Outlook for an economically independent Sarawak

COULD Sarawak thrive economically as an independent nation? Should its people aspire to this future? While some fear that independence might bring economic instability, others see the potential for Sarawak to become a high-income nation with a first-world standard of living. Like the Baltic states and Singapore, which transformed their economies after independence, Sarawak could also aim to be a “Shining City in the  Jungle”.

The answer to this question is a qualified “yes”. Sarawak has the resources, assets, and opportunities to achieve this vision, but it must address a critical challenge: the need for stronger economic leadership and management. Overcoming this weakness is crucial for a sustainable and successful future.  

Resources, assets, capabilities  

Sarawak is rich in natural resources and benefits from favourable geography. While these resources have not yet been fully exploited, and their benefits have been unevenly distributed, Sarawak has made notable economic progress. Its existing infrastructure, human capital, financial assets, and social harmony provide a strong foundation for  further development. Independence could also increase the financial resources available for investment.  

Additionally, Sarawak has untapped resources and assets that could be leveraged when new market opportunities arise.  

Market opportunities  

There is no reason to believe that independence would negatively affect its current economic activities, GDP, or sectoral plans. Instead, independence could help Sarawak escape the challenges and negative perceptions associated with Malaysia, potentially boosting foreign investment and exports. Many newly independent countries experience a surge in innovation and economic development after gaining freedom from central authorities. This newfound autonomy could drive more economic growth.  

Sarawak is well-positioned to capitalise on global trends, such as the demand for  artificial intelligence (with its need for large data centres), renewable energy (hydropower and solar), and agri-food sectors related to food security. There are also opportunities in downstream and high-value-added activities and other sectors.  

Government and economy  

Sarawak enjoys inter-racial, religious, generational, and financial harmony, which benefits society, government, and business enterprises alike. If maintained, this harmony will continue to support economic development.  

However, Sarawak’s economic leadership and management have yet to excel. As a state within Malaysia, it has limited experience in managing complex global economic  environments. The “natural resource curse” has led to complacency in economic management, with a lack of strategic focus, clear priorities, and effective resource allocation. This is the weakest link in Sarawak’s economic prospects as an independent nation.  

To succeed independently, Sarawak will need much stronger leadership and management. Reliance on natural resources, favourable geography, and good intentions alone rarely drives sustained growth.  

An independent Sarawak has significant potential due to its resources, assets, and market opportunities. However, potential alone is not sufficient, as many governments and enterprises have discovered.  

Research consistently shows that high-quality leadership and management are decisive for enduring economic success. Sarawak has yet to demonstrate this capability, and there is no reason to expect a sudden improvement post-independence. Transforming economic management and leadership is essential to achieving a bright economic future and realising the dream of becoming a “Shining City in the Jungle”. 

The good news is that this transformation is within the control of Sarawak’s political  leadership. Achieving it will depend on their political will, intent, and commitment. – September 11, 2024.

* Tan Kee Hian reads The Malaysian Insight.  

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.