising both the Federal and Sabah state governments to focus on growth-oriented policies. Benefits: Development Incentives - Tying part of the entitlement to key performance indicators, such as GDP growth or infrastructure improvements, would promote long-term development in Sabah. Joint Investment Projects - Federal and State Governments could collaborate on large-scale projects, with profits reinvested into fulfilling Sabah's entitlement. 10. Dedicated Federal Development Funds A one-off, dedicated allocation of Federal development funds to Sabah would provide long-term stability for critical infrastructure projects, separate from the annual budget allocations, and ensure continuity in development initiatives. Key elements: Fully Allocated Funds - Unlike regular budgetary allocations, these development funds would be transferred entirely to Sabah, providing the state with full control over long-term infrastructure projects. Priority Sectors - The funds could be earmarked for essential sectors such as transport, rural electrification, and industrial growth, ensuring that Sabah's development progresses at a comparable rate to Peninsular Malaysia. Concluding Remarks The Federal Government's claim of financial incapacity to meet Sabah's 40% entitlement is more about prioritisation than genuine fiscal limitations. By adopting innovative mechanisms—such as phased instalments, land transfers, or equity stakes—the Government can fulfil its legal obligation while simultaneously supporting Sabah's development. Crucially, these solutions must remain distinct from the Federal Government's other obligations, ensuring that Sabah receives both its rightful entitlement under MA63 and its fair share of Federal development resources. This balanced approach would foster not only fairness for Sabah but also sustainable growth for Malaysia as a whole. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]
Daily Express
15-06-2025
- Business
- Daily Express
Sabah is at turning point in achieving good governance: Investors finally having confidence in Sabah
Published on: Sunday, June 15, 2025 Published on: Sun, Jun 15, 2025 By: Datuk Roger Chin Text Size: Sabah is beginning to show signs of a state turning a corner. Where past governments have often lacked follow-through or institutional clarity, the current Sabah State Government is quietly but steadily laying the foundations of a more self-reliant, results-driven administration. Across sectors — energy, education, investment, and institutional reform — a more confident Sabah is emerging. Advertisement Building Institutional Muscle - Power, Regulation, and Autonomy The establishment of the Energy Commission of Sabah (ECoS) is more than a bureaucratic development — it marks a turning point in how Sabah governs its most strategic resource. With Sabah Energy Corporation (SEC) now actively managing gas distribution, and with Petronas recognising Sabah's growing autonomy over its own energy landscape, the state is strengthening both regulatory and commercial control over its resources. The approval of 1,000 MW in new power generation capacity under ECoS — including 200 MW of solar and 100 MW of battery storage in Lahad Datu — nearly doubles Sabah's current installed capacity of 1,200 MW. This proactive approach to energy security demonstrates administrative focus in preparing for growing industrial and domestic demand. Taking back 50pc equity in the producing Semarang Oil Field under SMJ Energy was once unimaginable. Today, Sabah holds a historic 50pc stake in an operating oil asset, with further back-in rights on other fields — a significant marker of progress in asserting energy sovereignty. This shift aligns with the broader spirit of Malaysia Agreement 1963 (MA63) implementation — returning rights and agency to Sabah without fanfare, but with focus. Institutional Reform That Inspires Investor Confidence Sabah is no longer just talking about attracting investment — it is doing the hard work of institutional preparedness. The creation of the Borneo International Centre for Arbitration and Mediation (BICAM) is a notable move, signalling that Sabah is serious about dispute resolution infrastructure and legal professionalism. These are the quiet building blocks of an investor-friendly ecosystem. The state's ability to secure long-term, high-impact investments — such as E-Steel's manufacturing facility and other FDI-led industrial projects — reflects this shift. These are not fly-by-night deals but strategic entries into Sabah's industrial and logistics backbone, particularly in energy-adjacent and halal sectors. The government's target of developing 400,000 hectares of industrial tree plantations is also notable, laying the groundwork for a sustainable, regulated timber industry that can support long-term economic and ecological objectives. Fiscal Responsibility and Strategic Spending Under current leadership, Sabah has also improved its fiscal standing. State revenue has seen stable growth, with increased allocations to development budgets. A record-setting education fund through Yayasan Sabah signals not just