Sarawak has emerged as a beacon of economic resilience and growth this year, thanks to a range of achievements and strategic initiatives that have fuelled the state’s success.
Key drivers and notable milestones have significantly shaped Sarawak’s economic performance, reinforcing its status as a formidable global player.
Financial milestones
The state received its first piece of good news when Prime Minister Datuk Seri Anwar Ibrahim announced on January 20 a substantial increase in the special grant for Sarawak under Article 112D of the Federal Constitution. The grant was raised from RM16 million to RM300 million. Anwar said that this amount is an interim payment pending the announcement of a special formula later.
Another positive development was Sarawak’s record revenue of RM11.9 billion for 2022, the highest ever for the state and 17 per cent above the projected RM1.02 billion. Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg noted that Sarawak’s revenue comprised four main categories: tax revenue, non-tax revenue, non-revenue receipts, and federal grants and reimbursements.
At the recently concluded State Legislative Assembly (DUN) Sitting in November, Abang Johari announced that Sarawak’s revenue collection as of October this year reached RM11.63 billion, surpassing the original estimate of RM11.35 billion for 2023. The actual revenue primarily originated from major sources, including state sales tax (SST) of RM4.23 billion, cash compensation for oil and gas rights of RM2.86 billion, dividends of RM2.09 billion, and federal grants and reimbursements of RM270 million.
The 2024 State Budget of RM12.36 billion, representing a 7.5 per cent increase from this year’s RM11.5 billion, was unanimously passed during the DUN Sitting.
Themed ‘Development for All: Together, Building a Prosperous, Sustainable, and United Sarawak’, the budget allocates RM7.8 billion for development and RM4.56 billion for operating expenses.
Abang Johari stated that the budget would continue to provide allocations to key sectors to accelerate economic development, aiming to create a prosperous, robust, and resilient state economy.
He also revealed that next year, 45 per cent of the state’s revenue is expected to come primarily from the state sales tax (RM4.57 billion), including RM3.53 billion from crude oil and other petroleum products; RM850 million from crude palm oil and crude palm kernel; RM80 million from aluminum products; RM70 million from the lottery; RM33 million from timber products; and the remaining RM5 million from coal.
Other revenue sources include raw water royalty (RM600 million), forest royalty, timber premium and tariffs (RM290 million), mining royalties, land rents, and others.
Revenues from non-tax sources are also estimated at around RM6.39 billion. This includes RM2.86 billion from cash compensation for oil and gas rights; RM2.16 billion from dividends; RM698 million from interest; RM400 million from land premium; and RM120 million from cash compensation for import and excise duties on petroleum products.
As a result of various economic and developmental programmes, Sarawak has achieved high-income status ahead of its 2030 target, according to the World Bank’s new country classifications by income level for 2022-2023.
Sarawak’s gross national income (GNI) per capita exceeds US$13,205. The World Bank categorises economies into four income groups: low, lower-middle, upper-middle, and high-income, updated annually on July 1 based on the previous year’s GNI per capita.
With this achievement, Sarawak joins Penang and the federal territories of Labuan and Kuala Lumpur as high-income states in Malaysia.
Transportation projects
Watch for the Kuching Urban Transportation System (KUTS) project next year, covering Samarahan and Kuching divisions, bolstered by RM900 million in funding.
Phase 1 of the project will develop three autonomous rapid transit (ART) lines (blue, red, and green).
KUTS Phase 1 will be supplemented by hydrogen feeder bus service to provide first and last-mile connectivity to passengers.
Covering 70 kilometres, Phase 1 is expected to begin operations in stages between 2025 and 2027, targeting full completion.
Sarawak Metro Sdn Bhd, a subsidiary of Sarawak Economic Development Corporation (SEDC), is tasked with implementing the KUTS project under the state Transport Ministry.
The Blue Line will stretch from Rembus near Universiti Sarawak Malaysia (UNIMAS) in Kota Samarahan to Hikmah Exchange in the city.
