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Sabah Development Corridor’s impact on the State’s economy
Published on: Saturday, March 17, 2018

By Dr Rafiq Idris
28th January marked the 10th anniversary of the Sabah Development Corridor (SDC).

Many good things have been brought to Sabah due to this national corridor program.

This article highlights my opinion on the projects by the SDC and how our economy has changed over the first 10 years of the SDC period.

The SDC is an economic corridor program that is undertaken to further develop various areas in Sabah.

It is one of the four other corridor programs in the country namely Northern Corridor Economic Region, East Coast Economic Region, Iskandar Malaysia and Sarawak Corridor of Renewable Energy. These five economic corridors program were initiated under Ninth Malaysia Plan to reduce development imbalances throughout the country.

Consistent with national agenda, the Economic Transformation Programme (ETP) and the National Key Economic Areas (NKEAs) that aim to transform Malaysia into a high-income nation by the year 2020, the SDC has several key focus areas: tourism, logistics and manufacturing, higher education, oil, gas and energy, agriculture and palm oil. In this regard, among the programs that fall under the SDC include Kinabalu Harbour Front and Gold Coast Enclave, consolidating logistic and transportation infrastructure, Sabah Agro Industrial Precinct, Sipitang Oil and Gas Industrial Park, Keningau Integrated Livestock Centre (KILC), Marine Industrial Cluster (MIC) in Southern region, Palm Oil Industrial Cluster (POIC) and Sandakan Education Hub (SEH). As a result of some of these programs, among others, more down streaming activities have been created and under the SDC.

In terms of infrastructure, many have been provided. For example, port transhipment hub in Sepangar, Pan Borneo highway among others shall definitely further improve the connectivity and logistical efficiency in Sabah.

It has the potential to lower the logistic cost and attract foreign direct investment at least in the long run.

In addition, when looking at certain macroeconomic indicators, datas have indicated significant improvement.

For instance, poverty rate has reduced significantly within these 10 years. Poverty rate was reported to be 19.7pc in 2009 and it has reduced to 2.9pc in 2016.

In terms of income distribution, Sabah’s distribution of income has improved. The gini coefficient level of Sabah was reported to be at 0.453 in 2009. In 2016, gini coefficient has improved where it was recorded to be at 0.404.

This is slightly higher than the national one which was reported to be at 0.399 in 2016.

In terms of household income, it has increased significantly in the past 10 years. In 2007, the mean monthly household income (in Sabah & FT Labuan) was reported to be RM2866. In 2016, it increased to RM5,468 and this is a 90.7pc increase. In comparison to a decade earlier, the period between 1997-2007, the recent increase in SDC period is even more. The increase for the period of 1997 to 2007 was just a 39pc increase.

Moreover, based on vacancies availability, huge increase have been reported during the SDC period.

For instance in 2007, new vacancies (by occupation) in Sabah was reported to be only 7999.

Between 2009 and 2010, annually the new vacancies were reported to be more 50,000.

Between 2011 and 2016, new vacancies were reported to be more 100,000 every year.

For instance, in 2016, it was reported to be 120,676.

To sum up, the economy of Sabah has significantly changed within these 10 years.

However, it is not to say that it is solely due to SDC. There are many other factors that may have contributed to the economic performance of the state in the past 10 years. However, despite the Global Financial Crisis in 2008, the recent slowing down in the world economy, the drop in world oil price and the depreciation of Ringgit among others, Sabah has recorded a significant achievement at least in some of the economic indicators.

It is hoped that Sabah will continue to grow in the years to come especially in the third phase of the SDC.

Despite the achievement being made, there are always many rooms for further improvement.

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