Sabahs Economy in Brief
Traditionally, Sabahs economy has
been predominantly export-oriented and dominated largely by primary commodities such as
agriculture, forestry and petroleum. Rubber and copra were the principal export
commodities in the 1950s but after 1960, timber emerged as the main thrust of economic
growth in the State. By the 1980s, crude petroleum surpassed timber as the most important
export item in terms of revenue. However, in the wake of dwindling natural resources, the
State has in recent years, adopted aggressive development strategies to transform its
economy into a more diversified, knowledge-driven and industrial-based. Manufacturing and
services have been heralded as the new growth sectors for Sabah and the creation of high
value-added and knowledge-intensive industries is the current emphasis of the State
Sabahs economic development has
performed credibly in the last decade attributed by the expansion in exports particularly
of saw logs and crude petroleum as well as the dynamic investment from both the government
and private sectors. Real gross domestic product (GDP) expanded by an average rate of
slightly below 6.0 percent during the period 1985-1994. In 1995, real growth is estimated
to reach 6.3 percent spearheaded by manufacturing, agriculture and tourism.
Natural Resources and Crops
Sabahs abundance natural resource
endowments is the States distinctive comparative advantage. Although these natural
resources are fast depleting in recent times, they still have a major role in shaping the
States economy. For example, forestry and mining comprised more than 20.0 percent of
Sabahs total real GDP in 1994.
Export of timber (in the form of saw logs)
was banned by the State government in 1994 in part due to the shortage of raw materials in
the wood processing industry such as sawn timber, plywood and veneer. The wood processing
industry has grown substantially over the years and has been the main reason behind the
expansion of the States manufacturing sector.
Oil palm is the most important estate crop
in Sabah. It was first introduced to the State in the early 1960s and in the last three
decades, the oil palm industry has contributed significantly to the States economy.