Legacy in the Making: Establishment of Development Bank of Sarawak

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By Antonia Chiam

“Although DBOS is a wholly-owned subsidiary of Sarawak government, we will not interfere. Let us allow the professionals do their jobs and carry out other strategic and development initiatives.” Abang Johari (January 15, 2018)

SARAWAK has entered a bold new chapter of economic transformation under the leadership of Datuk Patinggi Tan Sri Abang Johari Tun Openg, the Premier of Sarawak. With his exceptional foresight in shaping the economic future of the State, one of his most significant and transformative initiatives has been the establishment of the Development Bank of Sarawak (DBOS).

Launched officially in November 2017, the bank is a non-prescribed development financial institution incorporated under the Companies Act 2016. It is fully owned by Capital Development Resource (Sarawak) Sdn Bhd, which, in turn, is 100 per cent owned by Sarawak’s financial secretary. The Bank which modelled after the Philippines’ Asian Development Bank (ADB) and Development Bank of Singapore (DBS), became operational on January 2018 with a paid-up capital of RM500 million.

Accelerating Growth

This visionary move is part of Abang Johari’s broader agenda to increase Sarawak’s economic autonomy, reduce dependence on federal institutions, and accelerate the State’s development through the creation of homegrown financial institutions. Abang Johari recognised that to truly accelerate Sarawak’s development, the State needed to take greater control over its economic destiny.

DBOS operates as a development financial institution, focusing on lending activities funded through capital injections from its holding company, deposits from the Sarawak government, and contributions from statutory bodies and government linked companies. Its primary role is to assist the Sarawak government in advancing strategic infrastructure projects.

The idea was conceived as a state-owned bank designed to facilitate economic growth by offering financial products and services tailored to Sarawak’s unique needs. It complements traditional banking institutions by offering financial solutions that target the State’s long-term development goals. Through its efforts, the bank is accelerating Sarawak’s growth and reducing reliance on federal funding, thereby fostering a more self-sustained economy. Prioritised on supporting long-term growth, DBOS offers various financial products, including term loans, revolving credit, project financing, bridging loans, syndication, and green funding. These solutions are designed to stimulate development in critical sectors.

In particular, DBOS focuses its funding activities on six major sectors to support Sarawak’s economic development. These include public infrastructure (such as water, roads, bridges, education, and healthcare facilities), as well as the energy sector (oil and gas, and renewable energy), agriculture, tourism, digital economy, and real estate, with particular emphasis on projects like the Autonomous Rapid Transit (ART). The bank aims to facilitate timely funding for these strategic sectors to promote economic growth.

In line with Sarawak’s vision for sustainable economic transformation, DBOS prioritises projects that align with the State’s strategic goals, especially those contributing to green initiatives and long-term sustainability. DBOS serves not only government agencies but also local authorities, statutory bodies, government-linked companies, and other entities under the Sarawak government’s purview. The overarching objective of DBOS is to ensure Sarawak has the financial capacity to fund and manage its development in line with its long-term economic vision. The bank serves multiple purposes; all geared towards fostering a self-sustaining and resilient economy.

Financing Infrastructural Projects

Sarawak, with its vast landmass and rural communities, requires significant infrastructure development to connect remote areas, improve public services, and boost economic activity. DBOS provides funding for large infrastructure projects, such as roads, bridges, public transportation systems, and energy initiatives that are essential for long-term economic growth and regional development. Aside from financing mega development projects, the bank also finances smaller infrastructure projects. DBOS emphasises the significant spillover effects of infrastructure projects—such as improved water supply, roads, and rural electrification, which are expected to greatly enhance the economic conditions of Sarawakians, especially those in rural areas.

One of the primary goals of DBOS is to ensure that the benefits of development are evenly distributed across Sarawak. The bank also has a special focus on supporting projects that aim to improve the economic prospects of rural and underserved communities. By providing financing for rural development initiatives, DBOS helps bridge the economic gap between urban and rural areas, contributing to greater social inclusivity.

As of March 31, 2022, the total placements of deposits in the DBOS had amounted to RM7.16 billion while the Bank’s total approved facilities were at RM9.70 billion, said Deputy Premier Datuk Amar Douglas Uggah Embas on May 26, 2022.

Uggah said the loans disbursed were mainly utililised for Sarawak’s public infrastructure projects such as water supply grid, rural electrification schemes, roads and bridges. By May 23, 2023, DBOS’ total assets had grown to RM9.47 billion with retained earnings of about RM131.48 million as of October 2022, announced Abang Johari. The Bank was given tax exemption by the Federal Ministry of Finance which requires profit earned to be re-invested into funding of more infrastructure projects.

Towards Economic Self-efficiency

As Sarawak continues to develop and move toward greater economic self-sufficiency, DBOS will remain a central player in its future success. The bank is instrumental in driving the State’s ambitious plans to diversify its economy, harness technological advancements, and tackle the challenges of climate change and sustainability. Through DBOS, Sarawak can fund the projects and initiatives that will help build a stronger, more resilient economy that benefits all Sarawakians.

Abang Johari’s leadership has been central in realising this vision, and DBOS stands as a testament to his commitment to empowering Sarawak’s people, fostering local businesses, and creating a brighter future for the State. By establishing DBOS, Abang Johari has not only taken a significant step toward enhancing the State’s economic autonomy but also paved the way for a more prosperous and sustainable Sarawak in the years to come.

The content featured here is an excerpt from the book “Rise of Sarawak: Abang Johari’s Era of Transformation”, published by Sage Salute Sdn Bhd.

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