an investment in human capital, but a turnaround in financial governance. Where once Yayasan Sabah was associated with mismanagement, today it is stabilising its accounts and focusing on outcomes: scholarships, rural education access, and TVET capacity. State reserves have grown from RM2.93 billion in 2020 to RM8.6 billion today — a clear indicator of improved financial governance and expanding revenue streams. This reflects not just fiscal prudence, but also stronger performance from some state-linked companies. For instance, Innoprise Corporation declared RM500 million in dividends over the past four years (since 2021), after previously declaring none. This speaks to stronger GLC performance and improved governance. There's also a sharper focus on aligning spending with long-term returns — whether in roads, ports, industrial parks, or digital infrastructure. Lifting the Rural Heartland Beyond Kota Kinabalu, the state has expanded rural electrification, water access, and road upgrades — critical interventions for a state where over 40pc of the population lives outside urban centres. Programmes aimed at uplifting native and rural entrepreneurs — including agro-based industry support and SME grants — reflect a more inclusive vision of economic participation. The government is also gradually tackling longstanding issues in land recognition and native customary rights, though much remains to be done. A Grounded but Forward-Looking Approach There is no claim here of a perfect government. Bureaucratic delays, inequality, and capacity constraints persist. But the approach has shifted. Instead of headline-chasing, the Sabah State Government has chosen institutional depth and economic realism — a style of leadership that may not always grab national attention but is increasingly delivering results on the ground. From Capacity to Delivery Sabah's next challenge is ensuring delivery keeps pace with ambition. Institutions are being rebuilt, but administrative culture and political stability must continue evolving. The state must also take greater ownership of climate resilience, digital transformation, and youth employment — all of which will define its trajectory over the next decade. Still, for a state so long defined by unrealised potential, the signs today are encouraging. Sabah is not just asking for more from the Federation — it is preparing to do more for itself. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]
Daily Express
08-06-2025
- Politics
- Daily Express
There must be open dialogue, mutual respect
Published on: Sunday, June 08, 2025 Published on: Sun, Jun 08, 2025 By: Datuk Roger Chin Text Size: By working together, all stakeholders can build a brighter future for Malaysia, one that benefits all its citizens. A Legacy of Discontent - Resolving Sabah and Sarawak's Oil and Gas Impasse Sabah and Sarawak, the emerald jewels of Borneo, are the economic powerhouses of Malaysia. Their vast oil and gas reserves fuel the nation's growth, yet a deep sense of discontent threatens to shatter this prosperity. The root of this tension lies in the unresolved issue of oil and gas rights, a legacy of historical promises and contemporary disagreements. Advertisement This paper delves into the complexities surrounding Sabah and Sarawak's claims, arguing that a critical review of existing frameworks, coupled with open dialogue and a commitment to equitable resource sharing, is essential for achieving a lasting solution. Broken Promises - The Malaysia Agreement of 1963 (MA63) and the Petroleum Development Act (PDA) The Malaysia Agreement of 1963 (MA63) stands as a cornerstone document, promising significant autonomy for Sabah and Sarawak over their natural resources, including oil and gas. However, the Petroleum Development Act 1974 (PDA) appears to contradict this very foundation. Advertisement Established under the cloak of a national emergency, the PDA vested sole authority over Malaysian oil and gas in Petronas, the national oil and gas company. This move by the federal government significantly altered the power dynamic, raising concerns about its adherence to the spirit and letter of MA63. Questioning Legitimacy and Transparency - Deeper Scrutiny Needed Legal scholars raise serious concerns about the PDA's legitimacy. Firstly, the absence of ratification by Sabah and Sarawak's state assemblies potentially violates Article VIII(2)(a) of MA63, which guarantees their control over their natural resources. This unilateral action by the federal government disregards democratic processes and undermines the autonomy promised to these resource-rich states. Secondly, the timing of the emergency coinciding with heightened racial tensions in 1974 necessitates a deeper examination of its true purpose. Was it a genuine crisis, or a convenient justification for a power grab over valuable resources? Scrutinizing historical records and emergency justifications becomes crucial in this context. Beyond legalities, the PDA's lack of transparency adds fuel to the fire. There's no record of citizen consent in these resource-rich states, and the current revenue-sharing