Monday, June 23, 2025

Economic Significance of Sabah and Sarawak in Malaysia’s Economic Growth

Ligunjang…Malayan experienced substantial infrastructure development and improvements in living standards but Sabah and Sarawak continue to face challenges of underdevelopment and high poverty rates.

KOTA KINABALU : – The formation of the Federation of Malaysia in 1963 was a pivotal moment in history for the Federation of Malaya, as it brought together distinct regions with diverse cultures and resources into a Federation of Nations.

Among these nations are Sabah and Sarawak, both rich in oil and gas reserves, which significantly contribute to Malaysia’s status as the largest oil producer in Southeast Asia.

The revenue generated from these Bornean states has played a crucial role in shaping Malaysia’s economic landscape and progress.

Former assemblyman for Petagas Datuk James Ligunjang, however, pointed out that while the Malayan states have experienced substantial infrastructure development and improvements in living standards, Sabah and Sarawak continue to face challenges of underdevelopment and high poverty rates.

“This dissatisfaction stems from the federal government’s failure to fully implement the terms of the Malaysia Agreement 1963.”

“Particularly regarding revenue sharing as outlined in Articles 112C and 112D of the Federal Constitution, ” he said in his latest posting in his social media platforms, MySabah.

Ligunjang, who is also a Justice of Peace, said without full adherence to these agreements, Sabah and Sarawak are unlikely to achieve levels of development and living standards comparable to those in Malaya anytime soon.

He correctly stated that the  oil and gas sector in Sabah and Sarawak is a significant source of revenue for the federal government, contributing billions of ringgit annually through royalties, taxes, and other revenues.

“Despite this, there is ongoing resentment among the people of Sabah and Sarawak regarding the lack of financial support for local development projects, infrastructure enhancements, and public services, ” he added

Ligunjang said the  non-compliance with Articles 112C and 112D has created socioeconomic disparities within the federation, leaving Sabah and Sarawak lagging behind the more developed Malayan states.

The challenges faced by Sabah and Sarawak are compounded by political interference in the administration and political affairs of the Bornean states, undermining the sanctity of the Malaysia Agreement 1963.

Notwithstanding the contributions of Sabah and Sarawak to the vitality of Malaysia’s economic growth, dissatisfaction regarding revenue-sharing agreements continue to persist which poses serious implications to to national unity and development.

“It is important for Putrajaya to recognize and address the issues arising from the implementation of MA63 to promote a more equitable development that lead towards national harmony, and unity, ” Ligunjang said

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