KUCHING: Sarawak has great potential to prosper and achieve equitable and inclusive development, but there is an urgent need to diversify the state’s economic and export structures.
Assoc Prof Dr Fumitaka Furuoka from the Asia-Europe Institute, Universiti Malaya, said Sarawak’s heavy dependency on oil and gas (O&G) exports may have resulted in three key problems in the state’s economy.
First, he said, was the issue of poor job creation.
“Despite its dominant position in the state’s income and export generation, the mining and quarrying industry has little contribution to employment creation in Sarawak,” he said.
He said in terms of employment, the dominant player was the service industry at 55 percent followed by the agriculture industry at 21 percent.
“The mining and quarrying industry generates only one percent of the total employment in Sarawak,” he said during a webinar entitled ‘Narrowing the Gap, Broadening the Unity’ organised by Yayasan Perpaduan Sarawak (YPS) yesterday.
Secondly, he pointed out that despite the high demand for commodities, the prices of natural gas and crude oil tends to fluctuate, which could harm export earnings.
“This means that the price of oil directly affects Sarawak’s economic performance,” he said.
On the third issue, Fumitaka said heavily relying on O&G exports resulted in the fluctuation of Sarawak’s income.
“Due to lower prices of O&G, Sarawak’s economy suffered from poor performance in the middle of the 2010s,” he said.
He said Sarawak’s gross domestic product (GDP) had barely expanded in those few years.