formula within the PDA remains shrouded in secrecy. This lack of transparency fuels resentment, as vast wealth is extracted from Sabah and Sarawak with minimal reinvestment in these states. Statistics paint a stark picture - a 2022 World Bank report indicated that Sabah and Sarawak have a GDP per capita significantly lower than the national average. Additionally, these states consistently rank lower in metrics like road quality and access to healthcare compared to the developed peninsular states. The Human Cost of Inaction - Festering Wound and National Unity The extended state of emergency, lifted only in 2011, further stifled legal challenges to the PDA. Decades of simmering discontent have become a festering wound, threatening national unity. Ignoring these grievances has significant economic and social consequences. The oil and gas dispute stands as a major obstacle to national security, prosperity, and cohesion. A fractured Malaysia with a discontented Sabah and Sarawak is unlikely to achieve its full economic potential on the global stage. Beyond Money - A Fight for Self-Determination and Shared Prosperity Sabah and Sarawak's claims extend beyond mere monetary gain. They yearn for a fair deal, a chance to shape their own economic destinies. While increased oil royalty payouts are a necessity, the current model extracts vast wealth, leaving these states lagging behind. They deserve greater control over their resources, the power to decide how their wealth uplifts their people and fuels development. This is not a fight for greed; it's a fight for self-determination. They envision a future where they are active participants in shaping the national economic landscape, not just resource providers. Successful resource-sharing models exist in other federations. Canada's model grants significant autonomy to resource-rich provinces like Alberta over their oil and gas reserves, while ensuring a fair contribution to the national coffers. Similarly, the United Arab Emirates (UAE) employs a successful model where emirates rich in oil and gas contribute to a federal development fund. This fund is then used to support the development of less resource-rich emirates, fostering national unity and shared prosperity. These examples demonstrate that a balance can be achieved, allowing resource-rich regions to contribute to the national good while retaining a significant degree of control over their own resources. Implementing a similar framework in Malaysia, with revenue-sharing based on a transparent formula and provisions for regional development, could pave the way for a more equitable and sustainable future for all Malaysians. The Road to Reconciliation - A Call for Open Dialogue and Mutual Respect Open and honest dialogue involving all stakeholders is essential for forging a path towards reconciliation. This dialogue must extend beyond politicians to include economists, legal experts, and civil society representatives from Sabah and Sarawak. It must be a genuine attempt to understand the depth of discontent and explore solutions that address the root causes. Ignoring these grievances is a recipe for national fracture. A Sustainable Solution - Benefits for All Malaysians A sustainable solution requires a commitment from all parties involved. The federal government must acknowledge the legitimacy of Sabah and Sarawak's claims and demonstrate a willingness to revisit the existing agreements. This could involve: Establishing a revenue-sharing model that reflects a fairer distribution of oil and gas wealth, with a transparent formula that takes into account factors like production costs and depletion rates. Granting Sabah and Sarawak greater autonomy in managing their own oil and gas reserves, allowing them to decide on exploration, development, and production strategies. Investing in infrastructure development and social programs in Sabah and Sarawak to address historical neglect. This could include projects in transportation, education, healthcare, and rural development. Amending MA63 and related agreements to explicitly recognize Sabah and Sarawak's rights over their natural resources. By embracing a more equitable approach, Malaysia can unlock the full potential of Sabah and Sarawak. These resource-rich states can become not just contributors of wealth but active participants in shaping the national economic landscape. This will lead to a more prosperous and cohesive Malaysia, where all states feel they have a stake in the nation's success. Unity or Dissolution - The Choice Before Malaysia The fate of Sabah and Sarawak's oil and gas rights is a crossroads for Malaysia. The nation can choose the path of reconciliation and shared prosperity, or it can continue down the road of disenfranchisement and risk national dissolution. The time for empty promises and half-measures is over. Sabah and Sarawak deserve nothing less than genuine partnership, one that recognizes their rights and unlocks their full potential. Only then can Malaysia truly thrive as a united and prosperous nation. Call to Action The Malaysian government must take decisive steps to address the grievances of Sabah and Sarawak. A comprehensive review of existing agreements, coupled with open dialogue and a commitment to equitable resource sharing, is essential for achieving a lasting solution. By working together, all stakeholders can build a brighter future for Malaysia, one that benefits all its citizens. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]
