Our economic policies are based on the advantages that we have because we focus on our strengths, which are energy and carbon trading. In fact, we are the first in Malaysia to do hydrogen and carbon trading. – YAB Datuk Patinggi Tan Sri Abang Johari Tun Abang Openg,
the Premier of Sarawak
YAB Datuk Patinggi Tan Sri Abang Johari Tun Abang Openg, the Premier of Sarawak, was beaming with pride as he met with International Business Review in his office in Kuching on 25 September. And for good reason too. On 16 September during the Malaysia Day celebrations in Kuching, Prime Minister YAB Datuk Seri Anwar Ibrahim asked him to brief Federal Ministers and Deputy Ministers on how Sarawak’s economy has progressed. And a couple of days later, he was asked to give the same briefing to all the Menteri Besars (First Ministers) and Chief Ministers of the other States in Malaysia.
At the crux of these briefings are the advances that Sarawak has made with regards to green hydrogen. As the Premier proudly revealed,
“We are the first to explore and implement green hydrogen. None of the other States, not even the Federal government, have done so.”
Given that green hydrogen is expected to reach a market value of more than US$330 billion by 2032, Sarawak can be said to be on the verge of something good. And with this, it has become a role model for the rest of Malaysia to emulate.
An Impressive Past
With that being said, there are many other reasons why Sarawak should be regarded as a role model State. For instance, there is its success in developing its economy, raising living standards, tackling socio-economic
inequalities, and improving public infrastructure and amenities.
To illustrate, in 1980, Sarawak’s gross domestic product (GDP) stood at just RM5.3 billion. By 2022, it had reached a whopping RM140 billion. GDP per capita also tells a similar story. From a mere RM2,292 in 1980, around half of the national GDP per capita, it was calculated at more than RM80,000 in 2022. This is more than the national figure of RM54,000, and is also the 3rd highest among the other states and territories of Malaysia.
In fact, according to Dr Apurva Sanghi, the World Bank Lead Economist for Malaysia, Sarawak became a high-income state in 2022 as it has a gross national income (GNI) per capita of more than US$13,205.
Economic growth and the rise in income levels have also resulted in the successful tackling of poverty throughout the State. From more than 40 percent in 1980, the poverty rate in Sarawak dropped to 9 percent in 2019.
The impressive growth that Sarawak has experienced over the past 40-plus years is a testament to the strong leadership demonstrated by YAB Datuk Patinggi Tan Sri Abang Johari – who was named Sarawak’s Chief Minister in 2017 and redesignated as Premier in 2022 – as well as his predecessors. Each of them playing a vital role in bringing Sarawak to where it is today – a shining star of Malaysia.
In conversation with HM the Sultan of Brunei Sultan Hassanal Bolkiah and the Governor of Sarawak H.E Tun Pehin Sri Abdul Taib Mahmud. Brunei is Sarawak’s closest neighbour and the two share strong economic ties.
Digitalising Sarawak’s Economy
Much of the foundations of Sarawak’s wealth can be attributed to its vast stores of natural resources, particularly oil, gas, timber and agro-commodities such as palm oil, as well as minerals. Rather than just depend on its natural resources as a sole source of wealth, and in doing so fall into the infamous resource trap that many other states and nations find themselves embroiled in, Sarawak has focused on upgrading its other economic sectors.
One such area is the digital economy. In fact, YAB Datuk Patinggi Tan Sri Abang Johari has been the champion of Sarawak’s digital economy drive as one of his earliest initiatives was the Sarawak Digital Economy Strategy 2018 – 2022. This strategy sought to introduce a paradigm shift to Sarawak’s economy and transform it from being resource dependent to being more sustainable and in line with modern developments.
Earlier this year, the Sarawak State government launched the Sarawak Digital Economy Blueprint (SDEB) 2030, which aims to contribute 20 percent of the State’s GDP or RM56.4 billion by 2030.
Speaking at the Sarawak State Legislative Assembly in May, the Premier noted that. “By 2030, there shall be no distinction between the digital economy and the economy. All segments of the economy, namely mining, agriculture and forestry, manufacturing, construction, and services will be digitally driven using information and communication technology (ICT) and frontier digital technologies.”
Green Is In
Another key focus area for the Sarawak government is, of course, the aforementioned green hydrogen. Expounding on the State’s aspirations in this area, the Premier told International Business Review, “People are talking about hydrogen as a future fuel, and we are deploying that on our public transport such as on our buses and on our Autonomous Rapid Transit (ART).”
At the same time, Sarawak is also setting itself up to be a regional producer of hydrogen. In fact, it is already producing 130 kg of hydrogen per day – a small amount the Premier admits but a start nonetheless. And it is the first in Southeast Asia to do so.
To further advance its hydrogen economy goals, Sarawak is building two large-scale hydrogen manufacturing facilities. Called H2biscus and H2ornbill respectively, these plants are being constructed in collaboration with partners from Japan and South Korea, including giants such as Sumitomo Corporation, Samsung Engineering, LOTTE Chemical and POSCO Holdings.
Located at the Bintulu Petchem Industrial Park, these two plants are expected to produce 1.5 million tonnes of hydrogen by 2027. Much of this will be exported to Japan and South Korea, with Sarawak retaining some for domestic use. And with that, not only does Sarawak generate more revenue, it also plays a vital role in tackling global greenhouse gas emissions
as hydrogen is one of the cleanest fuels in existence.
