Beyond borders: Forging ties, enhancing economic resilience

STRENGTHENING economic ties and diversifying the state’s commercial foundations are important cornerstones of Sarawak’s forward‑looking development agenda.

As an integral part of his ‘progress-and-prosperity’ plan, Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg is revving up to increase outreach efforts in the neighbouring regions.

His administration is working towards the improvement of cross-region’s economy by forging more well-rounded and complex relationships with the neighbouring regions, which will provide new avenues for investment, trade, and innovation.

Apart from the promotion of coordinated development, this plan will also safeguard the region’s economy against global changes, ensuring that the region can withstand external forces while still moving forward on the path of sustainable development.

Trade networks

By integrating trade networks, joint venture schemes, and shared infrastructure projects into the fabric of cross-border relations, Sarawak seeks to build a more resilient and diverse economy.

On this basis, the Sarawak Premier is optimistic that the relationship between Sarawak, Sabah and Indonesia will be strengthened, marking the beginning of a new era of collaborative investment.

The three regions are crucial members of Brunei-Indonesia-Malaysia-Philippined East Asean Growth Area (BIMP-EAGA) – a sub-regional cooperation mechanism that has always managed to overcome challenges.

This is foregrounded against the narrative that Sarawak is moving away from a conventional economic model towards a high-value, advanced economy.

As reiterated by the Premier, the new economy is built on three pillars: renewable energy, semiconductors, and the ability to create innovations the world needs.

In this regard, through the establishment of a potential connection between Sarawak’s abundant resource endowment: oil, gas, palm oil, and even its nascent renewable energy industry; and Indonesia’s gigantic domestic market, its developed manufacturing sector, and its strategic location – both can construct a more robust, diversified, and climate change-resilient value chain.

Cross-border investment

Such measures could, for instance, mean the setting up of a cross-border investment fund for investing in green infrastructure such as hydropower, offshore winds, and solar farms; developing a ‘digital corridor’ with links between Kuching, Pontianak, and Balikpapan, with high-speed fibre-optic links; and developing special economic zones for small and medium-scale enterprises (SMEs) with customs and tax incentives and liberal immigration policies for both countries.

Strengthened cooperation in fisheries management, aquaculture development, and marine tourism – activities that benefit considerably from these common resource environments – would not only save biodiversity, but also build sustainable communities for people living in these environments; operational even in extreme climatic conditions.

The Premier underlines the need for more cooperation at a press conference after giving a keynote address at the Indonesia Economic Summit (IES) 2026 in Jakarta, themed ‘Coming Together to Boost Resilient Growth and Shared Prosperity’.

Abang Johari reiterates that the government-to-government arrangements between Sarawak and Kalimantan, as well as the BIMP-EAGA platform, would further enhance economic cooperation across the borders.

Regional energy cooperation

Nearer to home, the Premier witnessed a historic milestone in regional energy cooperation with the commencement of 30 megawatts (MW) of electricity supply from Sarawak to Sabah.

This initiative, which began in early December 2025, marks the implementation of the Sabah-Sarawak power interconnection and is a major step toward establishing a unified Borneo Grid.

The energisation of the Sarawak-Sabah Interconnection reflects our ongoing efforts to develop reliable and secure energy systems for the region.

By linking the Sabah and Sarawak grids, we are creating stronger operational flexibility and supporting long-term development for both states.

Strategic partnerships

Together, these initiatives, Sarawak’s strategic partnership with Jakarta and Sabah form a very strong platform for a resilient, investment-driven partnership that can outpace regional rivals, lure in global multinational corporations that need reliable supply chains, and ultimately, heave the prosperity of Sarawak and Indonesia into a rapidly changing global economy.

Borneo could emerge as a new economic powerhouse within Asean, if countries in the region strengthen their strategic cooperation, especially in green energy, semiconductor development, and the digital economy.

Abang Johari acknowledges that the outlook for further horizontal and vertical economic growth in the face of this shifting environment is promising.

The Premier speaks of the prospect of the wider Borneo, which comprises Indonesia’s Kalimantan region, Sarawak in Malaysia, and Brunei, as there is significant potential for collaboration under a common framework that could contribute to Asean’s growth and strengthen its engagement with the wider international community.

Sarawak, in particular, has strong potential to develop renewable or green energy, which has become increasingly critical amid global climate change concerns.

This form of energy is extremely important in the context of the climate change issue currently taking place.

Sharing surplus energy across Asean

In light of this, the Borneo territories must work together to supply surplus energy that can be shared among Asean countries.

Sarawak is already supplying electricity to West Kalimantan and, through Sarawak Energy, has a 25 per cent stake in a hydroelectric project in North Kalimantan.

Also in the pipeline are plans for the energy supply to Brunei by the end of the year, or early 2027.

Subsequently, Peninsular Malaysia and Singapore will be connected to electricity through submarine cables, and these will function as a platform to attract foreign investments.

Digital landscape

As Sarawak is departing from the conventional economic model towards a high-value, advanced economy, built on renewable energy, semiconductors, and the ability to create innovations the world needs, collaborations for investments across the region would follow the needs of the changing time.

Semiconductors are essential materials used to manufacture computer chips, key components in modern electronic devices.

Although relatively new to the semiconductor industry, Sarawak has established specialised educational facilities and is developing artificial intelligence (AI) power chips.

With stronger foreign investment, Sarawak aims to emerge as a top regional destination for renewable energy and high-technology investments.

The 2030 economy is shifting toward a digital landscape that relies on digitalisation across all sectors, ranging from mobile phones to public transportation.

Unlocking economies of scale

The Asean region offers a seamless cross-border platform for knowledge-sharing, supply chain integration, and collaborative research.

The sharing of joint renewable energy grids and the Asean-wide digital identity framework could potentially unlock economies of scale that would otherwise be impossible.

Furthermore, the region’s growing middle class, which is expected to surpass 600 million by 2030, also provides Sarawak with an enormous market for green and high-tech products; and Sarawak is to be regarded not only as a production location, but also as a gateway to Southeast Asia.

Hence, the strategic combination of strong foreign investment, a clear policy agenda, and the digitisation of all sectors of the economy puts Sarawak on a strong footing to leapfrog into a leadership position in the Asean renewable energy and high-tech value chain.

The coming decade will see Sarawak harness its natural resources to become a digital-powered, low-carbon engine of growth that can potentially anchor a more sustainable and connected Southeast Asian future.

* Toman Mamora is ‘Tokoh Media Sarawak 2022’, recipient of Shell Journalism Gold Award (1996) and AZAM Best Writer Gold Award (1998). A holder of PhD in Social Anthropology (Nottingham UK), this communication and research consultant remains true to his decades-long passion for critical writing as he seeks to gain insight into some untold stories of societal value.