By Brendon Beliku
Brendon Beliku is a Regional Corporate Mobility Coordinator for an international corporate immigration firm specializing in East Malaysian immigration regulatory compliance. He is also an independent public policy analyst.
KOTA KINABALU: The False Choice Between Compliance and Competitiveness-
If governance is to become Sabah’s next competitive advantage, the debate must move beyond a false choice between stronger compliance and greater efficiency.
The two are not mutually exclusive. Jurisdictions that consistently attract high quality investment demonstrate that competitiveness depends less on the quantity of regulation than on the quality of its administration. Investors rarely object to regulation itself.
They object to regulatory uncertainty, inconsistent interpretation and unnecessary administrative burdens. Businesses can adapt to compliance because it is measurable. Uncertainty, however, is difficult to manage, increasing operational risk, delaying investment decisions and ultimately eroding institutional confidence.
This distinction is becoming increasingly important as global investment evolves beyond traditional financial considerations. Institutional investors, multinational corporations and international supply chains are placing greater emphasis upon governance quality, not merely as a measure of political stability, but as an indicator of operational reliability.
According to the Organisation for Economic Co-operation and Development (OECD), effective regulation should achieve public policy objectives while minimising unnecessary burdens on citizens and businesses.
Similarly, the World Bank’s Business Ready (B-READY) framework evaluates not only whether regulations exist, but whether they are implemented efficiently and consistently.
These developments reflect an emerging international consensus that regulatory effectiveness is measured less by legislative volume than by administrative performance. For Sabah, this represents both a challenge and an opportunity.
As the state seeks to attract higher value industries under RMK13, ranging from advanced manufacturing and logistics to the blue economy and renewable energy, investment decisions will increasingly depend upon institutional confidence.
A company contemplating a multi million ringgit investment is unlikely to base its decision solely on tax incentives or industrial land availability.
It will also examine the broader operating environment, namely whether government agencies communicate effectively with one another, whether regulatory requirements remain consistent throughout the approval process and whether commercial timelines can be planned with reasonable certainty.
These considerations are not secondary. They have become central to modern investment strategy.
– New Regulatory Governance Optics-
Consequently, Sabah should begin viewing compliance through a different lens. Compliance should remain uncompromising in principle because the rule of law, environmental protection, labour standards and public accountability cannot become negotiable simply to accelerate investment.
However, the administration of compliance should become significantly more adaptive, proportionate and coordinated. The objective is not to regulate less. The objective is to regulate better.
This may be described as Competitive Compliance, a governance framework in which regulatory integrity, administrative efficiency and economic competitiveness reinforce one another instead of existing in perpetual tension.
The first principle of Competitiv
Compliance is that compliance remains non negotiable. Every investor, regardless of size or sector, should operate within the same legal framework because institutional credibility depends upon consistent enforcement.
Governments that selectively apply regulations may achieve short term investment gains, but they ultimately weaken public confidence and undermine the predictability that sophisticated investors seek.
The second principle is risk based administration. Not every application presents the same degree of regulatory risk, nor should every application be subjected to identical administrative treatment.
Lower risk activities should progress through government more efficiently, while higher risk proposals continue to receive rigorous scrutiny.
Such an approach allows institutions to concentrate finite resources where oversight is genuinely required instead of dispersing them uniformly across every transaction.
Singapore, Australia and the United Kingdom have progressively adopted variants of risk based regulation precisely because it improves regulatory outcomes without compromising accountability.
The third principle is administrative proportionality. Compliance should correspond to the public interest being protected. If multiple agencies require similar information, government should increasingly coordinate those requirements internally rather than expecting businesses to navigate institutional fragmentation independently. In practical terms, businesses should spend more time developing investments and less time acting as intermediaries between government departments.
This naturally leads to the fourth principle, namely institutional interoperability.
Digital government should never be understood merely as the digitisation of paper forms. Its real value lies in enabling institutions to communicate seamlessly, share verified information securely and coordinate administrative decisions without unnecessary duplication. Estonia’s internationally recognised X Road digital infrastructure remains one of the clearest examples of this philosophy because it transformed government by connecting institutions rather than simply computerising individual agencies.
The lesson for Sabah is not technological imitation, but institutional integration. Digital transformation succeeds only when governance itself becomes interconnected.
-Public Governance by ESG-
The fifth and perhaps most significant principle is ESG centred public governance. Environmental, Social and Governance (ESG) has traditionally been discussed within the corporate sector, particularly in relation to sustainability reporting, investment disclosures and responsible business practices.
Increasingly, however, the same principles should inform public administration because governments themselves shape the institutional environment within which ESG is expected to flourish.
It is difficult to encourage businesses to uphold transparency, accountability and responsible governance if public institutions do not consistently demonstrate those same values through their own regulatory conduct.
ESG should no longer be viewed merely as a corporate reporting framework. For Sabah, it must evolve into a governing philosophy, shaping procurement, regulation, public service delivery and institutional accountability. Government should hold itself to the same standards it expects of business, making ESG an operational benchmark rather than an external expectation.
Critics may argue that stronger compliance inevitably creates bureaucracy and delays investment.
While understandable, these shortcomings stem not from compliance itself but from poor administrative design. Excessive documentation, duplicated approvals and fragmented institutional responsibilities reflect governance inefficiency, not regulatory strength.
Compliance without proportionality produces bureaucracy, while efficiency without compliance creates risk.
“Competitive Compliance” reconciles both by ensuring regulatory integrity is delivered through adaptive, coordinated and proportionate administration.
Ultimately, Sabah’s competitive advantage will depend less on the infrastructure it builds than on the confidence its institutions inspire through transparent regulation, predictable compliance and integrated public administration.