Daily Express
25-05-2025
- Entertainment
- Daily Express
We have the mountain, sea but no song
Published on: Sunday, May 25, 2025 Published on: Sun, May 25, 2025 By: Datuk Roger Chin Text Size: IF you ask a European or Japanese traveller to hum ' Malaysia, Truly Asia ', chances are they still can — more than two decades after it first aired. It wasn't just an ad. It was a siren song. A masterstroke in destination branding. It ran across CNN, BBC, and hotel screens from Berlin to Bangkok. It made you feel something. It made Malaysia unforgettable. Now ask the same person about Sabah. Chances are, they'll blink. 'Where?' This is the hard truth we must confront - Sabah is not as well-known as we often assume. Despite our stunning natural assets, cultural richness, and world-class dive sites, Sabah hasn't broken into the global consciousness — not in the way Bali, Phuket, or even Langkawi have. Feel Sabah? The World Doesn't Yet Our current tourism campaign, 'Feel Sabah', is noble in intention — but muted in execution. It's played on loop at trade fairs, projected on booth monitors, and shared via localised digital content. But it lacks the vital ingredients of great destination storytelling - a hook, a heartbeat, a voice. Advertisement It lacks music. And without a strong emotional anchor, even the most breathtaking visuals get lost in the noise of global tourism. In an industry where travellers are bombarded with similar promises of 'pristine beaches' and 'untouched rainforests,' we must ask - What truly sets Sabah apart? The World Remembers a Feeling What made 'Malaysia Truly Asia' iconic wasn't just the imagery. It was the jingle — catchy, colourful, culturally layered. You could close your eyes and still know what Malaysia felt like. You could sing it. You could remember it. Sabah needs that. A soundtrack. A musical identity that doesn't just describe Sabah — it defines it. We have the talent. Asmin Mudin, a proud Sabahan, wrote 'Kau Ilhamku', one of Malaysia's most beloved songs, and 'Sayang Kinabalu', an ode to the majestic mountain and the spirit of its people. These aren't just songs. They are emotional signatures — exactly what Sabah needs to break through the global tourism fog. So why haven't we called on Asmin, or other Sabah musicians, to craft a true anthem for our state? Visibility Isn't Recognition Yes, tourists do come — especially from China. But our reach is narrow. Most Chinese visitors to Sabah hail from a few southern provinces, particularly Guangdong. The rest of China — vast, curious, and travel-hungry — remains largely unaware of our existence. This limited recognition extends globally. Sabah is known in niche circles — divers, trekkers, wildlife lovers — but not in the mainstream. In truth, we are still a well-kept secret. And in a saturated region like Southeast Asia, where dozens of destinations offer similar natural appeals, being unknown is a liability. Tourism is Not Just Branding — It's Survival For many in Sabah, tourism is not a luxury industry — it's a livelihood. From Kundasang homestays to artisans in Keningau and boat operators in Semporna, the tourism economy is a local economy. Done well, it generates jobs, sustains villages, and uplifts indigenous communities. A world-class tourism campaign, then, is not vanity. It is economic policy. And yet, Sabah's tourism marketing remains largely dependent on federal allocations, shaped far from the realities of our terrain. Without control over our own global messaging or sufficient investment in sustained international promotion, we're left whispering in a crowded room. The Case for a New Campaign What Sabah needs is not another slogan. We need a movement — one that speaks in music, breathes through imagery, and lives in people's hearts. Imagine a campaign that: Launches with a Sabah anthem, composed by a Sabahan, backed by a cinematic short film. Rolls out across global platforms — Netflix trailers, YouTube, Spotify, CNN, Discovery. Features not just nature, but our people, rhythms, and rituals — from the Bajau Laut to the Murut highlands, from orangutans to ocean sunsets. Imagine someone in Paris hearing a melody and saying, 'That's from Sabah.' That is the power of identity done right. Beyond Borneo - Tell the Bigger Story There's also an opportunity to collaborate across borders. The average tourist doesn't differentiate between Sabah, Sarawak, and Kalimantan — they just know 'Borneo.' Why not lean into that and develop a unified Borneo eco-tourism brand — a partnership that highlights our rainforests, our indigenous cultures, our wildlife, and our commitment to conservation? Sabah could lead this narrative, positioning itself as the beating heart of wild Borneo. Let