Sarawak Budget must drive economic shift

KUCHING: Sarawak’s 2027 Budget should prioritise economic diversification and high-value human capital to reduce dependence on natural resources, says political analyst Datuk Dr Lee Kuok Tiung.

Lee, an associate professor at the Faculty of Social Sciences and Humanities, Universiti Malaysia Sabah, said the state’s strong fiscal position should be channelled towards a fundamental transformation of its economic structure rather than focusing solely on whether the budget records a surplus.

Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg is scheduled to table the Sarawak Budget 2027 on Oct 12.

“When discussing the annual budget, people often view spending in terms of a surplus, where revenue exceeds planned expenditure. However, in Sarawak’s context, I do not see this as an issue,” he said.

Lee said it would be difficult to identify a single priority for the 2027 Budget given the wide range of needs and aspirations among Sarawakians.

Instead, he said the focus should be on a balanced allocation that could facilitate a structural shift from an economy dependent on natural resource commodities towards sectors driven by productivity, knowledge and higher value.

“This entails spending to structurally diversify the economy through industrial capacity and high-value human capital,” he said.

Lee said Sarawak’s expansion into the green energy sector should also be sustained, describing consistent commitment to the sector as essential to the state’s economic transition.

He noted that the State Sales Tax (SST) had generated significant revenue and strengthened Sarawak’s fiscal position, but cautioned that the state should remain mindful that much of the revenue was ultimately linked to natural resources.

“Expenditure allocation must aim to further strengthen Sarawak’s fiscal standing, particularly within the framework of the Post COVID-19 Development Strategy 2030 (PCDS 2030),” he said.

Lee also called for greater investment in human capital and technical talent, saying the shift towards new economic sectors would create demand for highly skilled workers.

He proposed that the 2027 Budget expand free higher education initiatives at state-owned universities, with programmes and career pathways more directly aligned with science, technology, engineering and mathematics (STEM) disciplines and industry requirements.

“This is necessary to address the critical shortage of high-level technical manpower,” he said.

On infrastructure, Lee said the completion of numerous new bridges had improved connectivity to rural areas and could contribute to raising the socio-economic status of rural communities.

He cited the Muara Lassa, Marudi, Batang Lupar 1, Batang Saribas 1, Sejingkat, Datuk Amar Juma’ani (Sungai Bintangor) and Bintulu-Jepak bridges, with another 10 bridges expected to be completed soon.

However, he said infrastructure development should now move beyond road connectivity.

“Modernising the ports, local logistics hubs and industrial digital infrastructure would be important to attract sustainable domestic and foreign private investment,” he said.

Lee said such investments would help ensure that Sarawak’s infrastructure expansion translates into broader industrial development and supports the state’s longer-term economic transformation.