State-Owned Enterprises as Key Drivers of Sarawak’s Growth

Sarawak’s state-owned enterprises (SOEs) play a crucial role that transcends the conventional notion of business.

They embody the collective ownership of Sarawak’s vital strategic resources by the rakyat (people).

Importance of SOEs

These enterprises are a direct representation of the rakyat’s interests, becoming key drivers of the Sarawak economy.

SOEs function as both strategic executors of state policy and commercial entities, generating significant non-resource revenue.

Their primary objective is to achieve financial independence while adhering to stringent governance standards and focusing on long-term value creation for the region.

Success for these enterprises is measured not only by financial returns but also by their broader positive impacts, such as strengthening industries and improving public services.

Custodians of Sarawak’s Future

SOEs are vital to the state’s socio-economic sovereignty and should not be viewed solely as profit centers.

They protect the people’s legacy and are responsible for crucial areas like financial stewardship and sustainable energy production.

The performance of these enterprises reflects the government’s stewardship over Sarawak’s strategic assets.

The significance of SOEs within the Post-Covid-19 Development Strategy (PCDS) was highlighted by the Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg during a recent assembly speech.

These enterprises operate within the framework of government policy to meet socio-economic needs.

Catalyzing Economic Development

The Sarawak government utilizes SOEs to implement state economic policies, address market challenges, and stimulate economic growth.

Investment and operational decisions made by SOEs influence employment levels and the state’s budget, contributing to economic stability.

A robust portfolio of SOEs is essential for financing Sarawak’s ambitions and promoting economic diversification.

Successful SOEs generate social benefits, stabilize market prices, and ensure that revenue from natural resources is reinvested into community development.

Transformative Role of SOEs

The leadership of the Sarawak government envisions a transformation of SOEs from administrative bodies into powerful economic catalysts.

These enterprises must demonstrate commercial viability and achieve independence from government subsidies.

Financial independence requires a shift where SOEs operate with the agility and profitability of private sector firms, generating capital and contributing dividends to the state.

Strict governance is crucial in this pursuit of profitability.

Governance and Long-term Goals

SOEs adhere to robust environmental, social, and governance (ESG) frameworks to ensure ethical management.

Upholding international standards of integrity and transparency is essential for long-term benefits for Sarawak.

These businesses are dedicated to maintaining economic stability and fostering local talent and infrastructure development.

Achievements in economic advancement and community development pave the way for a sustainable future for Sarawak.

Driving Economic Growth

SOEs and government-linked companies (GLCs) are not merely commercial entities but also implement state policies.

They undertake high-impact projects to achieve PCDS 2030 targets, requiring significant capital investment.

Sarawak’s government-owned businesses can engage in large-scale projects that might deter private investors due to their high risk and long-term nature.

For instance, Sarawak Energy Berhad (SEB) is foundational to the industrialization mandate and contributes significantly to the economy.

Fiscal Contributions and Economic Stability

These enterprises return substantial dividends to the state, providing non-tax income that supports public services and social programs.

During economic downturns, such as the recent pandemic, SOEs are stabilizers, maintaining employment and continuing capital projects.

They can take on risks that private firms avoid, ensuring strategic goals are met, such as essential infrastructure development.

Government support allows SOEs to focus on public-interest objectives over short-term profits.

Leadership and Strategic Vision

Strong leadership fosters a stable environment beneficial to SOEs.

Unlike private competitors, SOEs can develop long-term plans due to a consistent policy framework.

With government backing, SOEs can embark on impactful projects that drive economic and social change.

* 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.