Sabah is at turning point in achieving good governance: Investors finally having confidence in Sabah

Daily Express

15-06-2025

Published on: Sunday, June 15, 2025
Published on: Sun, Jun 15, 2025
By: Datuk Roger Chin Text Size: Sabah is beginning to show signs of a state turning a corner. Where past governments have often lacked follow-through or institutional clarity, the current Sabah State Government is quietly but steadily laying the foundations of a more self-reliant, results-driven administration. Across sectors — energy, education, investment, and institutional reform — a more confident Sabah is emerging.
Advertisement Building Institutional Muscle - Power, Regulation, and Autonomy The establishment of the Energy Commission of Sabah (ECoS) is more than a bureaucratic development — it marks a turning point in how Sabah governs its most strategic resource. With Sabah Energy Corporation (SEC) now actively managing gas distribution, and with Petronas recognising Sabah's growing autonomy over its own energy landscape, the state is strengthening both regulatory and commercial control over its resources. The approval of 1,000 MW in new power generation capacity under ECoS — including 200 MW of solar and 100 MW of battery storage in Lahad Datu — nearly doubles Sabah's current installed capacity of 1,200 MW. This proactive approach to energy security demonstrates administrative focus in preparing for growing industrial and domestic demand. Taking back 50pc equity in the producing Semarang Oil Field under SMJ Energy was once unimaginable. Today, Sabah holds a historic 50pc stake in an operating oil asset, with further back-in rights on other fields — a significant marker of progress in asserting energy sovereignty. This shift aligns with the broader spirit of Malaysia Agreement 1963 (MA63) implementation — returning rights and agency to Sabah without fanfare, but with focus. Institutional Reform That Inspires Investor Confidence Sabah is no longer just talking about attracting investment — it is doing the hard work of institutional preparedness. The creation of the Borneo International Centre for Arbitration and Mediation (BICAM) is a notable move, signalling that Sabah is serious about dispute resolution infrastructure and legal professionalism. These are the quiet building blocks of an investor-friendly ecosystem. The state's ability to secure long-term, high-impact investments — such as E-Steel's manufacturing facility and other FDI-led industrial projects — reflects this shift. These are not fly-by-night deals but strategic entries into Sabah's industrial and logistics backbone, particularly in energy-adjacent and halal sectors. The government's target of developing 400,000 hectares of industrial tree plantations is also notable, laying the groundwork for a sustainable, regulated timber industry that can support long-term economic and ecological objectives. Fiscal Responsibility and Strategic Spending Under current leadership, Sabah has also improved its fiscal standing. State revenue has seen stable growth, with increased allocations to development budgets. A record-setting education fund through Yayasan Sabah signals not just an investment in human capital, but a turnaround in financial governance. Where once Yayasan Sabah was associated with mismanagement, today it is stabilising its accounts and focusing on outcomes: scholarships, rural education access, and TVET capacity. State reserves have grown from RM2.93 billion in 2020 to RM8.6 billion today — a clear indicator of improved financial governance and expanding revenue streams. This reflects not just fiscal prudence, but also stronger performance from some state-linked companies. For instance, Innoprise Corporation declared RM500 million in dividends over the past four years (since 2021), after previously declaring none. This speaks to stronger GLC performance and improved governance. There's also a sharper focus on aligning spending with long-term returns — whether in roads, ports, industrial parks, or digital infrastructure. Lifting the Rural Heartland Beyond Kota Kinabalu, the state has expanded rural electrification, water access, and road upgrades — critical interventions for a state where over 40pc of the population lives outside urban centres. Programmes aimed at uplifting native and rural entrepreneurs — including agro-based industry support and SME grants — reflect a more inclusive vision of economic participation. The government is also gradually tackling longstanding issues in land recognition and native customary rights, though much remains to be done. A Grounded but Forward-Looking Approach There is no claim here of a perfect government. Bureaucratic delays, inequality, and capacity constraints persist. But the approach has shifted. Instead of headline-chasing, the Sabah State Government has chosen institutional depth and economic realism — a style of leadership that may not always grab national attention but is increasingly delivering results on the ground. From Capacity to Delivery Sabah's next challenge is ensuring delivery keeps pace with ambition. Institutions are being rebuilt, but administrative culture and political stability must continue evolving. The state must also take greater ownership of climate resilience, digital transformation, and youth employment — all of which will define its trajectory over the next decade. Still, for a state so long defined by unrealised potential, the signs today are encouraging. Sabah is not just asking for more from the Federation — it is preparing to do more for itself. The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: [email protected]