Land of the Hornbills flying high
THE state government’s push to make Sarawak a developed state by 2030 has been drawing positive attention, particularly from the investment community.
From coverage on the discussions between Petroleum Sarawak Bhd (Petros) and Petroliam Nasional Bhd (PETRONAS), to mega projects being linked with the state, it seems that the Land of the Hornbills could receive a great deal of attention over the next few years and will be a focus for the flow of capital.
Senator Robert Lau Hui Yew says state revenue has doubled over the last six years, reaching RM13bil in 2023, enabling the state government to increase its annual development budget.
The 2030 target is an initiative under the Post-Covid-19 Development Strategy.
Lau tells StarBiz 7 that the government is focusing on renewable energy and developing green hydrogen fuel. Hydropower and solar energy production are also being ramped up to meet the demand for energy.
This has resulted in a boom in the construction industry and other related activities, such as retail, manufacturing and supply of building materials and equipment, transport, management, finance, accommodation, healthcare and food supplies, all with plenty of investment opportunities.
Lau predicts more investments from Peninsular Malaysia in these areas.
“Construction companies like Sunway Bhd and healthcare companies like IHH Healthcare Malaysia Bhd have already entered the market. In addition, large national retailers and consumer outlets have opened up across Sarawak,” says Lau, who is also Sarawak United People’s Party (SUPP) chairman for Bawang Assan.
Lau says, however, Sarawak needs to improve in the booming data centre industry, something that has been sweeping Peninsular Malaysia of late.
The state lags in this relatively new sector, he says, possibly because of input-resource constraints. In addition, the peninsula has better physical and Internet connectivity.
“The federal government could support Sarawak by investing in the relevant infrastructure,” he suggests.
Singapore-based Sarawakian senior international business and policy adviser Tan Kee Hian says Sarawak has made notable progress although its rich natural resources have not been fully exploited, and their benefits unevenly distributed.
He says its existing infrastructure, human capital, financial assets and social harmony provide a strong foundation for further development.
He says that Sarawak is well-positioned to capitalise on global trends, such as the demand for artificial intelligence which requires large data centres, renewable energy in the form of hydro and solar power, and agri-food sectors related to food security. “There are also opportunities in other sectors,” he adds.
According to Nixon Wong, chief investment officer at fund management company Tradeview Capital, Sarawak offers significant investment potential due to its abundant natural resources and strategic initiatives like the Sarawak Corridor of Renewable Energy, premised on its status as Malaysia’s fourth largest contributor to gross domestic product (GDP) with about 10% share.
“It also accounts for more than 60% of Malaysia’s oil and gas reserves and 90% of its liquefied natural gas exports, so key sectors include renewable energy, oil and gas, as well as heavy industries such as aluminum smelting and steel production, benefit from Sarawak’s renewable hydropower resources,” says Wong.
He says there is also growing interest in solar and biomass energy, aligning with global sustainability trends, for instance the collaboration between Resintech Bhd and the Sarawak Economic Development Corporation to develop and produce sustainable aviation fuel from algae.
SUPP’s Lau believes Sarawak’s growth will benefit Malaysia as a whole, pushing up the country’s GDP with the rising economic tide in Sarawak.
He says building the talent pool is Sarawak’s main challenge in its quest to be a developed state.
“On this front, from 2026 onwards, the state government will make tertiary education free for all Sarawakians who study science, technology, engineering, and mathematics subjects at tertiary institutions in the state.
“It is also setting up international schools offering free primary and secondary schooling for the B40 segment. Science and mathematics will be taught in English. This will have significant positive impact in the long term,” Lau remarks.
However, with this being a time-intensive initiative, he says the state government can do better in attracting foreign talent, with commensurate incentives and an environment for building up families and communities.
He says the state also needs to ensure local talent does not leave, adding that many do not return after graduating from abroad or Peninsular Malaysia.
“We need to immediately close the policy and management gap by improving our efficiency and productivity. Professional leadership for planning, strategising and implementation is crucial here,” says Lau.
Looking beyond GDP numbers, Sunway University professor and economics adviser to the prime minister Dr Yeah Kim Leng says Sarawak has been attracting significant energy-intensive industries with its abundant hydropower and other renewable-energy resources.
“It has strong investment potential in downstream petroleum, petrochemical, agricultural, bio-tech and forestry industries while the push to expand high-value manufacturing and services is in the right direction. Its industrial upgrading will enable the country’s digital and green economy goals to be achieved more quickly,” says Yeah.