KUCHING: Sarawak is well on its way to developing its economy as foreign businesses and investors look to the state for investment opportunities.
According to Oxford Business Group’s (OBG) regional editor, Paulius Kucinas, Sarawak remained an attractive destination for capital investments as it rode on the structural rise for commodities worldwide.
This was said during the launch of The Report: Sarawak 2011, which provides in-depth detail on Sarawak’ current economic outlook and what the future holds for the state.
According to Kucinas in his opening remark, the new report described the pivotal juncture that Sarawak has reached as it prepared itself for faster economic growth by encouraging the private sector to get involved in major infrastructure developments.
“We are conscious of the fact that the global competition for capital and economic advantages is getting more intense every year as more countries and regions emerge onto the world stage, offering constant advantages, market access and new investment opportunities,” he noted.
“At the same time, we firmly believe that the current global economic cycle favours the Asean region which has emerged as a new safe haven for international investors and multinational companies. In this region, Sarawak stands out as a leading example of Asean’s growth potential,” Kucinas affirmed.
The regional editor underscored signs showing Sarawak’s economy expanding exponentially, from just RM527 million back in 1963 to RM50 billion by the end of 2010.
“Today, Sarawak’s economy accounts for nearly 20 per cent of Malaysia’s total GDP (gross domestic product),” said Kucinas. “The state is blessed with natural resources that underpin its economic growth fundamentals.
“The proceeds from hydrocarbons, crude palm oil, agriculture and timber will continue to ensure strength in both public and private sector balance sheets,” he added.
“While credit expansion will naturally increase its debt to GDP ratio once large development projects get underway we think Sarawak has plenty of room for manoeuvre. Its domestic banking sector faces none of the constraints which we nowadays see in the Europe and United States.”
The challenge going forward, Kucinas highlighted, would be to improve the productivity on existing sectors and capture higher value-add by going further downstream in resource-based industries while also diversifying the economy into new areas of economic activities.
The report was launched yesterday by the Chief Minister of Sarawak, Pehin Sri Abdul Taib Mahmud. It is the group’s second report on the state, encompassing a sector-by-sector guide for investors, alongside interviews with political, economic and business leaders. It also provides case studies of successful business models while candidly discussing the challenged being faced in today’s marketplace.