Sabahans Tell Sabah's Story Let's also make this campaign ours. Launch a 'This is Sabah' initiative — inviting youth, musicians, filmmakers, and photographers to submit their Sabah. Let authenticity drive reach. Let the campaign be participatory, emotional, and grassroots. And let our diaspora — Sabahan artists, scholars, and leaders abroad — become our global ambassadors. Because the most powerful branding is not what you say about yourself — it's what others say about you when you're not in the room. Hear Sabah. See Sabah. Live Sabah. We already have the mountain. We already have the sea. We already have the story. What we lack is a chorus. If we want the world to visit us, we must first make them feel us. And the fastest path to the heart is through sound. It's time to give Sabah a soundtrack — and let the world finally hear us. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]
Daily Express
18-05-2025
- Business
- Daily Express
Sabah's distinct advantage for investors
Published on: Sunday, May 18, 2025 Published on: Sun, May 18, 2025 By: Datuk Roger Chin Text Size: SABAH is a standout destination for both foreign and domestic direct investment, surpassing Sarawak and Peninsular Malaysia in various strategic, economic, and policy-driven metrics. The state's unique combination of natural resources, cost advantages, strategic geographic location, and forward-thinking governance makes it the clear choice for investors looking to expand in Southeast Asia. Advertisement Below is a detailed comparative analysis of why Sabah outshines Sarawak and Peninsular Malaysia as an investment destination. Strategic Geographic Advantage Sabah's location at the northern tip of Borneo places it in the heart of the Asean region. It is geographically closer to key global markets such as China, Japan, South Korea, and the Philippines compared to Sarawak and Peninsular Malaysia. This proximity reduces shipping times and logistical costs for businesses targeting East Asia and Pacific trade routes. Advertisement Advantage Over Sarawak - While both Sabah and Sarawak are located on Borneo, Sabah's ports are better positioned for direct international trade. The Sepanggar Bay Container Port in Kota Kinabalu serves as a deep-water transshipment hub, capable of handling large vessels for global shipping routes. Sarawak's ports, such as those in Kuching and Bintulu, cater primarily to domestic and regional trade, limiting their appeal for global exporters. Advantage Over Peninsular Malaysia - While Peninsular Malaysia enjoys proximity to the Strait of Malacca, it faces heavy congestion and competition in established ports like Port Klang and Tanjung Pelepas. Sabah, with its less congested and expanding port facilities, provides a cost-effective alternative for exporters and manufacturers seeking seamless access to international markets. Resource Diversity and Economic Stability Sabah boasts a broader range of natural resources than either Sarawak or Peninsular Malaysia. Its economy benefits from a diversified resource base that includes oil and gas, palm oil, fisheries, and forestry, alongside growing renewable energy potential. Advantage Over Sarawak - While Sarawak heavily depends on oil and gas exports and its SCORE (Sarawak Corridor of Renewable Energy) initiative, Sabah has successfully diversified its economy. The palm oil sector, supported by integrated downstream facilities such as the Palm Oil Industrial Cluster (POIC) in Lahad Datu, contributes significantly to Sabah's GDP. Additionally, Sabah's marine biodiversity positions it as a leader in fisheries and aquaculture, industries where Sarawak has limited activity. Advantage Over Peninsular Malaysia - Peninsular Malaysia's reliance on industrialisation and urban-centric growth makes its economy vulnerable to global trade fluctuations. Sabah, by contrast, balances natural resource exploitation with emerging industries like eco-tourism and green energy, providing economic stability even during global downturns. Competitive Cost Structure Sabah offers a significantly lower cost of doing business compared to Sarawak and Peninsular Malaysia. Labour costs, land acquisition prices, and utility rates are all more affordable, giving businesses a competitive edge. Labour Costs - Sabah's labour market is competitive, with lower wages for skilled and unskilled workers compared to Peninsular Malaysia. For example, industrial wages in Sabah are often 10–20% lower than in urban centres like Kuala Lumpur and Johor Bahru. Sarawak's wages are comparable but often constrained by a smaller talent pool due to its lower population density. Land Costs - Sabah's land acquisition costs for industrial, commercial, and agricultural purposes are significantly cheaper than Peninsular Malaysia's urbanised areas. In Sarawak, Native Customary Rights (NCR) land issues create additional legal and procedural hurdles, which Sabah's clear land policies under the Sabah Land Ordinance effectively avoid. Utility Costs - Sabah's water tariffs are among the lowest in Malaysia, and the state's renewable energy initiatives are driving down