Sovereign wealth fund
The Sarawak Sovereign Wealth Future Fund, set to be operational on January 1 next year, is another significant development. It will start with an initial appropriation of RM8 billion from the state and receive scheduled annual appropriations.
The appointment of nine members to the wealth fund’s board of guardians and the establishment of structural and governance frameworks have paved the way for this launch.
The board, led by former Federal Court judge Tan Sri Sulong Matjeraie as its chairman, includes Tan Sri Leonard Linggi Jugah, Tan Sri Ahmad Nizam Salleh, Datuk Iain John Lo, Grainne Dooley, Mohsen Fahmi, Datuk Soedirman Aini, Datuk Seri Talat Mahmood Abdul Rashid, and Datuk Seri Dr. Wan Lizozman Wan Omar, serving a three-year term.
Green economy initiatives
In pursuit of a sustainable green economy, the state’s first industrial microalgae production facility, The Chitose Carbon Capture Central Sarawak (C4 Sarawak), was launched.
The 5ha facility at Sejingkat Power Generation, Jalan Bako, is Malaysia’s first to demonstrate the effective use of flue gas in large-scale algae production.
Initiated in 2020, the microalgae project is led by Japan’s Chitose Group, in collaboration with Sarawak Energy Berhad (SEB) and Sarawak Biodiversity Centre (SBC). It is fully funded by the New Energy and Industrial Technology Development Organization (NEDO) and managed by Japan’s Ministry of Economy, Trade and Industry.
Abang Johari said that this facility could create up to 5,000 new jobs and decarbonise approximately 200,000 tonnes of carbon annually.
Sarawak is making strides in its green hydrogen economy through two major hydrogen manufacturing projects: H2biscus and H2ornbill, expected to be operational in Bintulu Petchem Industrial Park by 2027.
SEDC Energy Sdn Bhd, in partnership with Japan’s Sumitomo Corp and Eneos, is working on the H2ornbill project, which involves large-scale green hydrogen production.
SEDC Energy has also partnered with three South Korean multinationals—Samsung Engineering, Posco, and Lotte Chemicals—to develop a green hydrogen derivative facility.
The H2biscus project aims to produce 7,000 tonnes per year of green hydrogen for domestic use, 600,000 tonnes per year of blue ammonia, 630,000 tonnes per year of green ammonia, and 460,000 tonnes per year of green methanol for export.
Samsung Engineering began the Sarawak H2biscus Green Hydrogen and Ammonia Front End Engineering Design (FEED) project in November. The FEED for a green hydrogen plant with an annual capacity of 150,000 tons and a green ammonia conversion plant with a capacity of 850,000 tons in Sarawak is expected to be completed next year.
Aviation development
The establishment of a Sarawak boutique airline is also progressing, following a memorandum of understanding between the Sarawak government, through Hornbill Skyways Sdn Bhd, and the Malaysian Aviation Group (MAG) to acquire MASWings Sdn Bhd.
This MoU follows an initial agreement with the federal government in July regarding the takeover of the management of Rural Air Service (RAS) in Sarawak and Sabah.
Abang Johari recently announced that Sarawak aims to launch the airline’s first flight in the second or third quarter of 2024.
Focus on education
Education remains a top priority under Abang Johari’s leadership, with the goal of cultivating competitive and knowledgeable Sarawakians.
Accordingly, the Sarawak government has decided to establish five international schools under Yayasan Sarawak, offering Form One to Form Five classes using the Cambridge syllabus with English as the medium of instruction.
The five Yayasan Sarawak International Secondary Schools, located in Petra Jaya, Semenggoh, Sibu, Miri, and Bintulu, have already begun operations, with the Petra Jaya school as the first to open in 2022.
Additionally, the state government plans to provide free tertiary education to Sarawakian students attending Sarawak-owned universities by 2026, demonstrating its commitment to supporting underprivileged parents and students.
Sarawak’s impressive economic resilience and growth over the past year are a testament to the state’s strategic initiatives and achievements.
As the state progresses towards economic excellence, these accomplishments position Sarawak as a prominent player on the global stage, ready to embrace future challenges and opportunities.
