Sarawak poised to become the richest state in Malaysia

PUTRAJAYA – Sarawak is now on a strong trajectory to become the richest state in Malaysia within the next three years, following the official operation of Petroleum Sarawak Berhad (Petros), which has assumed the role of the sole gas aggregator in the state effective March 1.

Malaysia University of Science and Technology (MUST) economist professor Emeritus Dr Barjoyai Bardai ssid that the dynamic leadership of Sarawak Premier Tan Sri Abang Johari Tun Openg is the key factor behind the state's rapid development, particularly in technology and energy.

“Certainly, Sarawak will become the richest state because it has a very dynamic Premier who explores various technologies, especially in the critical area of renewable energy,” he told Sinar.

Barjoyai saiid the state revenue under Abang Johari has surged from RM5.6 billion in 2017 to RM14.2 billion in 2024 – a 250 per cent increase in just seven years.

This propels Sarawak as the state with the highest revenue in Malaysia.

“Based on the current trajectory, Sarawak is also on the right path to reach a GDP of RM282 billion by 2030,” he added.

In 2023, Sarawak recorded a Gross Domestic Product (GDP) of RM142.4 billion, ranking fourth after Selangor, Kuala Lumpur and Johor.

Additionally, the state also ranks fourth in GDP per capita, behind Kuala Lumpur, Labuan, and Penang.

As such, Barjoyai clarified that Sarawak is not solely dependent on gas, even though it possesses the largest gas reserves in Malaysia.

“Sarawak is using gas as the initial step, but in reality, the state is more focused on renewable energy sources,” he said.

He noted that Sarawak was the first state to develop hydrogen energy, which was considered more viable and sustainable than other energy sources. However, to fully realise this potential, the state required seed capital.

“Gas revenue may serve as a key catalyst for that effort,” he added.

On Wednesday, the Federal Government and Sarawak reached an understanding on issues involving Petros and Petronas through the signing of a joint declaration to advance Malaysia and Sarawak.

The declaration was then signed by Prime Minister Datuk Seri Anwar Ibrahim and Abang Johari.

Furthermore, Barjoyai believes that the collaboration between Petronas and Petros would enable Sarawak to develop new projects and focus on renewable energy development.

One such initiative, he said, is the Sarawak Corridor of Renewable Energy (Score) project, launched in 2008 to harness renewable energy sources, especially hydropower, to develop heavy and energy-intensive industries and accelerate economic growth in central and northern Sarawak.

Score, covering 70,000 square kilometres, has successfully attracted over RM33 billion in investments.

Regarding the acquisition of MASwings – now renamed AirBorneo – Barjoyai described it as a well-planned move that had long been on the state leadership’s radar.

“I met the Sarawak Premier five years ago, and at that time, he had already planned to purchase aircraft to export Sarawak-produced goods to the United States, which had high demand in Los Angeles,” he said.

Meanwhile, i-CATS University College Kuching economic analyst professor Datuk Dr Shazali Abu Mansor, said that recognising Petros as a key player in developing Sarawak’s downstream industry not only benefits the state, but also contributes to national income.

He stated that all of Petros' profits are subject to tax, which would contribute to the national GDP.

“In terms of revenue-sharing, we are not yet certain what the exact agreement looks like. But in principle, the Federal Government recognises that the gas belongs to Sarawak.

“Even if Petros earns profits, the government can still impose taxes. Perhaps Petronas' income will decrease, but if Petros generates significant downstream income through exports, that would benefit the country even more,” he said.