electricity costs, making it attractive for energy-intensive industries such as manufacturing and agriculture. Infrastructure and Connectivity Sabah's infrastructure is rapidly developing to support its growing economy, with investments in ports, airports, roads, and digital connectivity. Advantage Over Sarawak - While both states face challenges in rural infrastructure, Sabah has outpaced Sarawak in developing integrated logistics hubs such as the Kota Kinabalu Industrial Park (KKIP) and the Sepanggar Bay Container Port. Sarawak's SCORE initiative has primarily focused on energy-intensive industries, limiting broader industrial and logistical growth. Advantage Over Peninsular Malaysia - Peninsular Malaysia's infrastructure is advanced but often congested in urban centres like Kuala Lumpur and Johor Bahru. Sabah, by contrast, offers well-planned industrial zones and a more accessible environment for businesses looking to avoid the delays and inefficiencies associated with overburdened infrastructure. Tourism Industry Leadership Sabah has positioned itself as Malaysia's leader in eco-tourism and nature-based tourism, leveraging its unique biodiversity and cultural heritage. Advantage Over Sarawak - While Sarawak also has eco-tourism offerings, such as the Mulu Caves, Sabah has a more mature and globally recognised tourism sector. Iconic attractions like Mount Kinabalu, Sipadan Island, and the Danum Valley rainforest attract international visitors, driving robust tourism revenues. Sabah's tourism infrastructure, including luxury resorts and adventure activities, is more developed and diverse. Advantage Over Peninsular Malaysia - Peninsular Malaysia's tourism is urban-centric, focused on cities like Kuala Lumpur and Penang. Sabah, with its pristine natural environment, appeals to high-value eco-tourists seeking unique experiences. This differentiation positions Sabah as a leader in sustainable tourism, an increasingly lucrative market segment. Proactive Governance and Investor Support Sabah's government has been particularly proactive in fostering an investor-friendly environment, with streamlined processes, tax incentives, and targeted economic initiatives. Advantage Over Sarawak - Sarawak's investment environment can be hampered by bureaucratic delays and land ownership issues related to NCR land. Sabah's governance, under the Sabah Economic Development and Investment Authority (SEDIA), is focused on reducing red tape and ensuring transparency. The Sabah Development Corridor (SDC) offers tailored incentives, including tax exemptions and investment allowances, to attract investors in priority sectors. Advantage Over Peninsular Malaysia - Peninsular Malaysia, while offering a business-friendly environment, is often less flexible due to its size and centralised bureaucracy. Sabah's state-driven approach allows for quicker decision-making and customised solutions for investors. Social and Political Stability Sabah's diverse population and inclusive governance contribute to a stable socio-political environment, which is critical for long-term investments. Advantage Over Sarawak - Sabah's population is larger and more urbanised than Sarawak's, providing a more dynamic consumer base and labour force. Additionally, Sabah has faced fewer disputes over federal-state relations compared to Sarawak, where demands for greater autonomy can sometimes create uncertainty. Advantage Over Peninsular Malaysia - Sabah's political landscape is less polarised than Peninsular Malaysia's, where ethnic and regional divisions often influence governance and policy. This stability makes Sabah an appealing destination for businesses seeking consistency and predictability. Emerging Sectors and Future Potential Sabah is rapidly expanding its presence in emerging sectors, including renewable energy, halal industries, and the digital economy. Renewable Energy - Sabah's untapped potential in hydropower, biomass, and solar energy positions it as a leader in sustainable energy production, far ahead of Peninsular Malaysia's urban-constrained energy grid and Sarawak's SCORE, which is heavily tied to hydropower alone. Halal Industries - Sabah's proximity to Muslim-majority markets in Asean and the Middle East makes it an ideal hub for halal-certified products, including food, pharmaceuticals, and cosmetics. This industry is less developed in Sarawak and Peninsular Malaysia. Sabah as the Preferred Investment Destination Sabah offers a unique combination of advantages that make it the superior choice for investment compared to Sarawak and Peninsular Malaysia. Its strategic location, diversified economy, lower costs, robust infrastructure, and proactive governance create an ideal environment for businesses seeking growth and profitability. With its focus on sustainability, emerging industries, and inclusivity, Sabah is not just a destination for investment—it is a blueprint for Malaysia's future economic success. Investors seeking long-term opportunities in Southeast Asia will find Sabah to be the best decision they could make. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]
