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Economists back creation of special economic zones in Sarawak

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Madeline Berma says the formation of SEZs in Sarawak can enhance subregional cooperation between Sarawak, Brunei and Kalimantan.

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Sarawak’s proximity to Indonesia’s new capital, Nusantara, could lead to significant economic and business spillovers, justifying the creation of an SEZ, says economist Lee Heng Guie. (AFP pic)

PETALING JAYA:
The establishment of special economic zones (SEZs) in Sarawak will provide a significant boost to subregional cooperation and attract substantial foreign investment, say economists.

Although the government said last month it had no immediate plans to establish SEZs along Sarawak’s borders with Brunei and Kalimantan, economy minister Rafizi Ramli said the idea remains under consideration for future economic development in the region.

Universiti of Malaysia Sarawak honorary professor Madeline Berma told FMT that SEZs could serve as a strategic tool to attract foreign direct investment linked to global value chains.

“The formation of SEZs in Sarawak will enhance subregional cooperation between Sarawak, Brunei and Kalimantan,” she told FMT.

Free Malaysia Today
Madeline Berma.

“An SEZ can accelerate economic development around the Tebedu-Entikong border region (encompassing Sarawak and Kalimantan) through cooperation in power, telecommunications, and environmental conservation.”

Berma said SEZs should be strategically located near trade routes or borders, and supported by robust infrastructure.

These zones can facilitate export processing, industrial engineering, and logistics activities such as storage, assembly, and machinery repair, she said.

Berma added that these SEZs would benefit various sectors in the state, including wood-based processing, medical tourism, education and financial services.

Free Malaysia Today
Lee Heng Guie.

Meanwhile, Socio-Economic Research Centre executive director Lee Heng Guie said the establishment of SEZs in Sarawak could leverage the state’s existing economic growth potential and strategic location.

He said Sarawak’s proximity to Nusantara, Indonesia’s new capital, could lead to significant economic and business spillovers within an SEZ established between Sarawak and Indonesia.

Given Sarawak’s substantial revenue and budget surplus, Lee said the setting up of SEZs could help transform the state into an economic powerhouse.

“Sarawak is a sweet spot for investors given its abundant resources for renewable energy and green investment (hydro and hydrogen),” he said.

“There are also infrastructure expansion opportunities, covering water (pipe works, flood mitigation, and water treatment plants), transportation (Kuching Autonomous Rapid Transit, Pan-Borneo Highway, and other highway projects), and the potential setup of data centres.”

He added that the Brunei-Indonesia-Malaysia-Philippines East Asia Growth Area platform will also be able to promote regional investment collaboration in the SEZ.

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