By Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice President of CILT International for Southeast Asia
KOTA KINABALU: As Sabah stands at the cusp of a transformative era, the proposal for a new Sabah Economic Model (SNEM) heralds a pivotal moment in the state’s development journey.
This initiative, spearheaded by the Sabah Economic Advisory Council (SEAC) in collaboration with Universiti Malaysia Sabah (UMS) and the Institute for Development Studies (Sabah), comes at a critical juncture when Sabah seeks to leverage significant national budget allocations while addressing its unique challenges and opportunities.
The SNEM represents not just a new economic framework but a bold vision for Sabah’s future, one that promises to redefine the state’s economic landscape and its role in Malaysia’s broader development narrative.
The need for a tailored economic approach
While national frameworks like the MADANI Economy and the Sabah Development Corridor (SDC) provide important guidelines, they may not fully address Sabah’s specific economic landscape. The proposed SNEM aims to create a more targeted, empirically based framework that complements these national initiatives while focusing on Sabah-centric issues.
This approach represents a paradigm shift from traditional five-year planning cycles to a more dynamic, responsive economic management strategy.
Chief Minister Datuk Seri Hajiji Noor’s openness to this proposal underscores the state government’s commitment to innovative approaches for accelerating Sabah’s economic growth. The SNEM could potentially address long-standing issues such as rural-urban disparities, economic diversification, and increased local participation in key sectors.
By embracing this new model, Sabah is positioning itself not just as a recipient of federal development plans but as an active architect of its own economic destiny.
Budget 2025: A Catalyst for Sabah’s Development
The recently announced Budget 2025 demonstrates the federal government’s commitment to Sabah’s development, with a substantial allocation of RM6.7 billion for the state’s development fund. This recognition of Sabah’s importance in the national economic landscape is further emphasised through various targeted investments:
Infrastructure Development: The Pan Borneo Sabah Phase 1B project, valued at RM9.7 billion, promises to revolutionise connectivity within the state, enhancing trade, tourism, and overall economic activity. This massive infrastructure project is not just about building roads; it’s about connecting communities, opening up new economic corridors, and positioning Sabah as a key logistical hub in East Malaysia.
Airport Expansion: A RM253 million allocation for expanding Tawau Airport aims to boost tourism and facilitate trade, potentially transforming Sabah’s position in regional commerce. This investment in air connectivity could be a game-changer for Sabah’s tourism industry and its ability to attract international investors.
Special Grants: The doubling of special grants to RM600 million empowers state governance, providing resources for state-specific development projects. This increased financial autonomy allows Sabah to tailor its development initiatives more closely to local needs and priorities.
Support for Key Industries: The increase in the windfall profit levy threshold for palm oil prices recognises and supports a crucial sector of Sabah’s economy. This move demonstrates a nuanced understanding of Sabah’s economic pillars and the need to support them through targeted policies.
Rural Development: With RM1.8 billion allocated for constructing and upgrading village roads and RM500 million for providing clean water and electricity to rural homes, the budget addresses the critical need to bridge the urban-rural divide in Sabah. These investments in basic infrastructure are fundamental to ensuring equitable development across the state.
Alignment with the MADANI Framework and Implementation Challenges
The budget’s alignment with the MADANI Economy framework suggests a long-term vision for sustainable and inclusive growth, focusing on technology adoption, green initiatives, and human capital development. However, the effectiveness of these measures will hinge on efficient implementation and the state government’s ability to utilise funds effectively and complete projects in a timely manner. The challenge lies not just in the allocation of resources but in their strategic deployment to create lasting impact.
The Imperative for SNEM
Despite the positive allocations in Budget 2025, the need for a Sabah-specific economic model remains paramount. The proposed SNEM could serve as a crucial bridge between federal initiatives and local realities, providing a tailored approach to Sabah’s unique economic challenges and opportunities. This model could:
- Offer data-driven insights into Sabah’s economic strengths and weaknesses, allowing for more targeted and effective policy interventions.
- Identify key growth sectors specific to Sabah’s resources and capabilities, potentially uncovering new economic frontiers for the state.
- Propose targeted strategies for addressing rural-urban disparities, ensuring that development benefits reach all corners of Sabah.
- Outline pathways for sustainable economic diversification, reducing Sabah’s dependence on traditional sectors and building resilience against economic shocks.
- Suggest mechanisms for increasing local participation in key economic sectors, empowering Sabahans to take ownership of their economic future.
The SNEM also presents an opportunity to leverage Sabah’s unique position as a biodiversity hotspot and its potential in green technology and sustainable tourism. By integrating these elements into its economic strategy, Sabah could position itself as a leader in sustainable development, attracting eco-conscious investors and tourists alike.
Conclusion: Charting a Unique Path Forward
Budget 2025 represents a significant step forward for Sabah’s economic development. However, to fully capitalise on these allocations and achieve sustainable, long-term growth, Sabah must develop its own comprehensive economic strategy. The proposed SNEM could play a pivotal role in this regard, helping to align federal support with local priorities and ensuring that Sabah’s economy grows in a way that benefits all its citizens.
As Sabah embarks on this journey of economic renaissance, the SNEM offers the potential to create a blueprint for development that is uniquely Sabahan—one that respects the state’s cultural heritage, leverages its natural resources sustainably, and positions Sabah as a key player in the regional and global economy. The success of this model could not only transform Sabah but also provide valuable lessons for other states and regions seeking to balance local needs with national development goals.
The path ahead is challenging but filled with promise.
With the right approach, guided by the SNEM and supported by federal initiatives, Sabah stands poised to enter a new era of prosperity, sustainability, and inclusive growth. The time has come for Sabah to write its own economic success story, one that will resonate for generations to come. As Sabah charts this new course, it has the opportunity to become a model of balanced development, where economic growth goes hand in hand with social progress and environmental stewardship. The SNEM is not just an economic model; it’s a vision for a brighter, more prosperous Sabah, ready to take its place as a dynamic force in Malaysia’s economic future.