This is part and parcel of Sarawak’s aspirations to be a regional clean energy and green energy hub. And it is well-placed to be so. As the Premier pointed out, Sarawak has hydropower potential of 30,000 MW, yet presently only produces 4,000 MW.
At the same time, the State is also looking at expanding its solar power potential. Also, as the Premier revealed, the State has been replacing its degraded forests with fast growing trees such as Acacia, which can then be harvested to produce wood pellets to be used as fuel.
During the signing of the Memorandum of Understanding between Sarawakian and South Korean companies to set up the H2biscus hydrogen plant project.
A Long-Term Strategy for Growth
Digitalisation and clean and green energy are incidentally two enablers of Sarawak’s Post COVID Development Strategy (PCDS) 2030. Formulated in 2021 after a meeting between stakeholders from the State government, private sector and non-governmental organisations (NGOs), the PCDS 2030 is a long-term plan to revitalise the Sarawakian economy after the pandemic and transform it into an advanced State.
“The PCDS 2030 is anchored on three pillars, which are economic prosperity, social inclusivity and environmental sustainability. And this has allowed us to identify several enablers to boost our economy such as sustainability, tourism and manufacturing including food processing,” the Premier explained.
He further revealed that, since the formulation of the PCDS 2030, Sarawak has been ramping up its development of basic infrastructure such as road connectivity, utilities such as water and power supply.
“We are very fortunate that we have good revenue in Sarawak, and that has allowed us to allocate substantial funding for the building of infrastructure. So far, up to August this year,
we have spent around RM12 billion ringgit on this,” YAB Datuk Patinggi Tan Sri Abang Johari told International Business Review.
Of particular importance is strengthening electricity supply, which is vital in bringing in further investments into Sarawak. On this matter, the Premier is pleased that Sarawak has been an attractive destination for investors to set up operations. In fact, in 2022, Sarawak brought in more than RM20 billion in investments – the third highest in Malaysia.
“Sarawak’s PCDS 2030 aims for Sarawak to become a high-income state while focusing on environmental sustainability and social inclusion. This massive step should be emulated by other states.”– YAB Datuk Seri Anwar Ibrahim, Prime Minister of Malaysia
Regional Impact
More than just making an impact internally, the Premier also hopes for Sarawak to become a key player in the growth of Borneo and the wider ASEAN region. One way in which
it is doing so is through improving physical connectivity thus ensuring easier access and movement throughout the island.
This is evident in the Pan-Borneo Highway project, which is a joint initiative with the Federal government to ease road travel between Sarawak, Sabah and Brunei. At the same time, the State government is also funding the upgrading of ports and the building of feeder roads to connect these facilities to the rest of the State and the island.
Another area in which the Premier believes Sarawak can be a major contributor is energy supply, as the State has the capacity and capability to become the Green Battery of ASEAN, through generating electricity from green and clean sources.
“We can produce power and sell the excess to neighbouring countries, and that becomes part of the ASEAN Grid,” the Premier explained. “We are already selling to Kalimantan and we are negotiating with Singapore to sell 1,000 MW of electricity to them and also offering to host energy intensive industries from Singapore in Sarawak, which will help us create good jobs.”
Sarawak’s expertise in hydropower has also seen the State electricity utility, Sarawak Energy, taking up a 25 percent stake in a hydroelectric plant in Kalimantan. “I was there the other day with President Jokowi of Indonesia for the launch of the hydro dam,”
the Premier said with a smile.
The Premier is also keen on Sarawak playing a part in the development of Nusantara, which is Indonesia’s new capital on Kalimantan.
“Nusantara is only 460 km away from our borders, which is just 25 to 40 minutes by flight. So Sarawak becomes part of its hinterland. That is why I requested the Federal government to increase the border townships so they will create regulatory trade between Sarawak and Kalimantan, and enable commercial communities from both sides to collaborate,” the Premier revealed.
Another area in which Sarawak is aiming to become a leader is addressing the problem of food security by becoming a regional food basket. To achieve that goal, the State government is seeking to encourage a shift in agriculture techniques, away from traditional subsistence based farming to using technology such as precision farming and smart farming.
This, he said, requires a change in the mindset of those in the agriculture sector. To bring that about, the State government is working with universities where the universities will adopt certain areas and students can work with members of the community. In addition, the Premier also said that Sarawak is looking to increase its production of rice threefold by using techniques developed in Vietnam.
An artist’s impression of the H2biscus green hydrogen plant which is being built at Bintulu. This project is expected to produce 7,000 tonnes per annum of green hydrogen for Sarawak’s domestic use, 600,000 tonnes per annum of blue ammonia, 630,000 tonnes per year of green ammonia and 460,000 tonnes per year of green methanol for export
Sarawak has definitely come far over the past 40 years, and with Premier YAB Datuk Patinggi Tan Sri Abang Johari at the helm, it is expected to go even further. As can be seen, it has all the potential to be the driver of growth and development of Borneo. Therefore, it is apt that Kuching, Sarawak has been chosen to be the venue of the first even IBR Borneo Awards which is taking place on 3 November this year. With the Premier as the Chief Guest, this gala event will bring together top corporate and government leaders from the region to see what Borneo, and Sarawak in particular, has to offer.
