Sabah, the second largest state in Malaysia, is located on the northwestern tip of Borneo and shares a border with the Indonesian province of Kalimantan. Agriculture is the most important sector in Sabah’s economy, contributing about 24.2% to the state’s GDP. The state’s agriculture sector remains dominated by the cultivation of oil palm. Presently, the land area planted is approximately 1.244 million hectares or 88.2% of the total agricultural land. Other major agricultural commodities exported include crude palm oil, cocoa and rubber. Major non-agricultural commodities include crude petroleum and plywood.
The Sabah Development Corridor (SDC), launched in 2008 was initiated primarily to accelerate the growth of the Sabah economy and to bridge the rural-urban divide while ensuring sustainable management of the state’s resources. One of the dual objectives of the SDC is to accelerate development in less developed districts by creating economic opportunities, improving infrastructure and amenities to narrow the rural urban gap. To achieve that noble objective, growth corridors and growth centres will be developed in an integrated manner focusing on the three economic drivers for SDC namely agriculture, tourism and manufacturing, as well as enhancing Sabah’s infrastructure and human capital. In the regional context, one of the SDC programs is to catalyse growth of manufacturing and downstream processing industries as well as increasing trade activities between the BIMP-EAGA countries and North Asia.
The “Halatuju” – a document on the strategic imperatives to bring development and progress to Sabah - is the principal guide for the state’s overall economic, social and political development. The document is crafted to reinforce past and current measures aimed at expanding overall productivity and improving on capabilities for regional tourism. It puts emphasis on the tourism, agriculture, and the manufacturing sectors as the primary engines of growth and development. Cross-border trade (barter trade) between Sabah and her neighbors, Southern Philippines and Eastern Kalimantan, is significant, with total trade values ranging between RM150 million (US$39.5 million) to RM300 million (US$78.9 million) per year. Barter trade plays an important role in enhancing and sustaining the socioeconomic development and growth of the local economies of the focus areas.
To diversify its economic base the State Government is also actively promoting development of the tourism industry. Sabah is best known for its adventure and ecotourism attractions, such as Mount Kinabalu, South East Asia’s highest peak at 4,101 meters, pristine rainforests in the Danum valley, proboscis monkeys along the Kinabatangan River, the world’s largest orangutan sanctuary at Sepilok, and many beautiful islands and beaches with excellent diving sites offshore.
Sarawak, the largest Malaysian state, shares borders with the province of Kalimantan on its south side and with the sultanate of Brunei Darussalam on its northeastern side. Sarawak’s economy is largely driven by its abundant natural resources such as oil, gas and timber, but since the 1980’s, Sarawak began diversifying and transforming its economy. The manufacturing sector is now the focus and catalyst for future economic growth and development of the State. The State also has a strong economic growth with low inflation rate. Sarawak GDP growth in 2005 was 5.0% with 2.2% inflation rate and in 2007, GDP growth was estimated at 5.8% with 2.0% inflation. Sarawak owes its economic growth to the sectoral shift from primary to secondary and tertiary sectors with focus on the manufacturing and services sector as well as agriculture in large-scale plantation.
Sarawak has a wealth of natural resources – from gas and petrochemical to agriculture and forestry. With an abundant supply of natural resource, the State is capable of sustaining resource-based industries and providing great opportunities for growth in value-added processing ventures.
The Sarawak Corridor of Renewal Energy (SCORE) is a major development undertaking primarily to develop the central region and eventually transform Sarawak into a developed State in tandem with national policy and mission towards the year 2020 and beyond. The development of the regional corridor will capitalize on the region’s abundance of energy resources such as hydropower, coal and gas, a pre-requisite for the development of energy-based industries to have access to relatively cheaper-priced electricity, its rich silica deposits, vast potential in palm oil and timber as well as new resource-based industries such as aquaculture and livestock.
One of the most attractive features of Sarawak is its cultural diversity, which has helped establish the state as one of the most popular tourist destinations in the region. Sarawak is also known for its adventure and eco-tourism. Among the popular sites are the Mulu Caves (one of the largest limestone cave systems in the world), Niah Caves, inland rivers, and several excellent national parks.
The Federal Territory of Labuan is an island situated off the west coast of Sabah. Labuan is Malaysia’s International Offshore Financial Centre, which in 1991 was also declared a duty-free port. The tiny island is strategically located along the international shipping and air routes between the Indian and the Pacific oceans. Business and investment opportunities abound in Labuan, particularly in oil and gas, manufacturing, trading, tourism, cargo handling and bunkering, deep-sea fishing, offshore finance, insurance and education.
|Land Area (sq. km.)
|GDP (RM billion)
|GDP Growth Rate
|Per Capita GDP (RM)
|Imports (RM Million)
|Exports (RM billion)
|Major Import Items
||Machinery & Transport Equipment, Manufactured goods, Food, Mineral fuels, Lubricants and Chemicals
||Machinery & Trans equipment, manufactured goods, food and mineral fuels
|Major Export Items
||Palm Oil, Crude Petroleum, Plywood, Sawn Timber, Palm Kernel Oil, HBI, Methanol, Veneer Sheets
||LNG, Crude Petroleum, forestry products
|Major Trading Partners
||Peninsular Malaysia, USA, Japan, Korea, China, India, Singapore and the Netherlands
||Japan, Korea, Peninsular Malaysia