5 Challenges Sabah Must Face in Order to Prosper

Prime Minister Tan Sri Muhyiddin Yassin recently announced that Sabah would receive just over RM5 billion under the 12th Malaysia Plan to bring it up to speed with the rest of the country within the next 10 years. Dr Firdausi Suffian, Senior Lecturer in Public Policy at UiTM Sabah, laid out the challenges that need to be addressed.

1. All Their Eggs In a Basket

Sabah was hit hard by the pandemic compared to other states, partly due to being overly dependent on its services sector, which makes up 46% of the state’s GDP but is mostly driven by tourism. The state has only one other major sector, resource extraction (mining, quarry work, agriculture), and the reliance on only a few industries has made for a fragile economy, especially if one such industry should suffer a catastrophic failure.

2. Diversity is Strength

The logical solution is for Sabah to diversify its portfolio by creating more downstream industries to feed low- and mid-range, value-added activities, such as skilled work and technology industries. An introduction of gradual structural change will not only create more job opportunities for the local population, but also build a more robust ecosystem that can withstand global challenges.

3.Process Locally

The aforementioned resource extraction model is not only inefficient, but also denies opportunities to local industries. Sabah’s timber industry, for example, sends its raw materials to China, where it is processed and then reimported to be used in the Malaysian furniture industry. The food industry is similar in that it does not plug enough back into Sabah’s local economy.

4. Narrowing the Divide

The First Rolling Plan of the 12th Malaysia Plan includes 1,039 projects aimed at developing Sabah’s rural areas by building connectivity, infrastructure, and schools to close the gap with urban areas. Infrastructure especially is a long-standing issue, as most of the state’s poor people live in rural areas, are involved in agriculture, yet have no access to infrastructure to sell their produce.

5. Current Problems are Old Problems

Sabah has had a well-documented history of poor governance, with reports of corruption reaching down to the local level in many parts of the state – a situation not helped by the many changes of government Sabah has seen over the past 40 years. While it is acknowledged that local governments play an important role in uplifting their constituents, there is also a need to address blanket policies like cash transfers or injections, which are a holdover from previous administrations and do not always apply to all localities.