Foreign direct investments
Sarawak possesses many strengths and advantages to attract foreign direct investments given its strategic location within Asean region.
Deputy Chief Minister Datuk Amar Awang Tengah Ali Hasan said Sarawak has an abundant of natural resources with political stability, business friendly policies and efficient civil service.
He said this during the Asean Business Advisory Council Malaysia — Consultation Meeting with The Sarawak State Government and Agencies, through online platform, on Thursday (Oct 21).
Awang Tengah was representing Chief Minister Datuk Patinggi Abang Johari Tun Openg for the consultation meeting.
“This consultation meeting is very much welcomed and timely to provide Sarawak an opportunity to exchange views and ideas with the council. Such engagement is important for planning our post Covid-19 economy.
“We certainly need more Domestic Direct Investment (DDI) and Foreign Direct Investment (FDI) to accelerate our economic recovery as we gradually open up the borders,” he added.
“Sarawak is embarking on the Post Covid-19 Development Strategy 2030 (PCDS 2030) to be a developed State by 2030 that is driven by data and innovation, where everyone enjoys economic prosperity, social inclusivity and sustainable environment.
“To achieve this target, Sarawak’s economy needs to grow on average 6.0 percent to 8.0 percent per annum until 2030.
“The strategic plans are anchored on six economic sectors as the main engines of growth namely, manufacturing, commercial agriculture, tourism, forestry, mining and social services.
“These sectors will be reinforced by seven enablers, such as digital transformation, innovation, basic infrastructure, transport, utilities, renewable energy as well as education and human capital development,” he explained.
Apart from that, Awang Tengah pointed out that Sarawak is blessed with rich natural resources particularly oil and gas, arable land for agriculture and natural forest in the 12.4 million hectares landmass.
He also stated that rivers in Sarawak have huge energy potential to generate 20,000 MW of hydroelectric power.
“Sarawak holds 54 percent of Malaysia’s natural gas reserves and 29 percent of the national crude reserves.
“While the exports of these crude oil and liquefied natural gas (LNG) have generated much income for Malaysia and the state, Sarawak would like to create more high-value petrochemical downstream activities.
“Apart from the federal tax incentives such as Pioneer Status, Investment Tax Allowance and Reinvestment Allowance, Sarawak is able to offer substantial non-tax incentives such as competitive tariff for power and water as well as competitive land premium with flexible terms of repayment and 30 percent rebates on land premium for early completion,” explained Awang Tengah.
Also the Second Minister of Urban Development and Natural Resources and the
International Trade and Industry, Industrial Terminal & Entrepreneur Development Minister, he added that Sarawak is an attractive destination for petrochemical and energy intensive industries, high-tech as well as green hydrogen.
He said this is due to the availability of natural resources, coupled with the abundance of hydropower resources.
“For records, Sarawak has been one of the top investment destinations for the manufacturing sector in Malaysia for the past many years.
“Last year, Sarawak was ranked second with investment value worth RM15.7 billion,” he added.
Awang Tengah pointed out that the state aspires to be a net food exporter by 2030 and will be achieved through commercial agriculture that capitalises on modern farming and global partnerships.
Among the key initiatives undertaken by the state government is developing agro-parks, smart farming and high value downstream products such as oleochemical.
“Tourism is a key sector in driving Sarawak’s visibility and branding around the world with our unique cultures, heritage and biodiversity.
“Therefore, we are focusing on eco-tourism and business events in Asean Region as well as promoting health tourism, sport tourism, agro-tourism and education tourism,” he elaborated.
Furthermore, in the forestry sector, the Deputy Chief Minister said forest management practices and stewardship will focus on balancing rate of deforestation and growth, increasing product yield and enhancing services obtained from forests.
In addition, he reiterate the sustainable approaches to monetise Sarawak’s rich resources will be implemented to provide economic opportunities for the rural communities.
“Our focus will be on high value added products such as furniture, engineered wood and pulp paper. In this regard, we are planning to set up furniture park in Kuching and Tanjung Manis,” he noted.
Awang Tengah also touches on mining sector in the state which driven by oil and gas upstream activities, which provide the feedstock for a few petrochemical industries in Bintulu.
He said this sector will move forward and encourage more high value downstream activities not only for oil and gas but also for other mineral resources such as silica sand, rare earth elements (REE) and kaolin clay.
Apart from that, Awang Tengah said the Brunei – Indonesia – Malaysia – Philippines East Asean Growth Area (BIMP-EAGA) is moving towards the right direction to complement the Asean Community Vision 2025 that aims to achieve a well-integrated and sustainable economic development within the region.
“Sarawak has been playing an active role in BIMP-EAGA since its establishment in 1994.
“Through this, Sarawak has been focusing on key sectors such as tourism, infrastructure, energy, agribusiness, environment, telecommunication and information and communication technology (ICT).”
He added that Sarawak exports an average of 122MW to West Kalimantan and committed to supply up to 50MW to Sabah, as well as negotiating with Brunei Darussalam on the interconnection project.
He also said that Sarawak Energy Berhad (SEB) is currently collaborating with an Indonesian company to develop hydroelectric project in North Kalimantan.
Other than that, he mentioned Sarawak through Sacofa is working with its counterparts in Brunei Darussalam and Indonesia to provide better telecommunication connectivity, leveraging on their respective networks.
“I believe the Asean Economic Community (AEC) will benefit Malaysia through the creation of a single market of more than 600 million consumers, with free flow of goods, services, investments, capital and skilled labour within Asean member countries.
“This will benefit Sarawak particularly as we have common borders with Kalimantan, Indonesia and Brunei Darussalam.
“With the intended move of the Indonesian capital to East Kalimantan, there would be plenty of business opportunities for both countries,” said Awang Tengah.
He stressed the importance of road connectivity with Kalimantan which can encourage more cross border trade and tourism within Borneo to achieve a win-win situation.
“Much of the development of central region of Kalimantan can be accelerated by leveraging on Sarawak’s port facilities which are much closer than the Indonesian ports,” he noted.